Chinese Military,Political and Social Superthread

[a_majoor]

China is everyone's great white hope, but...

http://www.nypost.com/p/news/opinion/opedcolumnists/the_year_of_bankrupt_gov_ts_vv1vR5wWL7yNqe7FPTtXFL

2010: The year of bankrupt gov'ts

By RALPH PETERS

Last Updated: 3:35 AM, December 24, 2009

Posted: 1:35 AM, December 23, 2009

Yes, Virginia, there is a Santa Claus. But he only comes for kids -- not for governments that have bragged, borrowed and spent their way into bankruptcy. Two Thousand Ten is going to belong to the Grinch.

For spendthrift governments around the world, the new year's going to bring massive defaults. The new globalization may be the globalization of a second wave of financial crises.

The world economy is not convalescing. It's just been pumped full of unaffordable medicines. Borrowing madly, countries as diverse as Greece and Dubai have been buying time, not fiscal health.

Built on financial quicksand, Dubai (an Arab Las-Vegas-without-the-fun) is in collapse (predicted by this column years ago). Quasi-governmental corporations backed by the ruling family are at least $80 billion in the hole. The recent transfusion of 10 billion bucks from Abu Dhabi merely applied a Band-Aid to a hemorrhage. Dubai can't pay.

Eighty billion in bad debts may not sound high in President Obama's Washington, but Dubai's just a city pretending to be a country. It produces nothing. There's no inherent wealth. It Madoff-ed the world with extravagant brochures and nutty projects.

Speculators went nuts, proclaiming Dubai the city of the future, where wealth could only beget more wealth. The frenzy produced the craziest real-estate bubble in the world, as gullible investors mistook a couple of shopping malls for a civilization.

Dubai's approach to development mirrored that of much of the Arab world, expecting money to do all of the work. But Dubai's ambitions weren't backed by oil wealth, only vast development schemes that never should have fooled a single investor. But investors wanted to be fooled.

Speculation hasn't been the only villain generating financial ruin around the world. Another villain has been exploding entitlements. Several European states (plus my favorite foreign country, California) have been downed by a self-inflicted one-two punch.

In Ireland and Spain, housing bubbles created the illusion of roaring economies -- and pandering governments inflated already generous social programs. In Italy and Greece, state giveaways, bubble economies and rabid corruption created national debts in excess of GDP.

Even in this age of globalization and complex financial instruments, one law of the financial jungle remains brutally true: The bills come due eventually.

Dubai's bankrupt, but frightened investors pretend otherwise. Greece is bankrupt, and the other Euro-currency states don't know what to do: The strict fiscal-policy rules for the Euro-zone are crumbling.

Will EU governments -- each with its own problems -- cobble together a rescue package? Greece's socialist government certainly isn't going to embrace painful austerity measures -- and the population, conditioned to an entitlement mentality, would tear Athens apart.

And after Greece, what about Spain? With 20 percent unemployment and an economy strangled by disincentives to job creation, Spain counts on being considered too big to fail.

The Baltic states' economies are tubercular. Central Europe's headed for the post-modern equivalent of debtors' prison. And even Britain (and the global bankers' fortress, the City of London) is still in deep treacle.

Then there's California (and New York).

Taken in isolation, any of these problems could be managed. But these "local" crises refuse to be isolated. Toss in suspect statistics from other troubled states and hollow economies from Argentina to Russia, and 2010 looks unpredictable, to put it gently.

Perhaps the world's financial wizards will head off this looming debacle, too -- but don't count on it. Chain reactions could devastate European banks and budgets .

The good news? Venezuela's also in serious economic trouble. The bad news? Venezuela's also in serious economic trouble.

Then there are the great unknowns, a Russian economy that may be far more fragile than anyone wants to admit, as well as China, opaque and insatiable.

One of the reasons China's desperate to keep expanding its trade is that its banking sector is flimsier than chopsticks -- plagued by uncollectible sweetheart loans made to favored firms and institutions. Perhaps Beijing will dominate the 21st century. But it's also possible that China's economy will turn out to be the biggest Ponzi scheme in history.

The best scenario we could see in the global economy in 2010? Rescue-package fire brigades rushing to deal with these crises individually. What's the worst? A chain reaction that leads to a rash of national defaults, followed by a world banking and liquidity crisis, Part II.

What of our own country, with its soaring debt, congressional irresponsibility and an administration whose No. 1 priority is expanding unaffordable entitlement programs? Draw your own conclusions.

