Chinese Military,Political and Social Superthread

[Edward Campbell]

This article, reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail, is a reminder of how obscure Chinese politics can be:

http://www.theglobeandmail.com/news/politics/brewing-scandal-in-china-could-be-a-reality-check-for-harper/article2334141/

Brewing scandal in China could be a reality check for Harper

MARK MACKINNON

Guangzhou, China— Globe and Mail Update
Published Friday, Feb. 10, 2012

It’s the biggest political scandal to hit China in years, and Prime Minister Stephen Harper is about to land in the middle of it.

Bo Xilai, the charismatic and controversial Communist Party boss of Chongqing – the last stop Mr. Harper’s five-day, three-city visit to China – was until this week seen as a rising political star, all but certain to be promoted to the all-powerful Standing Committee of the Politburo during a once-in-a-decade transfer of power that begins this fall ... more in the original

The Chinese Communits party is not monolithic; there is a "hard left" wing, represented by Bo Xilai's red culture movement, there is a "hard right" wing represented by former leaders Jiang Zemin's Shanghai gang and a centre left movement represented by Hu Jintoa's current administration. Neither Jiang nor Hu was ever able to build a strong enough coalition in the Standing Committee to select their own successors.

The party aims for a sort of meritocracy but we have no way of measuring its success because the processes by which the members of the all powerful political centre are chosen remains very private.

Bo Xilai is for the high jump according to 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/china-removes-top-leadership-contender-from-chongqing-post/article2369764/

China removes top leadership contender from Chongqing post

MARK MACKINNON

BEIJING— Globe and Mail Update
Published Wednesday, Mar. 14, 2012


China’s usually staid political scene was rocked by an earthquake Thursday as a leading contender for a post in the next Politburo was sacked from his job amid an ongoing police investigation.

For the past five years, Bo Xilai has used his post as Communist Party boss of the southwestern city Chongqing to promote his vision of a throwback China that focused on social justice and promoted Maoist ideals. In the process he became one of the most visible and popular politicians in a country ruled by grey technocrats. It was considered almost certain that he would be elevated to the country’s all-powerful Standing Committee of the Politburo during a leadership shuffle this fall.

Mr. Bo’s future rise was seen as so certain that Prime Minister Stephen Harper made a special point of meeting him on his recent trip to China.

But a terse announcement Thursday on the official Xinhua newswire likely put an end to such ambitions. The bulletin simply declared “Comrade Bo Xilai no longer serves as Party Secretary for Chongqing” and announced that Vice-Premier Zhang Dejiang had replaced him.

Mr. Bo’s sudden and spectacular downfall started last month when Wang Lijun, who had served as Mr. Bo’s right-hand man and police chief in Chongqing, took refuge inside the United States consulate in the nearby city of Chengdu. Mr. Wang emerged after spending a night in the consulate on the condition that he would surrender only to the central leadership in Beijing, not the local police.

The scandal surrounding Mr. Wang broke just days before Mr. Harper arrived in Chongqing, though Mr. Bo went through with the meeting as though everything was normal.

Mr. Wang has since disappeared – official reports say he is receiving “vacation-style treatment” – and rumours have swirled ever since about what information he gave to American diplomats, and what he had to say to the Communist Party chiefs in Beijing.

It’s not yet clear if the scandal will have a wider impact on the Communist Party’s sensitive power transfer. Seven of the nine current members of the Standing Committee of the Politburo are expected stand aside this fall for a new generation headed by current Vice-President Xi Jinping. Mr. Bo was often portrayed as the face of the conservative wing of the Communist Party, jockeying for power and influence on the next Politburo against a liberal wing headed by Guangdong secretary Wang Yang.

Making the announcement more shocking inside China is Mr. Bo’s heritage. As the son of Bo Yibo, who is considered a hero of the 1949 revolution and one of the “eight immortals” of the Communist Party, the 62-year-old Mr. Bo was thus seen as a “princeling,” a second-generation Communist leader (like Mr. Xi) whose family name put him on a fast track to power.

Mr. Bo’s eye-catching policies in Chongqing raised his profile further. He initially made waves through an anti-mafia crackdown that broke the city’s powerful triads, while simultaneously drawing criticisms for the lack of due process while obtaining convictions.

He later emerged as the vanguard of a resurgent Maoist movement in China, instructing Chongqing citizens to learn Mao-era songs and bombarding them with text messages of his favourite quotes from the Chairman. The campaigns made him the hero of the country’s leftists, who feel China has strayed too far from socialist ideology, but also raised concerns that Chongqing was flirting with the passions that sparked the bloody Cultural Revolution of the 1960s and 1970s.

Gossip about Mr. Bo’s fate dominated the recent meeting of China’s rubberstamp parliament, the National People’s Congress, which finished its annual session on Wednesday. Mr. Bo seemed confident when addressing the media, but was also noticeably absent at key moments.

“I feel like I put my trust in the wrong person,” Mr. Bo said when asked about Mr. Wang’s disappearance.

Premier Wen Jiabao seemed to target Mr. Bo for unusual criticism during his annual press conference on Wednesday, telling reporters that the police investigation into what had taken place in Chongqing “will respect the truth and the law, and the public will be informed of the result.”

In what was interpreted as a jab at Mr. Bo’s policies in Chongqing, he then referenced the danger of another Cultural Revolution while speaking of the need for political reforms both in China in general and inside the Communist Party in particular.

“We have entered a critical point in the need for reforms. Without successful political reform, vital economic reforms cannot be carried out. The results of what we have achieved may be lost. A historical tragedy like the Cultural Revolution could be repeated. Each party member and cadre should feel a sense of urgency,” Mr. Wen said.

The CCP does have mechanisms for finding and dealing with corruption and deviation from the approved (Deng Xiaoping) party line ~ there are, probably, elements of anti-corruption in this decisions, but my sense is that it is mostly a party line issue: Hu Jintao has taken the party as far "left" (towards a "welfare state") as it is inclined to go.

Corruption remains a problem; in many respects modern China reminds me of late medieval England: no matter what the expressed wishes of the centre the provinces have a lot of autonomy - through the modern day equivalent of castellans and sheriffs - and ways must be found to pay off supporters while still sending the monarch, The General Secretary of the Central Committee in Beijing, his due. It is a system that breeds and needs corruption and it is a system the Chinese must, finally, after 2,500 years, put aside. The CCP understands this, I believe, but they have yet to find a way ... Western style democracy, even of the conservative Singapore style, is thought to be too inefficient and potentially chaotic.

 

[tomahawk6]

Bo Xilai’s Sacking Signals Showdown In China’s Communist Party

Premier Wen Jiabao’s shocking press conference and the ouster of party chief Bo Xilai signals a big showdown by pols who want a more liberal China.

by Rosemary Righter | March 15, 2012 12:00 PM EDT

Today’s unceremonious dismissal of Bo Xilai, the powerful and charismatic Party Secretary of China’s giant southwestern megalopolis of Chongqing, is a political earthquake that will send shockwaves across China.

Bo was bigger even than his big job: the most powerful and persuasive advocate in China for leftists and neo-Maoists who believe, as Bo pointedly observed in a Beijing press conference just last week, that if “only a few people are rich” at the end of a decade of breakneck economic growth, “then we are capitalists, we’ve failed.”

Bo touted his “Chongqing model” as a happy marriage of communist morality, social equality and economic efficiency, breaking growth records through booming state-owned corporations while spreading some of that wealth to workers in progressive socialist housing, education and health programs. He reveled in Maoist-style slogans. His “Sing Red and Strike Black” campaign, an odd juxtaposition of Maoist revivalism with ruthless crime-busting, struck a chord with many Chinese angered both by corruption and by the enormous gulf between rich and poor that many blame on economic liberalisation.

Bo also carried the clout that comes from being one of the “princelings”—sons of the big heroes of the 1949 revolution, considered until very recently to be untouchable. He was strongly placed for the ultimate political elevation this October, expected to secure one of the nine seats on the all-powerful Politburo Standing Committee—a committee his detractors (who call him a “little Mao”) feared Bo would come to dominate. And indeed, there is a whiff of the 1976 fall of the Gang of Four in Bo’s abrupt defenestration.



China's Chongqing Municipality Communist Party Secretary Bo Xilai attends the closing session of the National Peoples Congress (NPC) at The Great Hall Of The People on March 14, 2012 in Beijing, China. , Lintao Zhang / Getty Images

It is a measure of the difficulty Bo Xilai’s ideological challenge posed to the Beijing leadership that it clearly felt compelled, the day before the axe fell, to make the case against him to the nation, under the authority of no less a figure than Chinese Prime Minister Wen Jiabao. In a broadcast press conference, Wen deliberately studded his speech with clues that Bo’s political fate was sealed.

Party press conferences in China are not supposed to be exciting events—certainly not mere months before the leadership hands over power to the next generation, and all cadres must stage impressive displays of party unity. So Wen Jiabao’s three-hour encounter with foreign and national journalists at the end of the National People’s Congress on Wednesday would, at any time, have been nothing short of extraordinary. Here was China’s Prime Minister conjuring up the horrors of Chairman Mao’s Cultural Revolution, declaring the Arabs’ desire for democracy to be an undeniable force, challenging the Chinese to see the urgency of political reform and delivering a barely veiled attack on the “Red Princeling” Bo Xilai. Wen’s speech made it was plain to every person watching that, as far as he and his fellow modernizers were concerned, there is no going back; China is on the road to a future very different from its Maoist past.

Wen Jiabao described the Cultural Revolution as a “tragedy”—and one that, without urgent political reforms, “may happen again”

Wen’s rebuke was as dramatic as Chinese politics gets--and he is correct that China’s future hinges on the outcome of the battle within the Party itself. Live on national television (and therefore ruling out any subsequent gloss or watering down for public consumption), Wen chose—evidently, as it emerged the following day, in joint decision within the top leadership—to use his prime-time, once-a-year press conference to take direct aim at Bo Xilai, and signal his opposition to Bo’s promotion to the Politburo standing committee.

