Chinese Military,Political and Social Superthread

[a_majoor]

The last housing bubble that popped in 2008 caused a real mess.....

http://www.forbes.com/sites/gordonchang/2011/11/06/property-prices-collapse-in-china-is-this-a-crash/

Property Prices Collapse in China. Is This a Crash?

Residential property prices are in freefall in China as developers race to meet revenue targets for the year in a quickly deteriorating market.  The country’s largest builders began discounting homes in Shanghai, Beijing, and Shenzhen in recent weeks, and the trend has now spread to second- and third-tier cities such as Hangzhou, Hefei, and Chongqing.  In Chongqing, for instance, Hong Kong-based Hutchison Whampoa cut asking prices 32% at its Cape Coral project.  “The price war has begun,” said Alan Chiang Sheung-lai of property consultant DTZ to the South China Morning Post.

What started slowly in September turned into a rout by the middle of last month—normally a good period for sales—when Shanghai developers started to slash asking prices.  Analysts then expected falling property values to move Premier Wen Jiabao to relax tightening measures, such as increases in mortgage rates and prohibitions on second-home purchases, intended to cool the market.

They were wrong.  After a State Council meeting on October 29, Mr. Wen affirmed his policy, stating that local authorities should continue to “strictly implement the central government’s real estate policies in the coming months to let citizens see the results of the curbs.”  Then, the selling began in earnest as “desperate” developers competed among themselves to unload inventory.  One builder—Excellence Group—even said it would sell flats in Huizhou at its development cost.

Citi’s Oscar Choi believes prices will decline another 10% next year, but that’s a conservative estimate.  Even state-funded experts are more pessimistic.  For example, Cao Jianhai of the prestigious Chinese Academy of Social Sciences sees price cuts of 50% on homes if the government continues its cooling measures.

When Beijing’s pet analysts are saying prices could halve in a few months, we can be sure they are thinking the eventual sell-off will be worse.  In any event, the markets are bracing for trouble.  Investors are dumping both the bonds and the shares of Chinese developers, and legendary bear Jim Chanos, citing the property market, late last month said he is still not covering his short positions on China.

One does not have to agree that China will be “Dubai times 1,000—or worse”—Chanos’s memorable phrase—to understand that the unwinding of “the biggest housing bubble ever created” will be especially painful.  Analysts have great confidence in Beijing’s technocrats because they managed to continue to manufacture growth through the global downturn, but most of us seem to forget that the Chinese, through massive stimulus, created even bigger challenges for themselves.  At the moment, Beijing has yet to resolve two intractable problems: persistent inflation and artificially high property prices.T

he dominant narrative at the moment is that China’s economic managers will skillfully deflate the property bubble and land the economy softly.  As Time observes, “Many observers say a sharp economic decline won’t be permitted to happen before the change of leadership in 2012.”

Won’t be permitted?  It is true that Beijing’s technocrats have had the advantage of working in a semi-closed system that has allowed them to use the considerable resources of the state to achieve outcomes not possible in freer economies.  Nonetheless, they can continue to do so—in other words, defy economic principles—only as long as market participants—in this case builders, local officials, and homeowners—cooperate.

The last four weeks, however, must have been a sobering period for Premier Wen, and not only because developers began to lose their nerve.  For one thing, recent purchasers have taken to the streets because they had suffered losses even before taking possession of their homes.  A crowd of about 300 people in Shanghai smashed windows at the sales office of Longfor Properties on October 22, two days after the builder had ended a sales promotion on a project.  The protestors had bought properties in earlier phases of the same project at prices as much as 30% higher than the discounted ones.

And then, on the 23rd, a smaller crowd—on the same street—demonstrated against another developer, Greenland Group.  Protesters were injured in Shanghai at another demonstration, this time against a unit of China Overseas Holdings.  There were also protests against builders in Beijing and in other cities, Hangzhou and Nanjing.
The cities of Hangzhou and Hefei have reportedly told developers to limit discounts to 20% to avoid unrest, but the attempt to establish fiat prices will not work for long because many builders face insolvency.

Moreover, Premier Wen has to be concerned that sometimes he cannot control his own cities, which have flouted his decrees by removing curbs on property ownership.  Nanjing defied Beijing and relaxed mortgage rules, as did Anhui province.  At least in Foshan, a city in Guangdong, central authorities apparently convinced local leaders to rescind their earlier decision to scrap centrally mandated curbs.

The overriding reality is that, because of Beijing’s stimulus spending, there are too many properties and not enough buyers at this time.  The market will have to arrive at equilibrium at some point, but what is surprising is the rapidity at which this is now happening.  In common parlance, it’s called a crash.
The cities of Hangzhou and Hefei have reportedly told developers to limit discounts to 20% to avoid unrest, but the attempt to establish fiat prices will not work for long because many builders face insolvency.

Moreover, Premier Wen has to be concerned that sometimes he cannot control his own cities, which have flouted his decrees by removing curbs on property ownership.  Nanjing defied Beijing and relaxed mortgage rules, as did Anhui province.  At least in Foshan, a city in Guangdong, central authorities apparently convinced local leaders to rescind their earlier decision to scrap centrally mandated curbs.

The overriding reality is that, because of Beijing’s stimulus spending, there are too many properties and not enough buyers at this time.  The market will have to arrive at equilibrium at some point, but what is surprising is the rapidity at which this is now happening.  In common parlance, it’s called a crash.
The cities of Hangzhou and Hefei have reportedly told developers to limit discounts to 20% to avoid unrest, but the attempt to establish fiat prices will not work for long because many builders face insolvency.

Moreover, Premier Wen has to be concerned that sometimes he cannot control his own cities, which have flouted his decrees by removing curbs on property ownership.  Nanjing defied Beijing and relaxed mortgage rules, as did Anhui province.  At least in Foshan, a city in Guangdong, central authorities apparently convinced local leaders to rescind their earlier decision to scrap centrally mandated curbs.

The overriding reality is that, because of Beijing’s stimulus spending, there are too many properties and not enough buyers at this time.  The market will have to arrive at equilibrium at some point, but what is surprising is the rapidity at which this is now happening.  In common parlance, it’s called a crash.

 

[Edward Campbell]

Take a look at these videos. It's an hour out of your life but It's a pretty informative hour. This documentary is good on several levels: it's about China, it's about children and parents and it's about the practice of democracy ~ there is not, it appears to me a whole lot of difference between that classroom and the US Congress, or our Parliament. Dirty tricks and vote buying work.


Vote For Me

http://www.youtube.com/watch?v=jYb_KzlXk4A&feature=related

http://www.youtube.com/watch?v=oy7cvoVRDjo&feature=related

http://www.youtube.com/watch?v=ePiLfle5We4&feature=related

http://www.youtube.com/watch?v=xt0U1f_z4XE&feature=related

http://www.youtube.com/watch?v=7ZA6Rg2pTSg&feature=related

 

[a_majoor]

More bad news from China:

http://blogs.the-american-interest.com/wrm/2011/11/08/the-most-important-story-of-the-day/

The Most Important Story of the Day

Hold on to your seats; according to The Conference Board, perhaps the most important business oriented forecasting group in the world, revolution is coming to China.