 

[Edward Campbell]

Here, reproduced under the Fair Dealing provisions (§9) of the Copyright Act from the CCTV (China Central Television) web site, is a report that says that China will not establish a naval base in the Middle East “at this time:”

http://english.cctv.com/program/worldwidewatch/20100102/101235.shtml
<click on oink for full video report>

China has no plans for overseas naval base

2010-01-02 10:12 BJT

China has no plans to establish a base of operations in the Mid East and will continue using a supply vessel to service its anti-piracy naval task force in the Gulf of Aden. The Defense Ministry issued the clarification after a rear admiral suggested that Beijing should set up a permanent base in the region.

An overseas supply base might be an option in the future, but it's not being considered at this time.
The Ministry of Defense says some countries have overseas supply bases, but the Chinese fleet ships are supplied at sea and through port in the Gulf of Aden region.

The statement is in response to an outspoken retired rear admiral, Yin Zhou. He says a base would bolster China's long-term participation in anti-piracy operations.

Yin's suggestion came after a Chinese cargo ship and its crew of 25 were rescued from Somali pirates on Monday.

The suggestion has evoked wide international concern.

The BBC reports that China's international deployments are being closely monitored for signs of increasing assertiveness in its foreign defense policy.

The AFP news service reports Yin's proposal raises the idea that China could build foreign bases elsewhere.

China has sent four naval task forces to the region since the end of last year. The first group of ships were at sea for more than four months without docking.

Since then, Chinese vessels have docked at a French naval base for supplies. The US, European Union and Japan also have supply bases in the region.

Chinese ships working in the anti-piracy role currently use a French naval base in the region.

My guesstimate is that RAdm (ret’d) Yin Zhou let the cat out of the bag and we will see a Chinese naval base just a wee tiny bit later than planned.

 

[CougarKing]

My guesstimate is that RAdm (ret’d) Yin Zhou let the cat out of the bag and we will see a Chinese naval base just a wee tiny bit later than planned.

Perhaps a PLA-N base in Burma/Myanmar- in the same way the USSR used to have a joint naval base with Vietnam (Cam Ranh Bay) during the later years of the Cold War from the late 70s onward- might also be a worthwhile prediction considering the article about the Indian Ocean being another future area of competition for China and India you posted last year?

 

[a_majoor]

A somewhat more realistic view of China's economic trajectory:

http://nextbigfuture.com/2010/01/pessimist-view-of-china-economic-future.html

A Pessimist View of China Economic Future

Gordon G. Chang,author of The Coming Collapse of China, indicates why he thinks China will not have a $123 trillion economy in 2040

This related to previous articles at this site and are directed at 1993 nobel prize winning economist Robert Fogel predicting China to have a $123 trillion economy in 2040 (Note: others like Goldman Sachs predict China to have a $57 trillion economy in 2040

    First, he neglects to mention that China’s educational system, despite all the money it receives, remains inappropriate for a modern society.

    Second, Fogel is right to note that migration of labor to cities has been the engine of Chinese growth, but that process has stalled in the global economic downturn. Yes, China still has cheap labor, but not mentioned in the article are the generally accepted projections that the labor force will level off in a half decade and then shrink.

    Third, it’s true that Beijing’s National Bureau of Statistics does not fully account for the output of the fast-growing service sector. That’s why its estimate of 13.0% growth for 2007 is low by about two percentage points. Then, small businesses were the most vibrant part of the economy. Today, the failure to properly assess the output of small business is resulting in an overestimation of GDP because these enterprises, which tend to be more dependent on exports, are suffering more than the larger ones.

Quantcast

    Fourth, Fogel’s views of the political system are questionable. He neglects to say that Hu Jintao has presided over a seven-year crackdown and that the Communist Party tolerates less criticism today than it did two decades ago. Economic reform has stalled because China has progressed about as far as it can within its existing political framework. A true market economy, for example, requires the rule of law, which in turn requires “institutional curbs” on government.

    Fifth, Fogel apparently knows almost nothing about Chinese consumer spending. Historically, consumption contributed about 60% of China’s economic output. Today, it accounts for about 30%--and that number is going lower. Why? Beijing’s stimulus spending, about $1.1 trillion last year, is devoted almost entirely to building infrastructure and industrial capacity. As a result, the role of consumer spending is decreasing.


Nicholas Consonery is a China analyst at Eurasia Group also has a more negative view on China's future economy

    The most important reason why we won't see 1.4 billion Chinese earning an average of $85,000 per year is simply that the Earth can't sustain such rapid growth. The biggest environmental challenge for China's leadership will be in securing enough water to keep the economy afloat.