With a bluntness almost unheard of in China’s stiff official discourse, Wen used this most public of platforms to describe the Cultural Revolution as a “tragedy”—and one that, without urgent political reforms, “may happen again”. In contrast, Bo has made the idea of a “Red Culture” revival central to his philosophy.

Wen was vague about what political reform would look like in China—with only a year left of his decade in office, specifics were not the point. Wen’s purpose was to use all the considerable influence remaining to him to support the cause of liberal reform against the leftist wing of the party championed by Bo.

That, and to tell the nation: “Watch out: this man is dangerous.” Wen responded strongly in the broadcast to questions about the dramatic tale that has riveted China since the news broke last month—the flight to a US consulate and subsequent detention in Beijing of Wang Lijun, the flamboyant Chongqing police chief and famous crimebuster who was for years Bo’s strong right arm. Discussion of that drama has crackled in almost uncensored form across the Chinese blogosphere. Wen sternly intoned that the Chongqing Party Committee (headed by Bo) must reflect seriously on the “incident” and that the government was investigating the case with utmost gravity. He added: “an answer must be given to the people and the result of the investigation should be able to stand the test of law and history.”

What Wen did not add is that Beijing has in fact been investigating Chongqing for nearly a year now, long before Wang was suddenly purged by his boss and fled Chongqing in fear for his life. Beijing has accumulated evidence that Bo and Wang’s “strike black” campaign, officially against organised crime, has also served as cover for nabbing thousands of extremely rich businessman. Purportedly held in secret prisons and interrogated under torture, many were given long prison terms or executed. Many had their assets confiscated—a neat way, critics say, to finance Bo’s vaunted housing for the poor and leave enough over to pay for his son’s red Ferrari and to buy allegiance.

The “smash black” campaign also served as a way to smear the stigma of corruption on Wang Yang, the liberal Guangzhou party boss who is also in line for a Politburo standing committee slot, by allowing people to come to the conclusion that Wang must have allowed these businessmen to flourish when he held Bo’s Chonqing job. In his press conference,Wen pointedly praised Wang Yang’s tenure.

Professor Tong Zhiwei, who conducted Beijing’s investigation, is by far the leading Chinese authority on law, administration and constitution, posted at the prestigious Jiaotong University in Shanghai. His report, submitted to the leadership last autumn and also discussed by him on television, is damning. The primary goal of “strike black”, he concluded, was to “weaken and eliminate” private enterprise, “thereby strengthening state-owned enterprises or local government finances”. Its main impact, he wrote, was not on the Chongqing mafia, the ostensible target, but on the wealthy elite stripped of their money, their power and even their families--many of whom were also hauled off to detention. One of these millionaires, the businessman Li Jun who is now a penniless exile, has described in detail the torture he says he suffered under the “new red terror”, presided over by Bo and the police chief whom Bo so hurriedly demoted last month. Another mogul, Zhang Mingyu, who claims to possess incriminating tapes on the methods used against detainees, was seized by Chongqing police in Beijing last week.

If Bo had hoped to make Wang Lijung the fall guy as the net began to close around him, that move spectacularly backfired. Beijing may now decide to throw the book at Wang--and to publish the grisly facts about the alleged torture, extortion and other unlawful methods used in Chongqing, as premier Wen hinted in his promise to make public Beijing’s investigation of the Wang affair. Such revelations, if true, would destroy both Chongqing men. Bo may well be in line for worse punishment than merely losing his job. To break the grip of the left, Bo must be discredited. This struggle is more than a battle between two ambitious contenders for leadership roles. The sacking of Bo Xilai is a pre-emptive move to ensure that the liberal line prevails in China, not the statist model. By dramatically invoking the dark decade of the Cultural Revolution, Wen Jiabao has further put pressure on the hitherto reticent Xi Jinping, China’s heir presumptive, to line up, unequivocally and here and now, with the forces of modernisation.

http://www.thedailybeast.com/articles/2012/03/15/bo-xilai-s-sacking-signals-showdown-in-china-s-communist-party.html

 

[a_majoor]

We have seen the changes in the PLA and PLAN; now the Air Force's modernization plans come into focus:

http://www.aviationweek.com/aw/generic/story_generic.jsp?channel=awst&id=news/awst/2012/03/19/AW_03_19_2012_p61-431709.xml&headline=China%27s%20Air%20Force%20Modernizes%20On%20Dual%20Tracks

China's Air Force Modernizes On Dual Tracks

By Richard D. Fisher, Jr.
Washington

As China starts to put together a modern, integrated air force, which could reach 1,000 fighters by 2020, it is developing the components of a future force of stealthier combat aircraft, new bombers and unmanned, hypersonic and possibly space-based combat platforms. These could emerge as soon as the early 2020s.

This dual track was illustrated in late 2010 by two events. One was the People’s Liberation Army Air Force’s (Plaaf) first foreign demonstration of its modern capabilities: a combined-force mission of Xian Aircraft Co. H-6 bombers supported by Chengdu Aircraft Co. J-10 multi-role fighters, KJ-2000 airborne early warning and control aircraft. and H-6U tankers for an exercise in Kazakhstan. The other was the unveiling four months later of the Chengdu stealth fighter prototype, widely known as the J-20, followed in early 2011 by its first official flight.

The modernization drive relies on a comprehensive aerospace technology development program that started in the early 1990s. The first underlying doctrine was guided by “access denial” strategies that gelled in the late 1990s and focused on conflict over Taiwan. They were followed after 2005 by “New Historic Mission” strategies, propelling the PLA to dominate at greater distances and to build new, farther-reaching expeditionary capabilities.

To speed development of new weapons, the PLA has encouraged defense- sector competition since major logistics reforms in 1998, at the price of subsidizing greater redundancy. Though less prevalent in aerospace than in other defense fields, there is significant redundancy in combat aircraft, unmanned aircraft, electronics and weapons development and production.

Chengdu and the Shenyang Aircraft Co., China’s main fighter concerns, manage both stealthy and conventional fighter programs. China purchased 176 Sukhoi Su-27SK/UBK/Su-30MKK/MK2 twin-engine fighters, and co-produced over 100 more as the J-11 under license from Russia. In 2008, Shenyang started delivering the unlicensed J-11B with indigenous engines, radar and weapons, and today it is China’s most capable domestic production fighter. More than 120 J-11B and twin-seat J-11BSs serve in the air force, and are expected to be upgraded with better engines and an active, electronically scanned array (AESA) radar as they become available. A dedicated attack version of the J-11BS dubbed the “J-16” may also include these upgrades. Though it lost to Chengdu for the heavy stealth-fighter program, there is a persistent buzz that Shenyang is self-funding a medium-weight stealth warplane, perhaps called “J-60.”

Shenyang’s J-15, a near-facsimile of the Sukhoi Su-33 carrier-based fighter, is leading a new era of growth for the PLA navy’s air force. Having undergone land-based testing over the last year with the short-takeoff but arrested-recovery (Stobar) system to be used by China’s first aircraft carrier, the refurbished Russian Varyag, the J-15 could begin carrier-based testing later this year and when fully developed could prove as potent as the Boeing F/A-18E/F. An initial carrier air wing will include Changhe Z-8 airborne early warning and control helicopters with airborne early warning radar, and perhaps Russian Kamov Ka-32 anti-submarine and Ka-31 AEW helicopters.

A twin-turboprop E-2 class airborne early warning/antisubmarine warfare (AEW/ASW) aircraft is under development, perhaps for conventional-takeoff-and-landing (CTOL) on two nuclear carriers that may follow two more non-nuclear Stobar carriers. In November 2011, images emerged of a long-awaited ASW version of the Shaanxi Y-8 “New High” medium transport, which will finally give the navy an oceanic ASW and maritime surveillance platform.

Since 2003, more than 200 of Chengdu’s “low end” canard-configuration single-engine J-10A and twin-seat J-10S fighters have entered service—forming the low end of a high-low mix with the larger J-11B. Production may soon switch to the upgraded J-10B equipped with an AESA radar, infrared search and track sensor, radar cross-section reduction measures and improved electronic warfare system. One J-10B prototype has been tested with a version of the Shenyang-Liming WS-10A turbofan. This fighter may be the basis for the “FC-20” version expected to be purchased by Pakistan.

Just before the service’s 60th anniversary in October 2009, a Chinese air force general stated that their next-generation fighter would enter service between 2017 and 2019, though a late- 2010 report of PLA interest in purchasing the Russian AL-41 turbofan for this fighter might accelerate that timeline. Since its emergence on the Internet in late 2010, Chengdu’s stealthy twin-engine canard J-20 has been photographed and videoed extensively undergoing testing at Chengdu. Expected to be fitted with 15-ton-class thrust-vectored turbofans in its production form, this aircraft is expected to be capable of supercruise and extreme post-stall maneuvering, and will be equipped with an AESA radar and distributed infrared warning sensors.

In 2005 a Chinese official said that an “F-35”-class program was being considered by Chengdu. China also has long been interested in short-takeoff-and-vertical-landing (Stovl) fighters, and long-standing Russian and Chinese reports point to a possible Chengdu program based on technology from the Yakovlev Yak-141, a supersonic Stovl prototype tested in the late 1980s.

A potential development of medium-weight stealth fighters by 2020 would cap an expected decade of more intensive export offerings. While the export effort is led by Chengdu’s FC-1/JF‑17 cooperative program with Pakistan (which could acquire up to 300 fighters) and the fighter could yet be purchased by the air force, greater international appeal may follow its being equipped with a Chinese engine—a likely near-term prospect.