That’s not what the group’s latest global forecast says literally, but this or something like it is the clear meaning of the forecast that China’s growth is likely to slow to 8.7 percent next year, 6.6 percent in each of the four years after that, and then average 3.5 percent per year between 2017 and 2025. It has long been an article of faith inside China and among most China watchers that the country needs 9 percent growth per year to avoid widespread instability.

If China’s growth decelerates that fast, that far, the biggest question in world politics won’t be how the rest of us will accommodate China’s rise.  The question will shift to whether China can last.

The report, well covered in the Wall Street Journal, is a sober read.  Overall, world growth is expected to decline, with both China and India leading the decline.  The advanced countries are expected to recover from the current slump, but growth will remain anemic for years to come.  In other parts of the developing world, growth could slow to a crawl, presumably reflecting poor demand for basic commodities in a slow growth world.

Forecasts almost never come true, and economic forecasts at this point are much less reliable than weather reports.  But the main story here is that some of the best trained, and best connected economic minds in the business are changing their tune about China and India.  The inexorable rise of the supergiants has been the dominant meme in the fashionable chit-chat about global economic and geopolitical trends for some time.  The Conference Board report gives respectability and visibility to a more textured and, in Via Meadia’s view, more realistic view of what lies ahead.

The Conference Board could still be understating the problem.  If growth deceleration results in serious instability, blows out the financial system (a distinct possibility), or simply ties the hands of China’s policy makers so that they can’t respond in a timely fashion to changing circumstances, deceleration could turn into something much more dramatic very fast.

The next ten years will be full of surprises; this report offers a welcome if occasionally grim peek under the curtain to see what some of those surprises might be.

 

[Edward Campbell]

A report, reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail, on China's expansion into Brazil, especially into its energy sector:

http://www.theglobeandmail.com/report-on-business/international-news/latin-american/chinas-sinopec-buys-52-billion-stake-in-galps-brazil-assets/article2233217/

China’s Sinopec buys $5.2-billion stake in Galp’s Brazil assets

LESLIE HOOK
Beijing— Financial Times

Published Friday, Nov. 11, 2011

Sinopec, China’s biggest oil refiner by amount of oil refined, has signed a $5.2-billion (U.S.) deal that will give it a 30-per-cent stake in the Brazilian assets of Galp Energia, the Portuguese energy company.

The deal is the latest in a string of Chinese oil investments in Brazil, where rich oil resources lie offshore in deepwater areas that require a lot of capital to develop.

Galp Energia, which has a market cap of $11-billion, started a bidding process earlier this year looking for a partner to help finance its Brazilian projects, which include four offshore blocks in the pre-salt Santos Basin.

State-owned Sinopec on Friday said it would pay $3.5-billion for the 30-per-cent stake in Petrogal Brasil and Galp Brazil Services, which are both subsidiaries of Galp, in addition to $1.6-billion in capital expenditure, bringing the cash transaction to a total of $5.2-billion.

“The acquisition has further expanded Sinopec’s overseas oil and gas business operations, which will make major contributions to the company’s oil and gas output growth in the 12th and 13th five-year plan periods,” the Chinese group said in a statement.

Galp shares fell 11 per cent in Lisbon on Friday morning on the news, their biggest decline for three years.

Chinese companies have been major investors in Brazil’s offshore oil fields, with recent deals including Sinopec’s $7.1-billion purchase of a stake in the Brazilian assets of Repsol YPF last year. Sinochem, the Chinese chemicals company, bought a $3.1-billion stake in the Peregrino oil field from Statoil last year.

Sinopec and other oil groups were also in talks over BG’s Brazilian assets in recent months, although those talks have since collapsed, a person with knowledge of the matter said.

In 2009, the Chinese government inked a $10-billion oil-for-loan deal with Brazil, under which Sinopec is guaranteed a certain amount of crude supplies over a decade.

Chinese state-owned oil companies have done more than $20-billion in deals this year, making China one of the world’s top acquirers in the oil and gas sector, alongside the US and the U.K.

China is the world’s biggest energy consumer and second-biggest consumer of crude oil. Beijing has long viewed the country’s reliance on imported crude - which supplies about half of China’s total oil consumption - as a strategic weakness.

Galp’s Brazilian assets account for some 90 per cent of its total reserves, and include more than 20 exploration and production projects. Eni of Italy holds a 33 per cent stake in Galp which it tried to sell to Petrobras of Brazil earlier this year, but the deal fell through. The Portuguese government also has a stake in Galp.

It is important to understand that Chinese ownership, even 100% ownership of a resource does not give it control over where that resource goes - the country in which the resource is found still has sovereign rights until such time as that resource leaves its borders. Oil is a classic case in point. The "owner" of the oil is not sure where the oil is going until it actually arrives at some refinery - there are so many brokers and middlemen that oil often changes hands and even, but much less often, destinations while it is at sea in a tanker.

What the Chinese are after is protection from potential embargoes. Think back to the summer of 1941: the US, then Japan's biggest oil supplier, halted oil shipments to Japan to retaliate for further Japanese advances into French Indo-China. China wants to have enough "say" in the oil policies of enough countries to prevent a global embargo.

Canada is also a target of China's oil ambitions. China especially likes Canada because, "dirty" or not, our oil is produced and exported under a rule of law that prevents or, at the very least, delays precipitous political actions like embargoes.

 

[Edward Campbell]

And the Chinese are, quietly, smiling at the latest setback for the Keystone pipeline. Every setback for Keystone is a step forward for Northern Gateway which might direct more and more "safe" Canadian oil towards Asia and away from America - giving China better access to "well governed" Canadian oil and leaving America reliant on e.g. Saudi Arabia and Venezuela.

 

[a_majoor]

If this is the 21rst century counterpart to AirLand Battle, then the interesting question is how exactly is this going to be done, given the shrinkage of US military assets over the past decades?

http://pjmedia.com/richardfernandez/2011/11/10/tales-of-the-western-pacific/?print=1

Tales of the Western Pacific

Posted By Richard Fernandez On November 10, 2011 @ 1:52 pm In Uncategorized | 75 Comments

The Pentagon [1] has released a few details of the mysterious “air sea battle” concept which is widely understood to be directed primarily at  China. The Chinese threat is described as consisting of “anti-access, area denial weapons”, a euphemism for preparations to sink US carrier battle groups at sea. Yet despite the portentous  description of the “air sea” concept there were few details available:

    “Air Sea Battle is to China what the maritime strategy was to the Soviet Union,” the official said.

    During the Cold War, U.S. naval forces around the world used a strategy of global presence and shows of force to deter Moscow’s advances.

    “It is a very forward-deployed, assertive strategy that says we will not sit back and be punished,” the senior official said. “We will initiate.”

The Wall Street Journal [2] says that despite the veil of mystery over what it really amounts to fears are already being expressed about it being overly aggressive towards Beijing.