    Fogel warns that Europe faces some serious demographic challenges. True enough, but as Fogel only briefly acknowledges, China has an aging population of its own to reckon with. Chinese statistics show that the country's birthrate fell 42 percent from 1990 to 2007, and government projections suggest that by 2025, nearly a quarter of China's population will have celebrated its 60th birthday.

China can rely less on cars and planes and more on high speed rail.

Also, advanced electric bikes will also be part of China's transportation solutions.

China is developing cleaner energy with a plan that is compatible with high growth

China is building grand canals to address water shortages and is also building up desalination capabilities.

China is now ranked second in scientific research output.

    An annual report by data analyst Evidence, published today by the Department for Business, Innovation and Skills, shows that China has moved into second place after the US in a ranking of nations by their research output.

    Although the UK published 91,273 papers in 2008 – an average of 2.3 per researcher and up more than 11,000 on 2007 – it was not enough to keep pace with the most populous country in the world, which has experienced a four-fold rise in its output over the past decade.

    China produced more than 110,000 papers in 2008 – an increase of about 30,000 on the 2007 figure.

    The Evidence data show that the UK was responsible for 7.9 per cent of the world’s research papers in 2008, down from an average of 8.5 per cent over the past five years. The US retained its lead, although its world share has also dropped, from 34 to 29.5 per cent over the period.

    The report notes an “exceptional” global increase in the number of papers published this year, driven largely by China, Brazil, India and Iran.

    Despite the drop in its share of publications, the UK’s share of the world’s citations – formal references of papers by fellow academics – increased. It rose from an average of 11.2 per cent over the past five years to 11.8 per cent in 2008, putting the UK in second place after the US.

 

[CougarKing]

http://news.yahoo.com/s/ap/20100111/ap_on_re_as/as_china_missile_defense

BEIJING – China's military successfully tested a system for intercepting missiles in mid-flight on Monday, state media reported.

Few details were given about the test, with the official Xinhua News Agency saying only that "ground-based midcourse missile interception technology" was tested within Chinese territory and achieved the expected objective.

"The test is defensive in nature and is not targeted at any country," Xinhua said.

The report follows repeated complaints in recent days by Beijing over the sale by the U.S. of weaponry to Taiwan, including PAC-3 air defense missiles. These sales are driven by threats from China to use force to bring the island under its control, backed up by an estimated 1,300 Chinese ballistic missiles positioned along the Taiwan Strait.
Communist-ruled China split with Taiwan amid civil war in 1949 and continues to regard the self-governing democracy as part of its territory. Beijing has warned of a disruption in ties with Washington if the sale goes ahead, but has not said what specific actions it would take.

China's military is in the middle of a major technology upgrade, spurred on by double digit annual percentage increases in defense spending. Missile technology is considered one of the military's particular strengths, allowing it to narrow the gap with the U.S. and other armed forces.

Xinhua did not further identify the system tested, although China is believed to be pursuing a number of programs aimed at shooting down stealth aircraft and downing or disabling cruise missiles and precision-guided weapons.

The PLA continues to add to its capabilities.

 

[CougarKing]

Google defies China over censorship:

http://news.yahoo.com/s/ap/20100113/ap_on_hi_te/as_china_google

By JOE McDONALD, AP Business Writer Joe Mcdonald, Ap Business Writer – 2 hrs 10 mins ago
BEIJING – Google's threat to pull out of China over censorship is a rare display of defiance in a system where foreign companies have long accepted intrusive controls to gain access to a huge and growing market.
Dismayed by the prospect of a China without Google, visitors left flowers at its Beijing headquarters Wednesday as Web sites buzzed with words of support and appeals to stay.

"I felt it's a pity and hope it will not withdraw from the Chinese market," said a man who left flowers at the building in the high-tech Haidian district and would give only his surname, Chang. "Google played a key role in the growth of our generation. The control (of the Internet) is excessive."

In industries from automaking to fast food, companies have been forced to allow communist authorities to influence — and sometimes dictate — their choice of local partners, where to operate and what products to sell.

Web companies have endured criticism for cooperating with a communist system that tightly controls information. Google Inc., Yahoo Inc., Microsoft Corp. and others have acceded to pressure to block access to politically sensitive material.

"The Internet is like media, and the media are under tight government control, so that poses additional challenges for foreign Internet companies compared with, say, manufacturers of TV sets, mobile phones or autos," said Edward Yu, president of Analysys International, an Internet research firm in Beijing.