But China is already laying the foundation for sales of the FC-1, and perhaps the J-10B and J-11B, by aggressively marketing low-cost trainers like the Hongdu K-8 and the supersonic L-15, with generous financing credits and production technology transfers. This “food chain” strategy has worked in Pakistan, and could be repeated in Egypt and as far away as Latin America. Venezuela and Bolivia are customers for light attack versions of the K-8 and Venezuelan officials reportedly visited the Chengdu factory in late 2011.

The Chinese air force and navy have taken delivery of about 170 of the twin-engine Xian JH-7/JH-7A strike fighters, with indications that Xian may be developing a reduced-signature variant. Approaching the longevity and mission evolution of the Boeing B-52, Xian’s latest version H-6K bomber entered low-rate production in 2010, equipped with more powerful and efficient Progress D-30KP turbofans and a redesigned nose with modern radar and optics. The bomber is armed with more than six land-attack cruise missiles. Little is known about Xian’s follow-on bomber program, except that it could emerge this decade. In late 2009 an “official” model of a large, stealthy delta-wing bomber was revealed, though its provenance is unknown. In early 2010 Chinese academics from the prestigious Institute of Mechanics, a leading hypersonics research center, produced a paper on an apparent large aircraft with a Mach 3 cruise speed, with illustrations and wind tunnel models indicating it could be an optionally manned platform.

This year or next, Xian is expected to unveil a new 50-60-ton payload Y-20 four-engine strategic transport. While the Comac C919 twin-turbofan regional airliner is an established, well-known program, Chinese officials are far more reticent about a Boeing 767-sized widebody four-turbofan airliner program at Xian. Though its business case may be unclear, this platform could serve multiple military missions.

To power its aerospace transformation, China has purchased about 1,000 Russian Saturn AL-31 turbofans for its Su-27/J-11 and J-10A fleets, which are receiving Chinese-developed service-life extensions. But after 25 years of intensive investments, new Chinese fighter and large high-bypass turbofan engines are emerging. In 2008 the Shenyang-Liming WS-10A was good enough to enter service with the J-11B, perhaps slightly below thrust goals at 12.7 tons, but it now powers the J-11BS and prototypes of the J-15 and J-10B. Shenyang-Liming may also be working toward a 15-ton variant of this engine. The Gas Turbine Research Institute has put a new 8-9.5-ton-thrust turbofan on one FC-1 and has advanced the development of a 15-ton engine for J-20. Shenyang-Liming, Xian and the Avic Commercial Aircraft Engine Co. have 13+-ton-thrust high-bypass turbofan engine programs to power military and commercial transports, and perhaps a new bomber.

Prototypes of the J-10B use China’s first fighter-sized AESA radar by the Nanjing Research Institute of Engineering Technology (NRIET) and future versions of the J-11 and J-15 fighters are expected to have AESA. NRIET’s mechanically scanned array radar on the J-10A and FC-1 can manage two simultaneous air-to-air missile (AAM) engagements at over 100 km (62 mi.). The Luoyang PL-12 actively guided AAM may have a range of 100 km, while the helmet-sighted PL-8 and PL-9 short-range AAMs may be replaced with a helmet-display sighted PL-10. Two companies produce families of satellite and laser-guided munitions, down to 50-kg (110-lb.) weapons for unmanned combat air vehicles.

China has developed a plethora of AEW platforms. The Plaaf itself uses the “high end” KJ-2000, based on the Beriev A-50, and the smaller KJ-2000 based on the Xian Y-8 turboprop transport, with a “balance beam” AESA antenna like that of the Saab Erieye. China has also exported the Y-8-based ZDK-03 with a “saucer” radar array to Pakistan. These will be joined soon by the Chengdu/Guizhou Soar Dragon box-wing strategic UAV.

Leadership for space warfare is being sought by the air force, and its leaders clearly enunciated new strategies calling for space warfare capabilities in late 2009. But today China’s manned and unmanned space program is controlled by the General Armaments Department of the Central Military Commission. The air force’s case, however, could be advanced by Chengdu’s small Shenlong spaceplane—which may have undertaken initial sub-orbital tests by late 2010—and could be developed into an X-37B-like craft. In 2006, engineers from the China Academy of Space Launch Technology outlined plans to build a 100-ton+ space shuttle-like spaceplane, perhaps by 2020, or a more efficient sub-orbital hypersonic vehicle that would launch attached payloads. “Flying” platforms could fall under air force control, while “dual use” missions of PLA-controlled satellites and manned space platforms could remain under GAD control.

But a clash could also occur over the future ballistic missile defense mission, which Asian military sources suggest could be realized by the mid-2020s. The successful warhead interception of January 2010 was likely a GAD program, but the air force’s expected development of very-long-range anti-aircraft missiles with anti-ballistic missile capabilities might also justify its potential claim on mission leadership.

 

[tomahawk6]

There are unconfirmed reports of a coup in China. Probably just a drill,but who knows for sure.

http://m.theepochtimes.com/n2/china-news/coup-in-beijing-says-chinese-internet-rumor-mill-207993.html

 

[Edward Campbell]

Here is an interesting report about Hong Kong's problems with China:

http://www.theglobeandmail.com/report-on-business/video/video-bitter-political-rivalry-in-hong-kong/article2376264/
From Reuters via the Globe and Mail


Essentially, a lot of Hong Kong people think they are getting less than a fair shake from Beijing. Beijing is not unalterably opposed to some form of representative democracy but it wants to start slowly and from the village level, only getting to big cities and provinces after a generation or two; Hong Kong wants more representative democracy now. How Beijing manages Hong Kong's ambitions will be watched very carefully in Taipei.



Edit: format

 

[Edward Campbell]

And more of China's economic dilemma, reproduced under the Fair Dealing provisions of the Copyright Act from the Financial Times, reprinted in the Globe and Mail:

http://www.theglobeandmail.com/report-on-business/international-news/global-exchange/financial-times/how-to-blow-away-chinas-gathering-storm-clouds/article2376240/singlepage/#articlecontent

How to blow away China’s gathering storm clouds

MARTIN WOLF

Financial Times
Posted on Wednesday, March 21, 2012

China is entering upon a difficult transition to both lower growth and a different pattern of growth. This is the conclusion I drew from this year’s China Development Forum in Beijing. Moreover, it is likely to be a political as well as an economic transition. These two transitions will also interact with one another in complex ways. The past record of economic success, under Communist party rule, does not guarantee a comparably successful future.


Readers do not need to take my word. They can take those of the outgoing premier, Wen Jiabao, who said on March 14: “The reform in China has come to a critical stage. Without the success of political structural reform, it is impossible for us to fully institute economic structural reform. The gains we have made in reform and development may be lost, new problems that have cropped up in China’s society cannot be fundamentally resolved and such historical tragedy as the Cultural Revolution may happen again.”

These political questions are of great importance. But the economic transition, in itself, will be hard enough. China is coming to the end of what economists call “extensive growth” - driven by rising inputs of labour and capital. It must now move to “intensive growth” - driven by improving skills and technology. Among other consequences, China’s rate of growth will slow sharply from its average annual rate of close to 10 per cent of the past three decades. Making this transition harder is the nature of China’s extensive growth, particularly the extraordinary rate of investment and heavy reliance on investment as a source of demand.

China is ceasing to be a labour surplus country, in terms of the development model of the late West Indian Nobel laureate, Sir Arthur Lewis. Lewis argued that the subsistence income of surplus labour in agriculture set a low ceiling for wages in the modern sector. This made the latter extremely profitable. Provided the high profits were reinvested, as in China, the rate of growth of the modern sector and so of the economy would be very high. But, at some point, labour would become scarcer in agriculture, so raising the price of labour to the modern sector. Profits would be squeezed and savings and investment would fall as the economy matured.

The China of 35 years ago was a surplus labour economy. Today that is true no longer, partly because growth and urbanization have been so rapid: since the beginning of reform the Chinese economy has grown more than 20-fold, in real terms, and half of China’s population is now urban. In addition, China’s low birth rate means that the working age population (15-64) will reach a peak of 996 million in 2015. A paper by Cai Fang of the Chinese Academy of Social Sciences states that “labour shortage has become rampant throughout the country since it broke out in coastal areas in 2004. In 2011, manufacturing enterprises came across unprecedented and universal difficulties in recruiting labour”. Mr Fang’s paper gives compelling evidence of the consequent rise in real wages and shrinking profits.

China is now at the Lewis turning point. One consequence is that, at a given investment rate, the ratio of capital to labour will rise faster and returns also fall faster. Indeed, strong evidence of such rising capital intensity emerged even before the Lewis turning point. According to Louis Kuijs, a former World Bank economist, the contribution to higher labour productivity of the rising ratio of capital to labour (as opposed to the contribution of a higher “total factor productivity” (TFP), or overall productivity) rose from 45 per cent between 1978 and 1994 to 64 per cent between 1995 and 2009.

This has to change. China’s growth must be driven by rising TFP, which will sustain profits, rather than rising ratios of capital to labour, which will lead to declining profits, particularly now that real wages are rising fast. Some decline in profits is desirable, given the maldistribution of income. Taken too far, it would damage potential growth.

The difficulty of making the transition to growth driven by technical progress is one reason why so many countries have fallen into what has come to be called the “middle-income trap”. China, now a middle-income country, is determined to become a high-income country by 2030. That will take deep reforms, which are laid out in a remarkable recent joint report by the World Bank and the Development Research Center of the State Council. Those reforms will adversely affect vested interests, particularly in local government and state-owned enterprises. That is surely a big reason why Mr. Wen thinks political reforms matter.