    At its foundation AirSea Battle is a roadmap to combining Air Force and Navy assets to overwhelm attempts to limit the U.S. military’s global reach. In the Pacific theater this would serve as the counter-punch to China’s “anti-access” capabilities, which include a nascent anti-ship ballistic missile that could hold the U.S. Navy at bay during a regional conflict.

    But AirSea Battle could be excessively provocative. Many analysts fear that the plan is the next step in a cycle of military escalation that could taint broader diplomatic relations between the two countries. The Pentagon has delayed implementing and discussing AirSea Battle several times, partly because of concerns over the Chinese reaction.

The Chinese are guaranteed not to like it. That suggests that the official version of the doctrine will be crafted not to provoke China. But whether there will be an unofficial and politically incorrect version of the plan and what it will consist of is not publicly known. AOL Defense [3] describes a briefing at which one of its correspondents managed to learn nearly nothing:

    We learned it is a not a strategy, not a concept of operations, not an assault on the services’ authorities and is not directed at any particular country.

    So a gaggle of the nation’s top defense journalists got together after the discussion and tried to figure out what the hell it all really meant. I’d like to say we achieved great clarity. We didn’t. We were all left groping for a clear and coherent explanation we could offer readers for Air-Sea Battle.

    After discussions with several defense civilians and uniformed types, I think the best way to describe this effort is to say that the defense leadership is worried that after a decade of counterinsurgency operations the U.S. military has lost its focus on conventional warfare, especially the strike and counterstrike that drives much of a military operation.

Clue number 1: the “air sea battle” concept involves classic conventional warfighting.  AOL sensed that the Army was worried and bustled around looking for a way into the “air sea battle” concept before all the funding went to the Air Force and Navy, leaving the Army to fight terrorists in distant muddy places.

But as the Wall Street Journal says, the Chinese have guessed they are the object of the strategy — whatever it is — and are not standing still.

    No matter what shape AirSea Battle finally takes, China may already have a counter to the counter-response. Mark Stokes of the Project 2049 Institute says that China has already anticipated some of AirSea Battle’s components in its long-term plans for modernization. “The PLA has invested considerably in counter-stealth systems and tunneling to protect critical infrastructure.”

That implies, if anything that the Chinese believe the US is going to hold their capabilities at risk. The USAF and USN are acquiring the hardware to take out their area-denial and precision strike capabilities first. That would explain why the Air Force and the Navy are looking to get [1]:

    a new long-range bomber.
    joint submarine and stealth aircraft assets.
    jointly operated, long-range unmanned strike aircraft with up to 1,000-mile ranges.

In that light it is interesting to note that President Obama is slated to announce an agreement with Australia [4] that will give American troops and ships “permanent and constant” access to Australian facilities. This would appear to be a complementary strategy to the “air sea battle” strategy, not part of it. It would allow US submarines to choke off any sea traffic originating from the Indian ocean bound for the Chinese ports. This would give the USN and USAF the option to perform a distant blockade on China in addition to the close in interdiction based on Japan and Korea.

    The move could help the U.S. military, now concentrated in Japan and South Korea in Northeast Asia, to spread its influence west and south across the region, including the strategically and economically important South China Sea, which China considers as its sovereign territory.

It will be recalled that one prong of the US submarine campaign against Japan, whose land mass is roughly opposite the Chinese ports, was based in Fremantle, Australia. More than 120 US subs [5] used Fremantle at one time or another during World War 2. The map below shows COMSUBWESPAC’s area of operations. It includes the South China Sea. Although 70 years have passed since World War 2, geography has changed but little. Thus the new agreement with Australia clearly raises the possibility that China might be strangled from Australia just as Japan once was.
[6]

Somewhere in the South Pacific

But the Diplomat [7] explains why control of the littoral sea is so important: China intends to deploy its sea-based nuclear deterrent and by implication, much of its attack submarine force there:

    Possessing a credible sea-based nuclear deterrent is a priority for China’s military strategy. China’s single Type 092, or Xia-class, nuclear-powered ballistic missile submarine, equipped with short-range JL-1 submarine-launched ballistic missiles (SLBMs), has never conducted a deterrent patrol from the Bohai Sea since its introduction in the 1980s. However, China is on the verge of acquiring credible second-strike capabilities with the anticipated introduction of JL-2 SLBMs (with an estimated range of 8,000 kilometres) coupled with DF-31 and DF-31A road-mobile intercontinental ballistic missiles (ICBMs). In addition, China plans to introduce up to five Type 094, or Jin-class, SSBNs outfitted with the JL-2 missiles, while constructing an underwater submarine base on Hainan Island in the South China Sea. It’s clear, then, that China is making every effort to keep the South China Sea off limits, just as the Soviet Union did in the Sea of Okhotsk during the Cold War. …

    This strategy dates back almost two decades, to a time when China began encircling the South China Sea to fill the power vacuum created by the withdrawal of US forces from the Philippines in 1991. China reasserted ‘historical’ claims over all the islets, including the Paracel and Spratly archipelagos, and 80 percent of the 3.5 million km2 body of water along the nine-dotted U-shaped line, despite having no international legal ground to do so. Those islets can be used as air and sea bases for intelligence, surveillance, and reconnaissance activities, and as base points for claiming the deeper part of the South China Sea for PLAN ballistic missile submarines and other vessels. China also interprets the UN Convention on the Law of the Sea (UNCLOS) in an arbitrary manner and doesn’t accept military activities by foreign vessels and overflight in its waters.

Therefore China is likely to have forward and aggressive ideas of its own.

Geography has condemned Vietnam and the Philippines to sooner or later become part of Chinese strategic calculations. Relative distances ensure that the more things change, the more they remain the same. If the “air sea battle” returns to the Pacific it will involve all the old familiar names.

Storming the Castle at Amazon Kindle for $3.99 [8]
No Way In at Amazon Kindle $3.99, print $9.99 [9]
Tip Jar or Subscribe for $5 [10]
(Thumbnail on PJM homepage by Shutterstock.com [11].)

Article printed from Belmont Club: http://pjmedia.com/richardfernandez

URL to article: http://pjmedia.com/richardfernandez/2011/11/10/tales-of-the-western-pacific/

URLs in this post:

[1] Pentagon: http://www.washingtontimes.com/news/2011/nov/9/pentagon-battle-concept-signals-cold-war-posture-o/

[2] Wall Street Journal: http://blogs.wsj.com/chinarealtime/2011/11/10/battle-plans-tempt-chill-in-u-s-china-relations/?mod=google_news_blog

[3] AOL Defense: http://defense.aol.com/2011/11/10/air-sea-battle-whats-it-all-about-or-not/

[4] slated to announce an agreement with Australia: http://online.wsj.com/article/SB10001424052970203537304577028490161890480.html

[5] More than 120 US subs: http://www.flickr.com/photos/41311545@N05/4309910001/

[6] Image: http://pjmedia.com/richardfernandez/files/2011/11/comsubwespac.jpg

[7] Diplomat: http://the-diplomat.com/2011/07/18/why-china-wants-the-south-china-sea/

[8] Storming the Castle at Amazon Kindle for $3.99: http://www.amazon.com/exec/obidos/ASIN/B005MH19XI/wwwfallbackbe-20

[9] No Way In at Amazon Kindle $3.99, print $9.99: http://www.amazon.com/exec/obidos/ASIN/1453892818/wwwfallbackbe-20

[10] Tip Jar or Subscribe for $5: http://wretchard.com/tipjar.html

[11] Shutterstock.com: http://www.shutterstock.com/

Geography does not favor the Chinese; they are hemmed in by the Himalayas, the Gobi Desert and Siberia on land, and Korea, Japan, Taiwan and Indonesia hem the sea approaches. American Dominates the Pacific, and India will soon dominate the Indian Ocean. If America can forge some sort of alliance with its Anglosphere partners Australia and India, as well as Japan and Korea, then instead of "AirSea Battle", we may see a period of containment instead.