Google's decision even to talk publicly was rare in a system where Chinese officials react angrily to criticism. Officials have wide regulatory discretion and companies avoid saying anything that might prompt retaliation.China's foreign ministry and Ministry of Industry and Information Technology did not respond to requests for comment but the state Xinhua News Agency cited an unidentified official as saying the government was seeking more information from Google. Phone calls to Google spokespeople in Beijing and Hong Kong were not answered.

Comments left on Chinese Internet bulletin boards praised Google's stance and appealed to the Mountain View, California-based search giant not to leave.

"Google is a great soldier of freedom. You don't bend to the devils," said a note on the site Tianya.cn.

A posting on http://www.mop.com pleaded, "Google please don't go. We can't let you go. Real man, we support you."

A photo on a Chinese Web site showed a visitor outside the Google building bowing in a traditional gesture of respect.

China's growing consumer market is especially important to many companies at a time when global demand has plunged. The government is forecasting 8.3 percent economic growth for 2009 and China is on track to overtake Japan as the second-largest economy.

China has the world's most-populous Internet market, with 338 million people online as of June, and foreign Internet companies eager for a share of that.

But despite risking damage to their reputations by cooperating with the government, they have struggled to make headway against intense competition from Chinese rivals. Yahoo, eBay Inc. and others have given up and turned over control of their China operations to local partners. Google is the last global Internet company to manage its own China arm.

Google trails local competitor Baidu Inc. but has gained market share at the expense of smaller competitors. Google had 31.8 percent of search revenues in 2009, versus 60.9 percent for Baidu, according to Analysys.

Baidu.com's U.S. shares rose 14 percent in trading Wednesday morning, while Google stock dipped 2.5 percent.

Google created its China-based Google.cn site in 2006, agreeing to censor results by excluding sites to which access was blocked by government filters, popularly known as the Great Firewall of China.

Despite that cooperation, Beijing accused Google last year of spreading pornography and access to the site was temporarily blocked. The company's video site, YouTube.com, is unavailable to users in China.

Google said Tuesday it would stop censoring search results on Google.cn. That would allow users to find politically sensitive photos and Web sites abroad, though downloading them might still be barred by government filters. It also said it had discovered that computer hackers had tricked human-rights activists into exposing their e-mail accounts to outsiders.

On Wednesday, Google.cn said its top search term of the day was "Tiananmen," possibly due to Web surfers looking for material on the government's violent crackdown on 1989 pro-democracy protests. The No. 2 search topic was "Google leaving China."

Google.cn appeared to be still censoring results. A search for the banned Falun Gong spiritual movement returned a message saying the browser could not open the page. A notice on the site says some results were deleted in line with regulations.

Google managers told employees to go home and they did not know whether to come back Thursday, said an employee who spoke on condition of anonymity because she was not authorized to talk to reporters. Google is a sought-after employer and has long had its pick of China's brightest university graduates.

Ran Yunfei, a magazine editor and blogger in Sichuan province in China's southwest who is known for his liberal views, likened Google's threatened departure to that of a dissident leaving China for freedom. "I don't support the departure of all dissidents. Only those obedient to the officials would remain. That would too well suit the taste of the dictatorial regime," Ran wrote on his blog, which is hosted outside China.

____

Associated Press Writers Alexa Olesen, Chi-chi Zhang, Vincent Thian and Charles Hutzler and AP researchers Yu Bing and Bonnie Cao contributed to this report.

 

[Edward Campbell]

Strategypage:

Ghost Net
March 30, 2009: Nearly a year ago, the Dali Lama asked computer security experts to examine whether his computers, and those of organizations that support freedom for Tibet (which the Dali Lama is the exiled spiritual leader of). Soon, more experts at the University of Toronto were also called in, and after ten months of carefully examining thousands of PCs, it was discovered that 1,200 computers belonging to anti-Chinese Tibet groups, and other governments they were in communication with, had been infected with a hidden computer program (a virus inserted by hackers) that gave control of the computers to someone, or some group, in China. The security experts dubbed the clandestine hackers effort, Ghost Net. The University of Toronto team did not accuse the Chinese government of being behind this Cyber War operation, although they did find evidence of the Chinese government taking advantage of information gathered by Ghost Net. Some at the University of Toronto speculated this might actually be a CIA operation, to try and discredit China.

When confronted with all this evidence, the Chinese government denied any knowledge of it. Computer security researchers at Cambridge University in Britain, who participated in the investigation, do accuse China of being responsible for Ghost Net.