The need to make difficult reforms, to sustain growth in the next two decades, is China’s longer-term challenge. In trying to get there, it confronts the short-term risks of a hard landing, as Nouriel Roubini of the Stern School of Business at New York University pointed out at the conference. China’s government is targeting annual growth of 7.5 per cent this year and of 7 per cent in the current five-year plan period. Some such slowdown seems inevitable. As growth slows, the need for extraordinary investment rates will also decline.

Yet getting from an investment rate of 50 per cent of gross domestic product to one of 35 per cent, without a deep recession on the way, requires an offsetting surge in consumption. China has no easy way to engineer such a surge, which is why its response to the crisis has been still higher investment. In addition, China has come to rely heavily on investment in property construction: over the past 13 years investment in housing has grown at an average annual rate of 26 per cent. Such growth will not continue.

China may indeed manage the transition to a very different kind of economic growth. The country still has vast potential to catch up. But the challenges of adjusting to the new pattern will be huge. Plenty of middle-income countries have failed. It is difficult to argue against China, given past successes. The best reason for confidence is that top policy makers lack such complacency.

I agree with Martin Wolf; despite the complexities of the problems facing China I, too, am confident that the leadership can manage the transitions to a more properly productive economy and to a more responsible political and bureaucratic system.

 

[Edward Campbell]

There are unconfirmed reports of a coup in China. Probably just a drill,but who knows for sure.

http://m.theepochtimes.com/n2/china-news/coup-in-beijing-says-chinese-internet-rumor-mill-207993.html

A report, reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail, on why we don't get immediate, accurate reports about the Chinese leadership:

http://www.theglobeandmail.com/news/world/worldview/why-the-coup-rumours-in-china-arent-going-away/article2376711/

Why the coup rumours in China aren’t going away

MARK MACKINNON

Beijing— Globe and Mail Update
Posted on Wednesday, March 21, 2012

One of the truths of reporting on China is that few journalists, maybe none, can honestly claim to know what’s going on inside the upper echelons of power.

In other countries, you might see reporters offhandedly refer to their unnamed contacts inside the Prime Minister’s Office, or the White House, or whatever institution they’re covering. Even when I worked in famously enigmatic Russia, I had a few “Kremlin sources” I could occasionally turn to.

Not in China. I know many of the foreign journalists based here, and more than a few of the Chinese ones. None have ever claimed to me, or their readers, that they have a contact inside, or even close to, the decision-making Standing Committee of the Politburo of the Communist Party of China.

Which, often, is to the credit of those who run this country. This is not a place where trial balloons get floated by cabinet ministers trying to build public support and win funding for their pet project, nor are China’s leaders crippled by the constant and public infighting that brought down Canada’s Liberal Party or Britain’s Labour, to name two prominent examples.

But the wall of secrecy that Communist Party leadership has built around itself also prevents the development of trust between the government, media and public. It leaves the media with no one to talk to and get real information from when there’s a wild rumour floating about, like the continuing – and so far unfounded – talk that some kind of coup d’état was attempted Monday night in Beijing. And it leaves the public unsure of what to believe in such situations.

The coup rumour began with Chinese bloggers noting some unusual security around the Zhongnanhai leadership compound in the centre of Beijing on Monday night. The speculation grew more excited when some residents reported hearing gunshots in the area.

The whispers gained a wider audience a day later when websites like the Falun Gong-linked Epoch Times (“Coup in Beijing says Chinese Internet rumour mill”) and the Taiwan-based Want China Times (“Shots Fired in Beijing – but what kind?”) quoted unnamed “sources” suggesting a coup attempt had been launched against the government of President Hu Jintao and Premier Wen Jiabao.

The mutiny was supposedly led by a leftist faction inside the Politburo headed by Zhou Yongkang, the chief of China’s massive internal security apparatus, and the recently ousted leadership contender Bo Xilai.

In another country, reporters would have been on the phone to people in the offices of Mr. Hu, Mr. Wen, Mr. Zhou and Mr. Bo, in all likelihood getting a quick denial that there was anything like a coup happening.

(I should add here that if there is a serious conflict inside Zhongnanhai, it seems odd that security in the rest of Beijing remains normal, without even the extra police presence regularly seen during national holidays and major political events. Chinese official media have said there was a meeting between senior government leaders and a North Korean delegation at Zhongnanhai on Monday night, something that could explain the extra security, if not the reported gunshots.)

But no one has the rock-solid contacts who can irrefutably confirm or deny such a sensitive tale, especially not now, with the Chinese political scene in uncommon turmoil following the dramatic firing of Mr. Bo last week.

So the rumour has continued to snowball all week, to the point where some believe it had an effect on the foreign exchange markets. The esteemed Financial Times finally felt compelled to report on Thursday that “the Chinese capital is awash with speculation, innuendo and rumours of a coup.”

And now I’m passing on the scuttlebutt too. Why? Because no one in Zhongnanhai is taking my calls. They’re not taking anyone’s calls – which leaves the outside world in the dark at a crucial moment in Chinese history (by which I mean the once-in-a-decade leadership transition that begins this fall, not the rumoured coup effort).

Try it: Google “according to a source inside the Prime Minister’s Office” and you get 85,600 results.

Searching “according to a White House source” gets you 131,000. “According to an al-Qaeda source” brings 19,900.

But “according to a source in the Chinese Politburo”? None. When this story gets posted online, it will go right to the top of the charts as the first use of that phrase in all of Googledom.

Maybe that distinction will convince someone in Zhongnanhai to ring me up – an off-the-record conversation is fine – to let me know what all the fuss was about on Monday night.

Things are different in China - if there was a coup in almost any country we would expect to see the new "leaders" on the palace balcony, saluting the happy throngs with raised fists, etc ... in China those who have real power do not believe that the people, all 1.5 billion of them, have any particular right or even need to know who rules them and they certainly don't give a damn what the media, domestic or foreign might think.

 

[a_majoor]

The Chinese government is intervening in the housing market in a large way. This attempt to gradually deflate the housing bubble is well intentioned, but markets have a way of reacting in unanticipated ways (the popping of the US housing bubble and current attempts to keep the US housing market "inflated" should be fair warning to the dangers of market intervention):

http://www.businessweek.com/printer/articles/19680?type=bloomberg

China Home Prices Fall in 70 Cities Tracked
By Bloomberg News on March 17, 2012

China’s February home prices fell in more than half of the 70 cities monitored by the government with only three cities recording gains as the country maintained curbs on the property market.

Prices fell in 45 cities last month as compared with January, while 22 cities were unchanged, the National Statistics Bureau said in a statement on its website today. That compares with 47 cities recording a decline in January. New home prices in the cities of Shanghai, Beijing, Shenzhen and Guangzhou dropped for a fifth month.

Premier Wen Jiabao said last week China’s home prices remain far from a reasonable level and called on the government not to slacken efforts to regulate the housing sector. Relaxing the curbs could cause “chaos” in the market, Wen said. China’s two-year campaign to rein in home prices has included measures such as higher down payments and mortgage rates, and home purchase restrictions in 40 cities.

“With more supply coming in spring, prices will fall further,” said Lan Shen, a Shanghai-based economist at Standard Chartered Plc. “There will not be a total reversal of the government’s tightening policies this year and any sort of policy fine-tuning will have a limited impact of the market.”

Only the northern city of Baotou, the eastern city of Jinan and northwestern city of Xining posted gains of 0.1 percent in home prices. In January, no city posted gains for the first time since the government began releasing data at the start of 2011 for 70 cities instead of a national average.

Beijing, Shanghai Prices
Among major cities, February new home prices in Beijing fell 0.1 percent from January, while prices dropped by 0.2 percent in Shanghai. The southern business hubs of Guangzhou and Shenzhen both declined by 0.2 percent.

The eastern city of Wenzhou posted the biggest drop for the fourth month, with home prices declining by 0.5 percent from January and 8 percent from last year, according to the statistics bureau. A credit squeeze on smaller businesses in the city prompted Premier Wen to visit in October and pledge financial aid.

Today’s figures came after private data also showed the home market continued to cool. China’s February home prices posted the biggest decline in 19 months, according to SouFun Holdings Ltd. (SFUN), the nation’s biggest real estate website owner.

New home prices fell in 27 out of 70 cities in February from a year earlier, the government data showed today.

China Vanke Co. (000002), the country’s largest publicly traded developer, said contracted sales in the first two months fell 27 percent from a year earlier, while they slumped 31 percent at Poly Real Estate Co. (6000048), the second-biggest developer traded on Chinese exchanges.

Existing Homes
Existing home prices in Beijing and Shanghai both dropped 0.2 percent from January, according to the statistics bureau.

“The current administration will not relax the overall tightening stance on the housing market,” wrote Barclays Capital Asia Ltd. economists led by Jian Chang in a note to clients on March 14. “We expect a further decline in property prices, especially in major and coastal cities.”

The country’s home sales declined 25 percent in January and February, according to data from the statistics bureau on March 16. The value of homes sold fell 25 percent after surging 26 percent in the first two months of 2011.

Home prices may post a “single-digit” decline this year, billionaire developer Vincent Lo, chairman of Shui On Land Ltd. (272), said in an interview in Beijing on March 8. Home prices will not see a crash, he said.

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

 

[a_majoor]

Hmmmm:

http://blog.foreignpolicy.com/posts/2012/03/21/chinese_coup_watching

Chinese coup watching
Posted By Isaac Stone Fish Wednesday, March 21, 2012 - 4:16 PM Share

Last week, controversial politician Bo Xilai, whose relatively open campaigning for a seat on China's top ruling council shocked China watchers (and possibly his elite peers, as well), was removed from his post as Chongqing's party secretary. He hasn't been seen since. Rumors of a coup, possibly coordinated by Bo's apparent ally Zhou Yongkang, are in the air.