We will live in interesting times.

 

[a_majoor]

Check out the photos on this link. The Chinese are building huge structures in the desert (measuring kilometers long and wide), but for what purpose?

http://gizmodo.com/5859081/why-is-china-building-these-gigantic-structures-in-the-middle-of-the-desert

 

[a_majoor]

The rest of Asia does not seem interested in the return of the Middle Kingdom:

http://news.investors.com/Article/591952/201111161902/Asia-Tigers-Pick-US-Over-China.htm

Asia Rediscovers Its Love For America

Posted 11/16/2011 07:02 PM ET

Global Power: Much is being made of China's unease at President Obama's initiative this week to raise the U.S. presence in the Pacific Rim. The real story is Asia's unease with China's expansionism. It wants America back.

Beijing was taken by surprise at the U.S. president's newfound interest in making America a presence again in the Pacific.

But in reality it was a sign that Asian states prefer a U.S.-centric Pacific over a China-centric one.

On his visit to Hawaii, Bali and Australia, Obama announced that 2,500 U.S. troops would be stationed in northern Australia, a move welcomed with open arms not just by Australia but across the Pacific.

Obama also announced that the "broad outlines" of the Trans-Pacific Partnership eight-nation free trade zone were advancing, with major new nations — Japan, Canada and Mexico seeking entry — a big vote of confidence in America from a region that accounts for 60% of world trade. The State Department, meanwhile, announced a big, generous aid package for flood-ravaged Thailand.

Coming on the heels of Obama's signature on the U.S.-South Korea free trade treaty, the signal is unmistakable: America's back after a long period of neglect, and "We're here to stay," as Obama said.

No wonder Australia's prime minister, Julia Gillard, couldn't conceal her delight.

Up until now, the only message being sent by this White House was of kowtowing, isolationism and weakness in the face of a supposedly inevitably rising China.

The media made much of Beijing's discomfort at the new American assertiveness, as if there was something unnatural about it. "China uneasy over U.S. troop deal in Australia," blared the headline in the U.K. Guardian.

But Beijing's discomfort is irrelevant — it's a tyranny and Asia's neighborhood bully. It's not the model of economic development many believe, as its growing imbalances show. Nor is it a particularly peaceful presence.

China is building a deepwater navy patrolling sea lanes, intimidating Asian nations with territorial claims up and down the Pacific. It's aiming satellite surveillance on Asian states and has launched cyberattacks.

Beijing's neighbors — the tiger states of Southeast Asia, the allies of northeast Asia, such as Japan, Taiwan and Korea, along with Australia and New Zealand, are all uncomfortable with China's rising assertiveness.

Like it or not, the U.S. has a historic 60-year role as the most important player in Asia.

The U.S.'s Great White Fleet patrolling Pacific sea lanes has been the foundation that enabled the Southeast Asian nations to peacefully rise out of poverty in the fastest economic transformation of a region within just a generation, and preserved peace in the north, too. They all know where that came from.

The reality is, Obama's newfound interest in Asia is in response to a region that has seen what a world without America looks like after China's rise to prominence.

Despite the claims of pundits like the New York Times' Thomas Friedman — who claim that China's system is superior to our own — the fact is, Asia prefers a return to the U.S. way of peace and growth.

 

[a_majoor]

Follow up to the mysterious objects in the Gobi Desert:

http://www.livescience.com/17052-mysterious-symbols-china-desert-spy-satellite-targets-expert.html

Mysterious Symbols in China Desert Are Spy Satellite Targets, Expert Says
Natalie Wolchover, Life's Little Mysteries Staff Writer
Date: 15 November 2011 Time: 05:41 PM ET

A strange zigzag pattern in the Gobi Desert in China. Coordinates: 40.452107,93.742118. Credit: Copyright 2011 Google - Imagery copyright Cnes/Spot Image, DigitalGlobe, GeoEye
A strange zigzag pattern in the Gobi Desert in China. Coordinates: 40.452107,93.742118.
CREDIT: Copyright 2011 Google - Imagery copyright Cnes/Spot Image, DigitalGlobe, GeoEye
View full size image

Newfound Google Maps images have revealed an array of mysterious structures and patterns etched into the surface of China's Gobi Desert. The media — from mainstream to fringe — has wildly speculated that they might be Chinese weapons-testing sites, satellite calibration targets, street maps of Washington, D.C., and New York City, or even messages to (or from) aliens.

It turns out that they are almost definitely used to calibrate China's spy satellites.

So says Jonathon Hill, a research technician and mission planner at the Mars Space Flight Facility at Arizona State University, which operates many of the cameras used during NASA's Mars missions. Hill works with images of the Martian surface taken by rovers and satellites, as well as data from Earth-orbiting NASA instruments.

The grids of zigzagging white lines seen in two of the images — the strangest of the various desert structures — are spy satellite calibration targets. Satellite cameras focus on the grids, which measure approximately 0.65 miles wide by 1.15 miles long, and use them to orient themselves in space. [Gallery: Mysterious Structures In China's Gobi Desert]

The existence of these calibration targets may seem suspicious or revelatory, but Hill said it really isn't; China was already known to operate spy satellites, and many other countries (including the United States) do so as well. In fact, the U.S. also uses calibration targets. "An example I found just now is a calibration target for the Corona spy satellites, built back in the 1960s, down in Casa Grande, Ariz., [at coordinates] 32° 48' 24.74" N, 111° 43' 21.30" W," Hill told Life's Little Mysteries, a sister site to LiveScience.

The 65-foot-wide white lines that make up China's grids are not made of reflective metal as many news sites have suggested. "They have gaps in them where they cross little natural drainage channels and the lines themselves are not perfectly filled in, with lots of little streaks and uneven coverage. I think it's safe to say these are some kind of paint," Hill said, noting that if they were made of white dust or chalk, the wind would have caused them to streak visibly.

The calibration targets are larger than might have been expected, he said, suggesting that the satellite cameras they are being used to calibrate have surprisingly poor ground resolution.

Another strange image taken not far away shows a Stonehenge-like arrangement of objects radiating outward, with fighter jets parked at its center. "This is almost certainly a calibration/test target for orbital radar instruments," Hill said. "Since a significant amount of radar return is due to differences in surface roughness, they're probably testing ways of making the areas around planes 'bumpy' enough that the planes are partially masked."