Western media has extensively covered the political turmoil: Bloomberg reported on how coup rumors helped spark a jump in credit-default swaps for Chinese government bonds; the Wall Street Journal opinion page called Chinese leadership transitions an "invitation, sooner or later, for tanks in the streets." The Financial Times saw the removal of Bo, combined with Premier Wen Jiabao's strident remarks at a press conference hours before Bo's removal as a sign the party was moving to liberalize its stance on the Tiananmen square protests of 1989. That Bo staged a coup is extremely unlikely, but until more information comes to light, we can only speculate on what happened.

Reading official Chinese media response about Bo makes it easy to forget how much Chinese care about politics. The one sentence mention in Xinhua, China's official news agency, merely says that Bo is gone and another official, Zhang Dejiang, is replacing him.  But the Chinese-language Internet is aflame with debate over what happened to Bo and what it means for Chinese political stability.

Mainland media sites have begun to strongly censor discussion of Bo Xilai and entirely unsubstantiated rumors of gunfire in downtown Beijing (an extremely rare occurance in Beijing). Chinese websites hosted overseas, free from censorship, offer a host of unsupported, un-provable commentary on what might have happened in the halls of power. Bannedbook.org, which provides free downloads of "illegal" Chinese books, posted a long explanation of tremors in the palace of Zhongnanhai, sourced to a "person with access to high level information in Beijing," of a power struggle between President Hu Jintao, who controls the military, and Zhou, who controls China's formidable domestic security apparatus. The Epoch Times, a news site affiliated with the Falun Gong spiritual movement (which banned in China), has published extensively in English and Chinese about the coup.

Speculation is rife: A Canadian Chinese news portal quoted Deutsche Welle quoting the Hong Kong newspaper Apple Daily quoting a netizen that a group of citizens unfurled a banner in a main square in Chongqing that said "Party Secretary Bo, We Love and Esteem You," and were subsequently taken away by plain-clothes security forces. A controversial Peking University professor Kong Qingdong, a 73rd generation descendant of Confucius, said on his television show that removing Bo Xilai is similar to  "a counter-revolutionary coup;" one news site reported his show has since been suspended.

The Wall Street Journal reports that searching for Bo Xilai's name on Baidu, China's most popular search engine, lacks the standard censorship boilerplate ("according to relevant rules and regulations, a portion of the search results cannot be revealed") that accompanies searching for top leaders like Wen Jiabao and Hu Jintao. A recent search for other Politburo members like Bo rival Wang Yang and People's Liberation Army top general Xu Caihou were similarly uncensored. Conversely, searching for Bo's name on Sina's popular Weibo micro-blogging service now doesn't return any relevant results. A censored fatal Ferrari crash on Sunday  night has raised suspicions of elite foul play, possibly realted to Bo. The bannedbook.org reports that Hu and Zhou "are currently fighting for control of China Central Television, Xinhua News (the official Communist Party wire service), and other ‘mouthpieces,'" which have been eerily but unsurprisingly taciturn about Bo Xilai. 

What we do know, as one message that bounced around Sina Weibo said, is that "something big happened in Beijing."

All that we can say for certain is that "something is happening".

 

[a_majoor]

More in the real of Kremlinology. So long as the numbers are not adding up (this graph shows a huge drop in energy demand in China), we need to take other information about economic growth and the health of the Chinese economy with a certain degree of scepticism. How can China's economy grow at 7% if energy demand (or shipping demand, another metric discussed upthead) is actually declining? IF this is the Chinese government trying to keep their "bubble" inflated, there will be an even bigger crash than the one we saw in 2008. Stay tuned:

http://www.zerohedge.com/news/no-it-not-just-chinese-new-year

No, It Is Not Just The Chinese New Year
Submitted by Tyler Durden on 03/29/2012 19:33 -0400

The one indicator which the Chinese Politburo can not fudge: power production and hence: demand, speaks volumes about the true state of China's economy.

 

[a_majoor]

Chinese companies carrying on in this fashion will quickly gain a reputation of being scam artists and be unwelcome wherever they go. The ability to get contracts and bid on foreign work is a valuable addition to your foreign trade, so fouling the nest like this is stupid policy all around:

http://opinion.financialpost.com/category/diane-francis/

China must improve its construction record
Diane Francis  Mar 31, 2012 – 7:00 AM ET | Last Updated: Mar 30, 2012 2:54 PM ET

Chinese companies should be banned from construction work in Canada because of their questionable track record here and around the world.

It was shocking that Enbridge Inc.’s Pat Daniel said his company was willing to allow a Chinese company to buy a stake in and to bid for the construction of the proposed Northern Gateway oil sands pipeline.

Not only should Chinese companies be banned from construction or bidding but Investment Canada should ban them from buying resource companies or related assets.

China’s strategy is to buy resources around the world, then low-ball to get construction contracts by using Chinese laborers and materials. This is not only damaging to the domestic economy, and unnecessary, but in some cases laws and obligations have been flouted.

Just for the record, my husband heads Canada’s largest infrastructure and construction public company in Canada.

In 2007, Sinopec Shanghai Engineering Company brought in 132 Chinese workers to an Alberta oil sands site to assemble their storage tanks and do other work. Two workers were killed and several injured. The remaining Chinese workforce was moved out of Alberta and work stopped.

The Alberta government charged Sinopec, its subsidiary and their oil sands client with 53 safety charges. Sinopec and its branch plant have refused to appear in court. They say they have not been served papers because they are in China where they cannot be served papers to appear in court. Instead of acceding to Canadian law, they have not appeared.

In November, an Alberta Court of Appeal ruled the company must stand trial on these serious charges. In February, Sinopec said it wants the Supreme Court of Canada to overturn this ruling because it should be exempt.

The 132 Chinese workers were not paid an estimated $3.17 million by their Chinese employer even though they worked four months before the accident. Alberta employment standards spokesman Barrie Harrison said that the prime contractor, the Canadian oil sands project client, put the $3.17 million in wages and benefits in trust even though it had no obligation to do so.

In an interview last year, Harrison said: “We are still trying to determine the best, most secure method of returning these funds to the workers, who are now either back in China or working at other sites around the world. We’ve had nothing new to report on this file for quite some time.”

The Canadian embassy in Beijing has been involved in trying to right this wrong, at taxpayer expense.

This outrageous behavior by China and its companies should be reason enough to ban Chinese companies from bidding on construction work or having workforces in Canada. After all, a major corporation has no respect for the rule of law here; has damaged Chinese workers; damaged its Canadian client; cost the taxpayers of Alberta a great deal of money to try and clean up the mess and prosecute wrongdoing and has cost the taxpayers of Canada, Canada’s immigration department and Canada’s justice system as well.

This behavior is not unique to Canada.

Shoddy work and broken promises have occurred elsewhere. In Angola, in July 2010, more than 150 patients had to be evacuated from a new Chinese-built hospital in Luanda, after its walls began cracking and bricks began disintegrating. China Overseas Engineering Group Co. (COVEC) built the hospital for $8 million. Reports began to come out in the local media that many roads, schools, hospitals and other infrastructure completed by the Chinese were sub-standard or unsafe and promises to employ Angolans were not kept.

Another example was reported in 2010. The Chinese were finally able to penetrate the European Union when COVEC won a bid to build a major highway in Poland by bidding less than half the price of domestic contractors. This caused consternation across the EU because of Chinese tactics around the world. The pattern is well worn: Chinese firms low ball to beat out local competition then bring in substandard materials and workers from China.

The Poles were committed to tender bidding for the contracts, and were stuck with accepting COVEC’s basement bid but were wise to the tactics. So they stipulated that the company could not import Chinese materials, supplies or labour.

But COVEC reportedly flouted this requirement and started to bring in Chinese workers anyway, claiming that Polish workers were not cooperative and would not take pay cuts.

Then they began sourcing supplies from China, claiming Polish suppliers refused to match Chinese prices.

In June 2011, COVEC stopped work. Poland sued COVEC for $271 million in damages for breach of contract. And the country has had to spend huge amounts to complete the highway in time for the 2012 European Football Championships in Poland this summer. COVEC told China Daily it was asking for compensation.

For these reasons and more, Canada must ban any bidding or work permits to Chinese workforces. They simply are not acceptable. They are also not the only buyers for oil sands production. A pipeline can deliver oil to the west coast and then to Asian and South American markets by sea.

 

[a_majoor]

A report on weapons development in China. This is what the PLA and PLAN are working on today: http://www.uscc.gov/researchpapers/2012/China-Indigenous-Military-Developments-Final-Draft-03-April2012.pdf

 

[Ignatius J. Reilly]

As much as the carrot has been offered, the stick is still augmenting.
For folks such as me &  mine on Taiwan.

We all well know we are a Rock unto both the forces of the U.S.A. and of  Nippon.
We just had our Patriots upgraded, but by far the most worrying is the doubling of range of many of the recent upgrades in observable PLA missile launch sites.


Good article here:

NO MATTER how often China has emphasised the idea of a peaceful rise, the pace and nature of its military modernisation inevitably cause alarm. As America and the big European powers reduce their defence spending, China looks likely to maintain the past decade’s increases of about 12% a year. Even though its defence budget is less than a quarter the size of America’s today, China’s generals are ambitious. The country is on course to become the world’s largest military spender in just 20 years or so (see article).

Much of its effort is aimed at deterring America from intervening in a future crisis over Taiwan. China is investing heavily in “asymmetric capabilities” designed to blunt America’s once-overwhelming capacity to project power in the region. This “anti-access/area denial” approach includes thousands of accurate land-based ballistic and cruise missiles, modern jets with anti-ship missiles, a fleet of submarines (both conventionally and nuclear-powered), long-range radars and surveillance satellites, and cyber and space weapons intended to “blind” American forces. Most talked about is a new ballistic missile said to be able to put a manoeuvrable warhead onto the deck of an aircraft-carrier 2,700km (1,700 miles) out at sea.
http://www.economist.com/node/21552212

 

[a_majoor]

The axe falls on Bo Xilai and his wife. The ultimate fallout is hard to gauge, how many supporters did Bo Xilai have and how well are they positioned? While a coup may be unlikely, a vicious behind the scenes power struggle is not:

http://latimesblogs.latimes.com/world_now/2012/04/bo-china-party-posts-murder.html

Ex-Chongqing leader Bo stripped of party posts, wife detained
April 10, 2012 | 10:01am

Bo Xilai, the charismatic former Communist Party chief in the Chinese city of Chongqing, has been stripped of his remaining leadership roles for "violations of party discipline" and his wife has been detained on suspicion of murdering a British businessman, state-run media reported Tuesday.

Bo's ouster last month as party secretary for Chongqing unleashed one of the most high-profile political shakeups in China since the crushing of pro-democracy demonstrations at Tiananmen Square in 1989.

China's CCTV reported that Bo has been suspended from his posts on the party Central Committee and the 25-member Politburo and that his case has been handed over to a disciplinary inspection commission for investigation.

In a separate dispatch from the official New China News Agency, it was announced that Bo's wife, Gu Kailai, has been "highly suspected" in the Nov. 15 death of British businessman Neil Heywood.

The news agency reported that Bo's wife and their housekeeper, Zhang Xiaojun, had been taken into  custody after a reinvestigation of Heywood's death led authorities to suspect them of "intentional homicide." The report gave no further details of the case or how investigators came to suspect Bo's wife.

Bo, the son of Communist Party founder Bo Yibo, had been considered a contender for the top leadership in China for his revolutionary zeal and inspirational powers in his populous southwest municipality. He was sacked as Chongqing party leader on March 15. The move was seen as censure after a longtime ally and former police chief, Wang Lijun, sought temporary refuge at a U.S. consulate in February.

 

[Edward Campbell]

Bo had the same sort of constituency that Putin cultivates: people who are not faring as well as they hoped in the new China and who crave a return to Mao, with all that implies, just as many Russians 'miss' Stalin, or what they thought Stalin brought to Russia.

But Bo crossed Hu Jintao and the centre ... and he did so from a position of weakness. Hu is about as far "left" as the Chinese are prepared to go, Bo was way "out there," too far beyond the consensus limits.

 

[GAP]

Wow.....China's getting greedy.....

Philippines 'withdraws warship' amid China stand-off
Article Link
12 April 2012

The Philippines says it has withdrawn its largest warship from a continuing stand-off with Chinese boats in the disputed South China Sea.

Earlier on Thursday a Philippine coastguard vessel arrived in the area, known as the Scarborough Shoal.

The Philippines also says China has sent a third ship to the scene.

The Philippine foreign minister said negotiations with China would continue. Both claim the shoal off the Philippines' north-west coast.

The Philippines said its warship found eight Chinese fishing vessels at the shoal when it was patrolling the area on Sunday.

It did not say why the warship had been pulled back. "That is an operational undertaking I can't discuss with you," Foreign Affairs Secretary Albert del Rosario was quoted by AFP news agency as saying.

"We are pursuing the diplomatic track in terms of coming to a resolution on the issue," Mr Del Rosario said.
Differing views

In a statement, the Philippines said that its navy boarded the Chinese fishing vessels on Tuesday and found a large amount of illegally-caught fish and coral.

Two Chinese surveillance ships then apparently arrived in the area, placing themselves between the warship and the fishing vessels, preventing the navy from making arrests.

The Philippines summoned Chinese ambassador Ma Keqing on Wednesday to lodge a protest over the incident. However, China maintained it had sovereign rights over the area and asked that the Philippine warship leave the waters.

China's state-run newspaper China Daily claimed in an editorial that the Chinese fishermen were "harassed" by the Philippine ship.

"China should take more measures to safeguard its maritime territory," the newspaper stated.

"The latest moves by China's two neighbours are beyond tolerance," it added, also referring to Vietnam. "They are blatant challenges to China's territorial integrity."

However, the Global Times newspaper added that China "has the patience to work out solutions with the countries concerned through negotiation".

The stand-off comes as the Philippines prepares for joint naval exercises with the United States from the 16 to 27 April near the disputed area.
More on link

 

[Kalatzi]

Rotting From Within

Investigating the massive corruption of the Chinese military.

An article from FP  - Foreign Policy - exerpt reproduced under dealing provision of the copyright act


full link here
http://www.foreignpolicy.com/articles/2012/04/16/rotting_from_within?page=0,0


"True, the world underestimated how quickly a four-fold jump in Chinese military spending in the past decade would deliver an array of new weaponry to prevent the United States from interfering in a regional military conflict. Top American generals have worried publicly about "carrier-killer" ballistic missiles designed to destroy U.S. battle groups as far afield as the Philippines, Japan, and beyond. Last year, China tested a prototype stealth fighter and launched its maiden aircraft carrier, to augment new destroyers and nuclear submarines. What is unknown, however, is whether the Chinese military, an intensely secretive organisation only nominally accountable to civilian leaders, can develop the human software to effectively operate and integrate its new hardware.

Judging from a recent series of scathing speeches by one of the PLA's top generals, details of which were obtained by Foreign Policy, it can't: The institution is riddled with corruption and professional decay, compromised by ties of patronage, and asphyxiated by the ever-greater effort required to impose political control. The speeches, one in late December and the other in mid-February, were given by Gen. Liu Yuan, the son of a former president of China and one of the PLA's rising stars; the speeches and Liu's actions suggest that the PLA might be the site of the next major struggle for control of the Communist Party, of the type that recently brought down former Chongqing party boss Bo Xilai. Liu is the political commissar and the most powerful official of the PLA's General Logistics Department, which handles enormous contracts in land, housing, food, finance, and services for China's 2.3 million-strong military.

"No country can defeat China," Liu told about 600 officers in his department in unscripted comments to an enlarged party meeting on the afternoon of Dec. 29, according to sources who have verified notes of his speech. "Only our own corruption can destroy us and cause our armed forces to be defeated without fighting." This searing indictment of the state of China's armed forces, coming from an acting full three-star general inside the PLA, has no known modern precedent."

Another example of the challenges they face.

 

[Edward Campbell]

Here, reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail is an interesting article about the political divisions within the CCP:

http://www.theglobeandmail.com/news/world/bo-xilais-fall-signals-victory-for-chinas-reformers/article2409711/singlepage/#articlecontent

Bo Xilai’s fall signals victory for China’s reformers

MARK MACKINNON

BEIJING— From Saturday's Globe and Mail
Published Friday, Apr. 20, 2012

The fall of Bo Xilai, once the rising star of China’s Communist Party, has been spectacular to watch. Initially purged last month because his superiors feared he might launch a “new Cultural Revolution,” the ouster was shocking enough to spark rumours that Mr. Bo and his allies were planning to seize power in Beijing via a coup d’état.

Then came stories of a British businessman, a fixer for Mr. Bo’s family, turning up dead in a hotel room in Chongqing, the Yangtze River metropolis governed by Mr. Bo.

Chinese investigators have since connected Mr. Bo’s high-profile wife, Gu Kailai, to the killing. State media have suggested she had Neil Heywood poisoned after a falling out over “economic matters” – a reported attempt to move the Bo family’s billions out of the country – with other sources hinting at an extramarital affair gone awry. Astonishing stuff from the Communist Party, which usually excels at presenting a façade of unity.

Adding to the screen-worthiness of the tale, Mr. Bo’s playboy son, Bo Guagua – who drove a red Ferrari around Beijing and hung out with movie star Jackie Chan – has now disappeared from his classes at Harvard University. The richest businessman in the eastern Chinese city of Dalian, where Mr. Bo was previously mayor, has also vanished, presumably into police custody. Oh, and lest we forget, Mr. Bo’s flamboyant top policeman started the fireworks back in February by entering a U.S. consulate and trying to defect.

But beyond the headlines of murder, lust and corruption in southwest China, the fallout from the scandal has also tilted the world’s most populous country away from the throwback leftist politics Mr. Bo embraced. Once-embattled economic liberals within the ruling Communist Party are suddenly on the rise, using the affair to bludgeon their political rivals.

The very public humiliation of Mr. Bo – now stripped of all party posts after previously being seen as a shoo-in to be named to the Standing Committee – has brought to the surface the decades-old split that pits a group of liberal-minded reformers like Premier Wen Jiabao against a hard-line wing of the party that believes it is time for China, after 20 years of unprecedented economic growth accompanied by widening inequality, to increase state control and turn back toward its socialist roots.

It’s the biggest rupture inside China’s ruling elite since 1989, when Zhao Ziyang was ousted as Communist Party chairman after he sided with the pro-democracy demonstrators on Tiananmen Square. The shift comes at a critical juncture, just months before the Communist Party will unveil its new leadership lineup, with seven of the nine current members of the all-powerful Standing Committee of the Politburo set to retire this fall. The new Politburo lineup will set the direction for the world’s rising superpower for the coming decade.

After years of being the lone voice at the top advocating greater economic and political openness within China’s one-party system, the scandal in Chongqing has, at last, given Premier Wen the upper hand.

It was Mr. Wen himself who launched the move against Bo Xilai, declaring on March 15 that “without the success of political reforms, historical tragedies like the Cultural Revolution could possibly happen again.” It was a clear reference to Mr. Bo, who encouraged Chongqing residents to sing “red” songs associated with the Cultural Revolution of the 1960s and’70s, a time of deadly class warfare around the country.

At his fateful press conference, Mr. Wen said Chongqing administrators needed to “reflect” on their errors. Within 24 hours, Mr. Bo was ousted and the tales of murder and corruption started coming to light.