In other words, the Chinese military probably uses radar instruments to send signals down at the target from above, and determine how much radar bounces back to the instruments from the fighter jets, and how much gets scattered by the Stonehenge-like arrangement of bumps surrounding them. From this, the country's radar experts can learn how best to hide China's military operations from other countries' satellites, and possibly get clues for how to find carefully hidden objects in other countries. However, the fact that the planes are made out of metal will increase their radar return and make it very hard to completely mask them, Hill said.

Since the initial reports of these structures became widespread, industrious readers of the gadget blog Gizmodo have spotted a few more interesting structures in China. One, Hill said, appears to be a weapons testing zone, perhaps for evaluating explosives. Elsewhere, a giant grid resembles a Yagi antenna array. Instruments like this can be used for any number of things, such as weather tracking, space weather tracking and high-altitude atmospheric research.

Hill noted that most of these structures are quite closer to each other. "I think we're seeing some sort of military zone/test range, which explains the large amount of equipment and technology in an otherwise remote area," he said. "Sometimes the truth can be just as interesting, if not more so, than the conspiracies that people come up with."

This article was provided by Life's Little Mysteries, a sister site to LiveScience. Follow us on Twitter @llmysteries, then join us on Facebook. Follow Natalie Wolchover on Twitter @nattyover.

 

[a_majoor]

Perhaps the most nightmarish part of the article s how China could be derailed by unanticipated events in small, far off places. People counting on China to power the global economy might get a rude shock due to some tiny African backwater derailing the global logistics train set up by the Chinese:

http://blogs.the-american-interest.com/wrm/2011/11/17/chinas-global-nightmare/

China’s Global Nightmare

Brazil is of course happy to let foreign companies invest in its vast but difficult to access offshore oil reserves. China is interested in that oil — perhaps too interested. The FT recently reported this story:

China’s second largest state-controlled oil major Sinopec has signed a $5.2bn deal to buy 30 per cent of the Brazilian assets of Galp Energia, which include operations in the pre-salt fields, so-called because they lie under two kilometres of the stuff.
The deal is Sinopec’s second acquisition in the area after its $7.1bn investment in the Brazilian assets of Repsol YPF last year. Sinopec has also signed a $10bn oil-for-loan deal with Brazil. Elsewhere, Sinopec’s peer, Sinochem, has a $3.1bn stake in an offshore oil field in Brazil run by Norway’s Statoil…
But it is a partnership that will be fraught with difficulties with Brazil already growing suspicious of its increasingly close relationship with Beijing. China is now Brazil’s largest trading partner and last year was its biggest investor.

If Chinese state-owned companies are involved at every level of the pre-salt programme, Brazil may start to wonder whether it is ceding too much influence to a foreign government over what is considered a highly strategic asset.

So strategic, in fact, that former president Luiz Lula da Silva changed the law to give Petrobras the status of sole operator of the area. In one of his other last acts as leader, Lula da Silva also changed the land law to prohibit foreigners from acquiring large tracts of farmland, a measure seen as aimed at China.

The real importance of this story does not, however, have much to do with Brazil’s jittery nerves about Chinese investment.  It is to remind us about a key Chinese vulnerability that is often overlooked by pundits: China’s growing dependence on natural resources located far from its frontiers.
Beijing’s chosen national strategy — to achieve great power status by becoming the industrial workshop of the world — locks it into a complex and difficult set of dependencies and relationships with countries and markets all over the world. Access to those resources traps China in complicated geopolitical tradeoffs that can blow up in unexpected ways — as when China had to scramble to protect its citizens in Libya.  Chinese companies become the object of public anger if they are seen to be economically exploitative, unwelcoming to local labor, or environmentally destructive.  And, of course, in the event of a confrontation with the United States, China’s entire supply chain and overseas investments are helpless hostages.

Strategically, the only way out of this trap would be to build a blue water navy and air force that could threaten US command of the seas.  But a build up of that kind would not only trigger a massive US response; other countries like Japan, India and Australia would join together to ensure that China did not overturn a maritime status quo that is well trusted by other world powers.
We live in an interesting world.

 

[tomahawk6]

The PRC hard at work stealing the resources of their neighbors.

A picture taken from a South Korean helicopter shows Chinese boats banded together with ropes, chased by a coastguard helicopter and rubber boats pacted with commandoes, after alleged illegal fishing in South Korean waters in the Yellow Sea off the southwestern coast county of Buan. South Korea's coastguard mobilised 12 ships, four helicopters and commandoes for a special three-day crackdown on illegal fishing by Chinese boats this week.

 

A picture taken on November 16, 2011 from a South Korean helicopter shows Chinese fishermen wielding sticks to stop an attack by South Korean coastguard commandoes armed with clubs aboard rubber boats during a crackdown on alleged illegal fishing in South Korean waters in the Yellow Sea off the southwestern coast county of Buan. South Korea's coastguard mobilised 12 ships, four helicopters and commandoes for a special three-day crackdown on illegal fishing by Chinese boats this week.

 

[chanman]

Hmm, I didn't realize the SK Coast Guard flew Kamovs

 

[tomahawk6]

The ROK's have a number of Ka-32A4's for SAR missions.

 

[a_majoor]

The Chinese must be wondering how things unravelled, and everyone is wondering what the response will be:

http://blogs.the-american-interest.com/wrm/2011/11/19/softly-softly-beijing-turns-other-cheek-for-now/

Softly, Softly: Beijing Turns Other Cheek — For Now
WALTER RUSSELL MEAD

The cascade of statements, deployments, agreements and announcements from the United States and its regional associates in the last week has to be one of the most unpleasant shocks for China’s leadership — ever.  The US is moving forces to Australia, Australia is selling uranium to India, Japan is stepping up military actions and coordinating more closely with the Philippines and Vietnam in the South China Sea, Myanmar is slipping out of China’s column and seeking to reintegrate itself into the region, Indonesia and the Philippines are deepening military ties with the the US: and all that in just one week. If that wasn’t enough, a critical mass of the region’s countries have agreed to work out a new trade group that does not include China, while the US, to applause, has proposed that China’s territorial disputes with its neighbors be settled at a forum like the East Asia Summit — rather than in the bilateral talks with its smaller, weaker neighbors that China prefers.

Rarely has a great power been so provoked and affronted.  Rarely have so many red lines been crossed.  Rarely has so much face been lost, so fast.  It was a surprise diplomatic attack, aimed at reversing a decade of chit chat about American decline and disinterest in Asia, aimed also at nipping the myth of “China’s inexorable rise” in the bud.

The timing turned out to be brilliant.  China is in the midst of a leadership transition, when it is harder for important decisions to be taken quickly.  The economy is looking shaky, with house prices falling across much of the country.  The diplomatic blitzkrieg moved so fast and on so many fronts, with the strokes falling so hard and in such rapid succession, that China was unable to develop an organized and coherent response.  And because Wen Jiabao’s appearance at the East Asia Summit, planned long before China had any inkling of the firestorm about to be unleashed, could not be canceled or changed, premier Wen Jiabao was trapped: he had to respond in public to all this while China was off balance and before the consultation, reflection and discussion that might have created an effective response.

Xi Jinping, expected to be the next chairman of the Communist Party in China

In this position, he acted prudently, which is to say he did as little as possible.  His public remarks were mild.  He did not pound his fist (or, like former Soviet leader Nikita Khrushchev, his shoe) on the table.  He did not rage against and upbraid his neighbors.  He did not launch tirades about American arrogance and aggression.  He uttered no threats but renounced no claims; he even participated in a quick unscheduled meeting with President Obama.

The effect of this passive and low key response (the only thing really, he could have done) is to reinforce the sense in Asia that the US has reasserted its primacy in a convincing way.  The US acted, received strikingly widespread support, and China backed down.
That is in fact what happened, and it was as decisive a diplomatic victory as anyone is likely to see.  Congratulations should go to President Obama and his national security team.  The State Department, the Department of Defense and the White House have clearly been working effectively together on an intensive and complex strategy.  They avoided leaks, they coordinated effectively with half a dozen countries, they deployed a range of instruments of power.  In the field of foreign policy, this was a coming of age of the Obama administration and it was conceived and executed about as flawlessly as these things ever can be.

It will not change the fundamental dynamics of a re-election race shaped so far by voter concern about poor economic performance, but the effects of the President’s re-assertion of American primacy in the Pacific will reinforce the public perception that he has grown into the foreign policy side of his job.  He looked very presidential in Asia; those things count.

But a successful opening is not the same thing as a final win.  The opening American gambit in the new great game was brilliant, but China also gets a move.  On the one hand, the sweep, the scope and the success of the American moves make it hard for China to respond in kind; on the other hand, the humiliation and frustration (and, in some quarters, the fear) both inside the government and in society at large over these setbacks will compel some kind of response.

China, mindless conventional “decline” wisdom to the contrary, is much weaker and poorer than the United States, yet it is Chinese power rather than American supremacy that China’s neighbors most fear.  China’s diplomacy faces an infuriating paradox: If it accepts the renewal of a US-based order in Asia it looks weak and is forced into an inferior political position; if it openly fights that order it alarms its neighbors into clinging more closely to Uncle Sam.

This reality constrains China’s response in many ways, but China cannot remain passive.  China must now think carefully about its choices and to work to use all the factors of its power to inflict some kind of counterblow against the United States.  Look for China to reach out much more intensively to Russia to find ways in which the two powers can frustrate the US and hand it some kind of public setback.  Pakistan?  Iran?  Afghanistan? Palestine?

Regionally, China may try to detach one or more countries from the American system by some combination of economic influence and political ties.  It will take advantage of the fact that the other Asian powers do not want the United States to be too dominant; they may fear China more than they fear us, but their aim is to maximize their own independence, not to strengthen US power.

Longer term, the conviction in the military and among hard liners in the civilian establishment that the US is China’s enemy and seeks to block China’s natural rise will not only become more entrenched and more powerful; it will have consequences.  Very experienced and well informed foreign diplomats and observers already warn that the military is in many respects becoming independent of political authorities and some believe that like the Japanese military in the 1930s, China’s military or factions within it could begin to take steps on critical issues that the political authorities could not reverse.  Islands could be occupied, flags raised and shots fired.

Certainly any Chinese arguments against massive military build ups will be difficult to win.  The evident weakness of China’s position will make it impossible to resist calls for more military spending and an acceleration of the development of China’s maritime capacity.

Many people in China (and elsewhere for that matter) believe that China’s massive holdings of US debt give China great power in the international system.  Via Meadia thinks that those ideas are largely wrong and that any efforts to treat those reserves as a political instrument would be more likely to harm China than the United States.  After all, a mass sell-off of China’s reserves would drive down the dollar — meaning in the first instance that China would take a massive hit on the value of the securities it was selling, and then that China’s markets in the US and likely also Europe would collapse in the ensuing global economic firestorm.  The US would likely emerge from this faster and in better shape than China.

Nevertheless, the belief that China’s foreign reserves are an asset that can somehow be played to win political points is a strong one in China, and there will be great pressure in Beijing to play this card at the first available opportunity.  What that might mean in practice is hard to predict, but US diplomats, bankers and strategists will need to keep in mind that China will be looking to weaponize its dollar hoard.

An intense debate in China will now turn even more pointed.  There will be some who counsel patience, saying that China cannot win an open contest with the US and that its only hope is to stick with the concept of “peaceful rise”: eschewing all conflict with the US and its neighbors, behaving as a “responsible stakeholder” in the US-built international system, and growing richer and more powerful until such a time as alternative strategies can be considered.  That in my opinion is China’s wisest course.

Others will argue that the international system as it now exists, and American power in it, are weapons in the hands of a country which is deeply hostile to China and its government and that the US will not rest until China, like Russia, has been reduced to impotence.  They think (they really do) that our aim is to overthrow the Communist government, replace it with something weak and ineffective — as in Yeltsin’s Russia — and then break up its territory the way the Soviet Union broke up.  Taiwan, Tibet, Xinjiang, perhaps more will be split off until China is left as a weak and helpless member of an ever more ruthless American order.  To act like a “responsible stakeholder” in the international system would be to tie the knot in the noose intended to hang you; China must resist now, and ally itself with everyone willing to fight this power: Iran, Russia, Syria, Venezuela, Pakistan, perhaps even Al-Qaeda. And rather than trying to prop up the international capitalist system, China should do what it can to deepen crises and aggravate tensions.

I think this course leads to a strategic dead end for China and China’s diplomats are much too experienced and knowledgeable to be taken in by it.  The military and nationalist public opinion may be more vulnerable to arguments of this kind.  These forces are too strong to be completely excluded from China’s policy making; expect some provocative push back.

The US has won the first round, but the game has just begun.  The Obama administration and its successors will now have to deal with a long term contest against the world’s most populous country and the world’s most rapidly developing economy.  The Obama administration may not have fully counted the costs of the new Asian hard line; for one thing, it is hard to see significant cuts coming in defense spending after we have challenged China to a contest over the future of Asia.  It’s possible that less drama now might have made America’s point as effectively while reducing the chance of Chinese push back, but there is not a lot of point in debating that now.

Given where things now stand, follow through will be as important as the first steps; the US must now try to make it as easy as possible for China to accept a situation that, in the short to medium term at least, it cannot change.

 

[Edward Campbell]

Much as I admire Mead, especially on America, I think he is being just a bit hyperbolic.

Yes, the laundry list of woes in his opening paragraph are 'real' but they are not shocks.

Mead is right, the Americans have orchestrated a series of events during a time when China is focused on its own internal matters - much as the US will be next (election) year.