There are reports on overseas Chinese websites that another ally of Mr. Bo’s, senior Politburo member Zhou Yongkang, is himself now the subject of an internal Communist Party probe. Both Mr. Zhou, who heads the country’s massive security apparatuses, and Mr. Bo are seen as protégés of former Chinese leader Jiang Zemin, who at 85 still wields substantial influence and is seen as a rival of current President Hu Jintao.

(All that’s known for sure about the next Politburo is that Xi Jinping, the current vice-president, will head it. Little is known about the political views of Mr. Xi, who is believed to have been selected as a compromise between the two factions.)

With Mr. Bo out of the picture, the liberal wing of the party is advancing proposals to privatize state-owned assets and open China’s financial sector to foreign competition. Meanwhile, Mr. Bo’s statist ideas are being sidelined. Many popular leftist and nationalist websites have been blocked on Chinese servers since shortly after Mr. Bo’s troubles began last month.

“There’s no need to decide which side to stand on, because everybody knows they need to stand opposite to Bo,” said Zhang Ming, a professor of political science at Renmin University in Beijing. A series of editorials in the state-controlled media have urged China’s people, and particularly the military (where Mr. Bo is believed to still have allies), to “firmly support” the decision to oust Mr. Bo.

Some worry that useful ideas are being purged along with the man. While Mr. Bo gained fame for his use of Maoist propaganda in Chongqing – as well as a no-holds-barred campaign against the city’s crime syndicates – the “Chongqing Model,” as the experiment came to be known, also included efforts to address China’s yawning urban-rural income gap through a trial reform of the country’s hated household registration system, one that finally allowed rural-born residents to claim the same rights as those born in the city. Mr. Bo also oversaw a massive expansion of social housing in Chongqing, as well as a push to improve the local ecology by replacing billboard advertisements with millions of newly planted trees.

The Chongqing Model, and its emphasis on greater state involvement in the economy, was often held up as one possible road China’s next generation of leaders could follow. The contrasting approach – the “Guangdong Model” – was on display in coastal Guangdong province, where local Communist Party boss Wang Yang focused his efforts on opening the economy and even allowing some non-government organizations to take root. Now, many expect the Guangdong Model will prevail simply because no one will dare express support for the Chongqing Model, lest it be interpreted as support for Mr. Bo.

“I have no idea what’s happening with Bo Xilai. The real issue is that public discussion and debate has been wiped out. And that’s a real danger,” said Wang Hui, a Tsinghua University professor seen as one of the intellectual leaders of the “new left” movement with which Mr. Bo was affiliated.

Leftists and liberals alike find common ground on one point: that Mr. Bo’s case needs to be heard in public so that China can finally break the cycle of justice carried out behind the curtain. “This country has no rule of law because the leaders don’t follow the law,” said Tie Liu, a veteran Communist Party journalist who has backed Mr. Wen in his reform push. “This is why history keeps repeating itself in China.”

My personal perception is that there is a vibrant political debate going on in China - with extremes that are about the same as Stephen Harper's Conservatives vs Thomas Mulcair's NDP here in Canada - but it, the debate, is not held during public elections, rather, it takes place within the Chinese Communist Party and, oddly enough, in the pages of the foreign language press.

The CCP is Deng Xiaoping's party,not Mao's; the CCP is not a communist party except in name. Mao's party was communist because Zhou Enlai was a committed communist - something I have always found hard to fathom because Zhou was a very, very smart man and, in my opinion, communism makes neither social nor economic sense, but he was also, like his mentor Sun Yat-sen, enamoured of the Russian (USSR) model. Deng was not a communist; he saw, clearly, the inherent internal contradictions in Marxist communism and, equally, the the social nonsense inherent in the Leninist model. Post Deng the CCP has 'tested' two extremes: first through a nearly 'free market' group, called the Shanghai Gang, led by Jiang Zemin, which probably went a bit too far, being more 'free market' than e.g. Mitt Romney - in any event Jiang 's favoured successor was rejected by the Party's council and, instead, they (s)elected Hu Jintao to lead China and he would be very comfortable leading a provincial NDP government in Canada.

Bo Xilai wanted to go father left that Hu - too far, I think for the Party leaders who, like Stephen Harper and Thomas Mulcair, are searching for the elusive political centre.

 

[a_majoor]

More on Bo Xilai and what the effect will be on China (long article, follow link):

http://www.nbr.org/research/activity.aspx?id=236

The Bo Xilai Crisis: A Curse or a Blessing for China?

An Interview with Cheng Li
By Anton Wishik
April 18, 2012

China currently faces a daunting political crisis, due to the ongoing scandal riveting the country as the Chinese Communist Party (CCP) prepares for its upcoming leadership transition. Bo Xilai—formerly party chief of Chongqing and a member of China’s Politburo—has been stripped of his posts due to an investigation stemming from Chongqing police chief Wang Lijun’s February 2012 visit to the U.S. Consulate in Chengdu. During his conversations with U.S. officials, it is believed that Wang revealed damaging information about Bo and sought refuge due to his fear of persecution. After spending a night at the consulate, Wang was taken into custody by Chinese officials, a fate later shared by Bo and his wife Gu Kailai. Wang is currently being investigated, while Bo has been accused of various transgressions and Gu is suspected of involvement in the death of British citizen Neil Heywood in late 2011.

Bo, the son of a famous Chinese revolutionary, came to national prominence during his time as party chief of Chongqing due to his charisma, his ruthless crackdown against organized crime, and his promotion of Maoist songs and imagery. Before being assigned to lead Chongqing, Bo served as minister of commerce and mayor of Dalian in Liaoning province. In the months prior to this scandal, Bo was viewed as a rising star and a candidate for promotion to the nine-member Politburo Standing Committee.

NBR spoke with Cheng Li, an expert on Chinese elite politics and a senior fellow at the Brookings Institution, about the significance of these events, what they mean for China’s upcoming leadership transition, and their implications for future Chinese political reforms.


How significant is this crisis for China?

My overall assessment is that the dismissal of Bo Xilai is a very positive event in China’s political development. While it has already constituted the most serious political crisis since the 1989 Tiananmen incident (and perhaps since the 1971 Lin Biao incident), the Hu Jintao–Wen Jiabao administration may have successfully avoided an even bigger crisis. In stark contrast with the 1989 Tiananmen incident, China’s economy and society have hardly been disrupted, at least up until now. This reflects the maturity of Chinese society and the strength of the country as a whole. To a great extent, this crisis has been a good thing for China. It not only reveals major flaws in the Chinese political system, but may also help the Chinese leadership, intellectual communities, and the general public reach a new consensus, thus contributing to bold and genuine political reforms. However, if the leadership fails to seize this great opportunity, the CCP will be in greater jeopardy in the years to come.


What is the Bo Xilai case really about: factional infighting, Bo’s notorious egotism, or ideological conflict?

To a certain extent all of the above, though none of these explanations, nor any combination of them, adequately tells the whole story. Something far greater is at stake.

Bo Xilai’s story is certainly linked to China’s present-day factional politics, which I characterize as “one party, two coalitions.” One coalition is led by former president Jiang Zemin’s protégés. While the core of this coalition used to be the so-called Shanghai Gang, “princelings” (leaders who come from high-ranking family backgrounds) have become more central since the fall of Shanghai party boss Chen Liangyu on corruption charges in 2006. Bo Xilai is a princeling, as his father Bo Yibo was a revolutionary veteran who served as vice premier. The other coalition primarily consists of former officials from the Chinese Communist Youth League and is led by President Hu Jintao and Premier Wen Jiabao. These two coalitions fight with each other over power, influence, and policy initiatives. Bo Xilai’s career advancement can certainly be attributed to his princeling background and his patron-client ties with Jiang Zemin.

Bo’s downfall is also related to his own egotistical personality and notorious ambition. While his ambitions were most recently focused on achieving a seat on the Politburo Standing Committee, it would have not stopped there. In the months preceding the crisis, members of Bo’s staff spread the rumor that he could become China’s next premier. In addition, Su Wei, a scholar close to Bo at the Chongqing Party School, compared Bo Xilai and Chongqing mayor Huang Qifan to former leaders Mao Zedong and Zhou Enlai in comments circulated in both the Chongqing and national media.

The Bo episode is also related to ideological conflict, as he was associated with China’s “new left” thinking—especially through his Mao-style campaigns, such as the “smash the black” anti–organized crime campaign—and advocated an ultra-egalitarian and ultra-nationalist development model for China, known as the “Chongqing model.”

But this episode is really more than the sum of these factors. Most importantly, it involves Wang Lijun’s attempted defection to the United States and the charges against Bo’s wife related to the murder or assassination of British citizen Neil Heywood. The Chinese public has been shocked by both incidents, since this is a very unusual set of events in CCP history. How is it possible that national hero Wang Lijun and one of China’s top leaders are capable of such actions? When these kinds of charges are involved, all Chinese leaders—regardless of which faction they belong to—will not support Bo Xilai any longer, because the current crisis poses a challenge to the legitimacy of the CCP itself. The stakes are very high, and the challenge facing the CCP leadership is intimidating.

 

[a_majoor]

Long article about the new(ish) American policy in the Pacifc. Many of the outlines were laid out in the "Project for a new American Century" http://www.newamericancentury.org/ . This may well be the center of gravity for American policy, and with our own links growing in the Pacific region (through bilateral agreements, free trade and eventual inclusion in the Trans Pacific Partnership) we are going to be heavily involved as well:

http://blogs.the-american-interest.com/wrm/2012/04/30/high-noon-in-beijing/

High Noon in Beijing
Walter Russell Mead

Secretary of State Hillary Clinton will be arriving in Beijing at perhaps the diciest moment in US-China relations since Richard Nixon reached out to shake Chou Enlai’s hand on his historic visit to what American conservatives then still called Red China.