Where I think Mead goes off the rails is when he says, "China cannot remain passive." In fact China can and most likely will remain "passive" for quite some time, almost an eternity in our frenetic, Western terms. China need do nothing. Australia, despite its firm commitment to the USA and the West is dependent on the Chinese market; it is trying to sell more and more to other Asians but the Chinese remain key to Australia's financial security. Ditto Japan. "Losing" Burma (Myanmar) is rather like "losing" North Korea: something the Chinese are trying to do.

 

[The Bread Guy]

Interesting approach.....

Much like the U.S., China is aiming to address a problematic demographic that has recently emerged: a generation of jobless graduates. China’s solution to that problem, however, has some in the country scratching their heads.

China’s Ministry of Education announced this week plans to phase out majors producing unemployable graduates, according to state-run media Xinhua. The government will soon start evaluating college majors by their employment rates, downsizing or cutting those studies in which less than 60% of graduates fail for two consecutive years to find work.

The move is meant to solve a problem that has surfaced as the number of China’s university educated have jumped to 8,930 people per every 100,000 in 2010, up nearly 150% from 2000, according to China’s 2010 Census. The surge of collge grads, while an accomplishment for the country, has contributed to an overflow of workers whose skillsets don’t match with the needs of the export-led, manufacturing-based economy .....

 

[FoverF]

Interesting approach.....

Yes, please.

 

[MedCorps]

This is a good read. 

The Chinese People’s Liberation Army Signals Intelligence and Cyber Reconnaissance Infrastructure

http://project2049.net/documents/pla_third_department_sigint_cyber_stokes_lin_hsiao.pdf

Someone is spending a few Renminbi on this little set up.  The General Staff Department - Third Department will take care of all of your needs.

MC

(China - Second Bureau - members of the 61398 Unit - when you are reading this post please update my file to note that I am not a SIGINT dude and stumbled across by accident when looking for how to re-program my garage door code).

 

[a_majoor]

The Red Dynasty may end up deligitimizing itself:

http://online.wsj.com/article/SB10001424053111904491704576572552793150470.html?mod=lifestyle_newsreel

Children of the Revolution
China's 'princelings,' the offspring of the communist party elite, are embracing the trappings of wealth and privilege—raising uncomfortable questions for their elders.

By JEREMY PAGE

One evening early this year, a red Ferrari pulled up at the U.S. ambassador's residence in Beijing, and the son of one of China's top leaders stepped out, dressed in a tuxedo.

Bo Guagua, 23, was expected. He had a dinner appointment with a daughter of the then-ambassador, Jon Huntsman.

The car, though, was a surprise. The driver's father, Bo Xilai, was in the midst of a controversial campaign to revive the spirit of Mao Zedong through mass renditions of old revolutionary anthems, known as "red singing." He had ordered students and officials to work stints on farms to reconnect with the countryside. His son, meanwhile, was driving a car worth hundreds of thousands of dollars and as red as the Chinese flag, in a country where the average household income last year was about $3,300.

The episode, related by several people familiar with it, is symptomatic of a challenge facing the Chinese Communist Party as it tries to maintain its legitimacy in an increasingly diverse, well-informed and demanding society. The offspring of party leaders, often called "princelings," are becoming more conspicuous, through both their expanding business interests and their evident appetite for luxury, at a time when public anger is rising over reports of official corruption and abuse of power.

State-controlled media portray China's leaders as living by the austere Communist values they publicly espouse. But as scions of the political aristocracy carve out lucrative roles in business and embrace the trappings of wealth, their increasingly high profile is raising uncomfortable questions for a party that justifies its monopoly on power by pointing to its origins as a movement of workers and peasants.

Their visibility has particular resonance as the country approaches a once-a-decade leadership change next year, when several older princelings are expected to take the Communist Party's top positions. That prospect has led some in Chinese business and political circles to wonder whether the party will be dominated for the next decade by a group of elite families who already control large chunks of the world's second-biggest economy and wield considerable influence in the military.

"There's no ambiguity—the trend has become so clear," said Cheng Li, an expert on Chinese elite politics at the Brookings Institution in Washington. "Princelings were never popular, but now they've become so politically powerful, there's some serious concern about the legitimacy of the 'Red Nobility.' The Chinese public is particularly resentful about the princelings' control of both political power and economic wealth."

The current leadership includes some princelings, but they are counterbalanced by a rival nonhereditary group that includes President Hu Jintao, also the party chief, and Premier Wen Jiabao. Mr. Hu's successor, however, is expected to be Xi Jinping, the current vice president, who is the son of a revolutionary hero and would be the first princeling to take the country's top jobs. Many experts on Chinese politics believe that he has forged an informal alliance with several other princelings who are candidates for promotion.

Among them is the senior Mr. Bo, who is also the son of a revolutionary leader. He often speaks of his close ties to the Xi family, according to two people who regularly meet him. Mr. Xi's daughter is currently an undergraduate at Harvard, where Mr. Bo's son is a graduate student at the Kennedy School of Government.

    “Princelings were never popular, but now ... there's some serious concern about the legitimacy of the "Red Nobility." ”

Already in the 25-member Politburo, Bo Xilai is a front-runner for promotion to its top decision-making body, the Standing Committee. He didn't respond to a request for comment through his office, and his son didn't respond to requests via email and friends.

The antics of some officials' children have become a hot topic on the Internet in China, especially among users of Twitter-like micro-blogs, which are harder for Web censors to monitor and block because they move so fast. In September, Internet users revealed that the 15-year-old son of a general was one of two young men who crashed a BMW into another car in Beijing and then beat up its occupants, warning onlookers not to call police.

An uproar ensued, and the general's son has now been sent to a police correctional facility for a year, state media report.

Top Chinese leaders aren't supposed to have either inherited wealth or business careers to supplement their modest salaries, thought to be around 140,000 yuan ($22,000) a year for a minister. Their relatives are allowed to conduct business as long as they don't profit from their political connections. In practice, the origins of the families' riches are often impossible to trace.

Last year, Chinese learned via the Internet that the son of a former vice president of the country—and the grandson of a former Red Army commander—had purchased a $32.4 million harbor-front mansion in Australia. He applied for a permit to tear down the century-old mansion and to build a new villa, featuring two swimming pools connected by a waterfall. (See the article below.)

Many princelings engage in legitimate business, but there is a widespread perception in China that they have an unfair advantage in an economic system that, despite the country's embrace of capitalism, is still dominated by the state and allows no meaningful public scrutiny of decision making.

The state owns all urban land and strategic industries, as well as banks, which dole out loans overwhelmingly to state-run companies. The big spoils thus go to political insiders who can leverage personal connections and family prestige to secure resources, and then mobilize the same networks to protect them.

The People's Daily, the party mouthpiece, acknowledged the issue last year, with a poll showing that 91% of respondents believed all rich families in China had political backgrounds. A former Chinese auditor general, Li Jinhua, wrote in an online forum that the wealth of officials' family members "is what the public is most dissatisfied about."

One princeling disputes the notion that she and her peers benefit from their "red" backgrounds. "Being from a famous government family doesn't get me cheaper rent or special bank financing or any government contracts," Ye Mingzi, a 32-year-old fashion designer and granddaughter of a Red Army founder, said in an email. "In reality," she said, "the children of major government families get very high scrutiny. Most are very careful to avoid even the appearance of improper favoritism."

For the first few decades after Mao's 1949 revolution, the children of Communist chieftains were largely out of sight, growing up in walled compounds and attending elite schools such as the Beijing No. 4 Boys' High School, where the elder Mr. Bo and several other current leaders studied.

In the 1980s and '90s, many princelings went abroad for postgraduate studies, then often joined Chinese state companies, government bodies or foreign investment banks. But they mostly maintained a very low profile.

Now, families of China's leaders send their offspring overseas ever younger, often to top private schools in the U.S., Britain and Switzerland, to make sure they can later enter the best Western universities. Princelings in their 20s, 30s and 40s increasingly take prominent positions in commerce, especially in private equity, which allows them to maximize their profits and also brings them into regular contact with the Chinese and international business elite.

In 2008, Bo Guagua invited Jackie Chan to lecture at Oxford—and sang with him on stage at one point.

Younger princelings are often seen among the models, actors and sports stars who gather at a strip of nightclubs by the Workers' Stadium in Beijing to show off Ferraris, Lamborghinis and Maseratis. Others have been spotted talking business over cigars and vintage Chinese liquor in exclusive venues such as the Maotai Club, in a historic house near the Forbidden City.

On a recent afternoon at a new polo club on Beijing's outskirts, opened by a grandson of a former vice premier, Argentine players on imported ponies put on an exhibition match for prospective members.

"We're bringing polo to the public. Well, not exactly the public," said one staff member. "That man over there is the son of an army general. That one's grandfather was mayor of Beijing."

Princelings also are becoming increasingly visible abroad. Ms. Ye, the fashion designer, was featured in a recent edition of Vogue magazine alongside Wan Baobao, a jewelry designer who is the granddaughter of a former vice premier.

But it is Bo Guagua who stands out among the younger princelings. No other child of a serving Politburo member has ever had such a high profile, both at home and abroad.

His family's status dates back to Bo Yibo, who helped lead Mao's forces to victory, only to be purged in the 1966-76 Cultural Revolution. Bo Yibo was eventually rehabilitated, and his son, Bo Xilai, was a rising star in the party by 1987, when Bo Guagua was born.

The boy grew up in a rarefied environment—closeted in guarded compounds, ferried around in chauffeur-driven cars, schooled partly by tutors and partly at the prestigious Jingshan school in Beijing, according to friends.

In 2000, his father, by then mayor of the northeastern city of Dalian, sent his 12-year-old son to a British prep school called Papplewick, which according to its website currently charges £22,425 (about $35,000) a year.

About a year later, the boy became the first person from mainland China to attend Harrow, one of Britain's most exclusive private schools, which according to its website currently charges £30,930 annually.

In 2006, by which time his father was China's commerce minister, Mr. Bo went to Oxford University to study philosophy, politics and economics. The current cost of that is about £26,000 a year. His current studies at Harvard's Kennedy School cost about $70,000 a year.

    “'The children of major government families get very high scrutiny,' says the granddaughter of a Red Army founder.”

A question raised by this prestigious overseas education, worth a total of almost $600,000 at today's prices, is how it was paid for. Friends said that they didn't know, though one suggested that Mr. Bo's mother paid with the earnings of her legal career. Her law firm declined to comment.

Bo Guagua has been quoted in the Chinese media as saying that he won full scholarships from age 16 onward. Harrow, Oxford and the Kennedy School said that they couldn't comment on an individual student.

The cost of education is a particularly hot topic among members of China's middle class, many of whom are unhappy with the quality of schooling in China. But only the relatively rich can send their children abroad to study.

For others, it is Bo Guagua's freewheeling lifestyle that is controversial. Photos of him at Oxford social events—in one case bare-chested, other times in a tuxedo or fancy dress—have been widely circulated online.

In 2008, Mr. Bo helped to organize something called the Silk Road Ball, which included a performance by martial-arts monks from China's Shaolin temple, according to friends. He also invited Jackie Chan, the Chinese kung fu movie star, to lecture at Oxford, singing with him on stage at one point.

The following year, Mr. Bo was honored in London by a group called the British Chinese Youth Federation as one of "Ten Outstanding Young Chinese Persons." He was also an adviser to Oxford Emerging Markets, a firm set up by Oxford undergraduates to explore "investment and career prospects in emerging markets," according to its website.

This year, photos circulated online of Mr. Bo on a holiday in Tibet with another princeling, Chen Xiaodan, a young woman whose father heads the China Development Bank and whose grandfather was a renowned revolutionary. The result was a flurry of gossip, as well as criticism on the Internet of the two for evidently traveling with a police escort. Ms. Chen didn't respond to requests for comment via email and Facebook.

Asked about his son's apparent romance at a news conference during this year's parliament meeting, Bo Xilai replied, enigmatically, "I think the business of the third generation—aren't we talking about democracy now?"

Friends say that the younger Mr. Bo recently considered, but finally decided against, leaving Harvard to work on an Internet start-up called guagua.com. The domain is registered to an address in Beijing. Staff members there declined to reveal anything about the business. "It's a secret," said a young man who answered the door.

It is unclear what Mr. Bo will do after graduating and whether he will be able to maintain such a high profile if his father is promoted, according to friends. He said during a speech at Peking University in 2009 that he wanted to "serve the people" in culture and education, according to a Chinese newspaper, Southern Weekend.

He ruled out a political career but showed some of his father's charisma and contradictions in answering students' questions, according to the newspaper. Asked about the pictures of him partying at Oxford, he quoted Chairman Mao as saying "you should have a serious side and a lively side," and went on to discuss what it meant to be one of China's new nobility.

"Things like driving a sports car, I know British aristocrats are not that arrogant," he said. "Real aristocrats absolutely don't do that, but are relatively low-key."
—Dinny McMahon contributed to this article.

 

[cupper]

Interesting article. Even if the estimates in the report are only half as purported, it raises some serious concerns.

Georgetown students shed light on China’s tunnel system for nuclear weapons

http://www.washingtonpost.com/world/national-security/georgetown-students-shed-light-on-chinas-tunnel-system-for-nuclear-weapons/2011/11/16/gIQA6AmKAO_story.html

The Chinese have called it their “Underground Great Wall” — a vast network of tunnels designed to hide their country’s increasingly sophisticated missile and nuclear arsenal.

For the past three years, a small band of obsessively dedicated students at Georgetown University has called it something else: homework.

Led by their hard-charging professor, a former top Pentagon official, they have translated hundreds of documents, combed through satellite imagery, obtained restricted Chinese military documents and waded through hundreds of gigabytes of online data.

The result of their three-year effort? The largest body of public knowledge about thousands of miles of tunnels dug by the Second Artillery Corps, a secretive branch of the Chinese military in charge of protecting and deploying its ballistic missiles and nuclear warheads.

The study has not yet been released, but already it has sparked a congressional hearing and been circulated among top officials in the Pentagon, including the Air Force vice chief of staff.