Last fall, the Obama administration pulled off a diplomatic revolution in maritime Asia — the coastal and trading states on and around the Asian mainland that stretch in an arc from Korea and Japan, down to Australia and Indonesia, and sweep around through southeast Asia to India and Sri Lanka. Via Meadia has been following this story closely; it is the biggest geopolitical event since 9/11 and, while it builds on a set of US policies that go back at least as far as the Clinton administration and were further developed in the Bush years, the administration’s mix of policies represent a decisive turning point in 21st century Asian history.

The legacy press, still befuddled from drinking too much of the ‘US in decline’ Koolaid so widely peddled in recent years, has still not grasped just how audacious,  risky and above all successful the new strategy is: the United States is building a Pacific entente to counter — though not to contain — the consequences of China’s economic growth and military posture in the region. The US is lending its unequivocal support to the smaller Asian states who have boundary disputes with China in the resource-rich, strategically vital South China Sea. It has announced new deployments of troops and new military agreements as it extends its military network from northeast Asia (Japan, Korea, the Pacific islands) south and east to Australia, Singapore and beyond. It continues to deepen its strategic relation with India — Asia’s other nuclear superpower with a billion plus citizens and a country which openly states that the purpose of its (growing) nuclear arsenal is to balance China.

Additionally, the US has launched a new round of trade talks, the Trans-Pacific Partnership, or TPP that will open markets dramatically among a group of Asia-Pacific countries. China has not been invited to join.

These are bold moves. Many China specialists were unnerved as the administration rolled the new policy out last fall, fearing that the US push back would strengthen hardliners in Beijing to commit to a full-on anti-US policy.

That hasn’t happened yet, largely because in spite of all the misguided hype about China’s inexorable rise there isn’t actually much Beijing can do about Washington’s new activism. The more it pushes its territorial claims in the South China Sea, the more tightly the other countries will cling to Washington’s skirts. Dumping its dollar hoard would wreck the Chinese economy. Taking a super hard line on Syria and Iran will annoy the Gulf Arabs whose oil keeps China’s factories running. Naval exercises with Russia don’t even impress North Korea, much less cow Washington.

While a formidable power in many respects, and one potentially with a great future, China is simply not a peer competitor of Washington in Asia at this point, and its illusions and pretensions left China uncomfortably exposed when the real world power decided to raise its game in the Pacific Basin.

Fine tuning diplomacy is a difficult thing, especially when adjusting the relations of great powers. Since the administration began to roll out its maritime initiatives last fall, a number of things have happened — some by coincidence, some as unforeseen consequences of steps the US took — that have actually made our China policy much stronger and more effective than planned.

It is these follow-ons and the coincidences more than our actual Asia policies that make Clinton’s Beijing trip so fraught. Look at what has happened since the new US Asia policy launched last year:

    Myanmar, one of China’s only two regional allies, has switched sides, and is working increasingly closely with America’s partners in the Pacific Entente.
    The Philippines have taken a highly visible, confrontational posture toward Chinese ‘interlopers’ in waters Manila claims, and have attempted to engage direct US support.
    China’s economic growth has slowed and its exporters are experiencing shrinking demand even as labor unrest at home puts new pressure on manufacturers.
    The Bo Xilai fiasco has exposed the fissures in China’s leadership, destroyed hopes of a smooth power transition and shone a spotlight on entrenched corruption and the conflict and rivalries at the heart of China’s ruling elite.
    Now, the daring night time escape of Chen Guangcheng and his race across 500 kilometers to the shelter of the US embassy has both enraged and humiliated China’s government — hours before Secretary Clinton’s scheduled arrival.

It is a safe bet that some Chinese nationalists, including people high up in various state and military organizations, are shaking with rage and frustration as they contemplate these events. Conspiracy theories popular in some circles associate the US with the Bo Xilai scandal — after all, it was to the US consulate in Chengdu that Wang Lijun fled and where he spilled the beans about the reign of Bo in Chongqing. Chen’s flight to the embassy will further deepen the angry paranoia in some circles; it will seem obvious to some that he could not have made this escape without more help than a handful of dissidents could provide, and the timing is so spectacular that it must be part of some secret, long prepared American scheme. Put these ‘facts’ together with the new American assertiveness in the region, and many serious people in China will draw the conclusion that the US is trying to do to China what it did to the Soviet Union. Furthermore, they will think we are perilously close to success — so close, that any further concessions and retreats must be resisted as a matter of life and death.

(That within a few months a leading Chinese official and a leading dissident should both have turned in extremis to American diplomats should, by the way, make Americans everywhere stand a little taller. We have somehow managed to acquire a reputation for honest dealing and political courage in China; it should be our goal to preserve that. There are times when it is appropriate to be proud of your country, and this is one of them.)

These events tap into some deep wounds in Chinese historical memory, and fears of being ignored, humiliated and pushed around by a self-righteous and imperial West, never far beneath the surface in modern China, are flaring up. It’s worse because so recently China seemed to be riding so high; many people inside China believed all the hype about China’s rise and America’s decline as thoroughly as any group of European intellectuals, and the shock of realizing how wrong they were is severe.

Meanwhile, the strategy of China’s current leadership had been to use both the Bo Xilai affair and the painful blow back from China’s South China Sea adventure to deepen their hold on power and strengthen the country’s adherence to the path of reform at home, “peaceful rise” abroad. Wen Jiabao was using Bo’s fall as an opportunity to target the entire left-nationalist-populist bloc in Chinese politics and cement the power of the more modernizing, reformist wing of the ruling party. Bo’s fall allowed the political leadership to reassert its leadership over the military as well, as military leaders fell in line to fight against those in the army who favored Bo’s nostalgic, left-tinged nationalism.

From a US perspective, that looked like a pretty good outcome. The Obama administration was ready to approach China with open hands, offering its newly strengthened reformist leadership an opportunity to move forward even as it applied some discreet pressure on issues like Iran and Syria where it hopes for more Chinese help.

The Chen escape seriously complicates that strategy. From the standpoint of China’s leadership, the flight points to a degree of incompetence and laxity that is deeply humiliating to all concerned. How can a single blind man in poor health outwit the security establishment of the most powerful one party state on earth? How can a dissident under house arrest pop up in American hands on the eve of vital talks with the American Secretary of State?

And finally there is another shadow that will hang over Secretary Clinton in Beijing. Japan’s Prime Minister Noda will be meeting President Obama while Secretary Clinton is meeting the Chinese, and the Japanese and American leaders are expected to discuss enhanced security cooperation that would see Japanese troops training on US bases even as the island nation expands military ties, arms shipments and “strategic” aid throughout Asia. High on both President Obama’s and Prime Minister Noda’s to-do list: developing strategies to rein in China’s last remaining regional ally North Korea.

None of this suggests easy bargaining over the fate of Mr. Chen, nor does it make it any easier for the Chinese leadership to cooperate right now on other issues of mutual concern. The Obama administration cannot force Mr. Chen to walk out into Chinese custody without a serious loss of prestige and moral capital; the Chinese authorities cannot let him go without paying a high price.

When the Obama administration set out to check China last year, it did not intend to corner or contain it. But America is a bit stronger and China somewhat weaker and more fragile than most people thought, and our policies have succeeded perhaps a bit more than we might have liked.

Kurt Campbell, Clinton’s chief Asia deputy, flew quietly to Beijing to try to prevent the Chen question from spoiling the summit; no doubt he and Secretary Clinton will have to talk fast and talk well to provide their hosts with some reassurance that the US genuinely does want reasonable and respectful relations with Beijing.

What we all seem to be learning in Asia is that events have a logic and a pace of their own. America can set a policy in motion, but we can’t control or fine tune the consequences of our policies as they ripple out across the world. Many conversations with US officials in this and in prior administrations have left me convinced that the US is not trying to contain China the way we once contained the Soviet Union. While virtually all Americans at senior levels believe that over time economic progress will lead to political change in China, this is because most Americans are hardwired to think in those terms and this whiggish faith in the historical process is not a statement of policy or intent.

Leading Americans in both parties generally hope for a peaceful and gradual reform process rather than violent conflict in China; they do not want to dismember or impoverish China and they would not welcome its disintegration. Nor do Americans see the evolution of a future Asian security order in zero-sum terms. The United States wants to prevent Chinese domination of Asia but we do not want to dominate the region ourselves.

Many Chinese, I have found on my visits there, have a much darker view of our intentions, and see the US and China entangled in a zero sum battle for dominance which only one side can win. For now, it appears that the US, surprisingly to some Chinese analysts, is winning that contest. We should not expect Chinese hard liners to accept that situation with calm and resignation, even if their present options are limited.

Secretary Clinton will be flying from China on to India by way of Bangladesh. With Japan’ Noda in Washington and Clinton in New Delhi, the view from Beijing is likely to remain dark. Additional irritating events are sure to occur. It is in the interest of smaller powers like Vietnam and the Philippines to exploit their new support from Washington for what they can; this will make them more assertive in the South China Sea and new incidents will likely occur that confront the Chinese government with an unpalatable choice between looking weak or enduring a crisis. The question of US arms sales to Taiwan will no doubt come up. North Korea can be expected to misbehave. More actions by more dissidents at home will agitate domestic opinion and affect China’s standing abroad. The global economic uncertainties will force China’s hand on economic policy in ways that may complicate its relations with trading partners, including the US. During the interminable US election campaign now already under way, the two candidates and their surrogates will compete to sound tough about China on trade, security and humanitarian issues.

America’s new stance in Asia is real and it won’t be changing soon. The consequences of that shift for Asian politics and for US-China relations are complex and won’t be fully understood for some time. But this is a murky and even a dangerous time; we wish Secretary Clinton every possible success as she attempts to build bridges between two very different political cultures and world views.