Further to this, see: The Ghost Net Report and these two stories, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s Globe and Mail:

http://www.theglobeandmail.com/news/technology/google-china-spat-shines-light-on-cyberspying/article1429835/

Google-China spat shines light on cyberspying
‘Attacks like this are very hard to block and very hard to filter'

Georgina Prodhan and Melanie Lee

London and Shanghai — Reuters

Wednesday, Jan. 13, 2010

Cyberattacks disclosed by Google Inc. (GOOG-Q587.09-3.39-0.57%)and Adobe Systems Inc. that may lead Google to quit China highlight a sophisticated type of bespoke cyberspying that could be more widespread than previously thought.

Google, the world's top search engine , said Tuesday it might shut down its Chinese site, Google.cn, after an attack on its infrastructure it believed was primarily aimed at accessing the Google mail accounts of Chinese human rights  activists.

Unlike ordinary viruses that are released into cyberspace and quickly spread from computer to computer, the type of attack launched against Google and at least 20 other companies was likely handcrafted uniquely for each targeted organisation.

Such attacks, most often delivered using Adobe PDF documents sent by e-mail, secretly deposit a software file on a user's hard drive allowing the computer to be remotely accessed. Typically, top personnel with access to high-level information are targeted with such software, known as malware.

Since each organization is hit with a malware that looks different from malware delivered to others, companies cannot detect samples spreading around the globe and protect themselves as they normally would, security experts say.

“Attacks like this are very hard to block and very hard to filter,” says Mikko Hypponen, chief research officer at security software  maker F-Secure, who has been monitoring such attacks against Chinese human-rights activists since 2005.

The fact that this kind of malware can easily sit in computers undetected, potentially forever, also means the true number of such hacking attempts is hard to estimate.

“I don't think they're very unusual at all. I think they're very usual -- that's the problem,” says John Walker, a professor in cyber-crime at the Britain's Nottingham Trent University and chief technology officer of security software adviser Secure-Bastion.

Google said it had found that at least 20 other companies had been targeted in attacks originating from China, and that it was in the process of notifying them.

Adobe, which makes the popular Acrobat, Flash and Photoshop software including the PDF format often used by hackers, said Wednesday its computer-network systems had been attacked, but no sensitive information was stolen.

Mr. Hypponen said the logical explanation was that hackers wanted to gain access to Adobe's development systems to better exploit PDF vulnerabilities.

Cyber security firm iDefense said that according to its sources, the attack on Google bore similarities to a July 2009 attack in which about 100 information technology-focused companies were targeted with e-mail campaigns using PDF files.

“It is possible that the two attacks are one and the same, and that the organisations targeted in the Silicon Valley attacks have been compromised since July,” it said.

In September, a coordinated cyberattack on the Chinese assistants of foreign news agencies contained malware that also exploited an Adobe Acrobat vulnerability.

Other companies targeted in the latest attacks did not immediately come forward.

Microsoft Corp., which has recently launched a Chinese version of its much-hyped new search enging Bing, said in a statement: “We have no indication that any of our mail properties have been compromised.”

Defence contractors are other likely targets.

Last year, cyberspies that appeared to be based in China were reported to have breached the Pentagon's $300-billion (U.S.) Joint Strike Fighter project, using vulnerabilities in the networks of contractors involved in building the fighter jet.

The Pentagon and top supplier Lockheed Martin later said they were not aware of any specific concerns, when asked about the Wall Street Journal report.

Defence companies, facing shrinking conventional defence budgets, are expanding into the development of ways to wage and protect themselves against cyber warfare, as the borders between consumer and defence electronics blur.

AND​

http://www.theglobeandmail.com/report-on-business/china-tells-web-companies-to-obey-controls/article1430640/

China tells Web companies to obey controls
In first official response to Google threat to leave country, Beijing gives no hint of compromise

Joe McDonald

Beijing — Associated Press

Published on Thursday, Jan. 14, 2010

In China's first official response to Google's threat to leave the country, the government Thursday said foreign Internet companies  are welcome but must obey the law and gave no hint of a possible compromise over Web censorship.

Foreign ministry spokeswoman Jiang Yu, without mentioning Google by name, said Beijing prohibits e-mail hacking, another issue cited by the company. She was responding to questions about Google at a regular ministry briefing.

“China's Internet is open,” Ms. Jiang said. “China welcomes international Internet enterprises to conduct business in China according to law.”

Google said Tuesday it would stop censoring search results in China and might shut down its China-based Google.cn site, citing attempts to break into accounts on its Gmail service used by human rights  activists.

Ms. Jiang gave no indication whether the government had talked with Google. The state Xinhua News Agency said earlier officials were seeking more information about its announcement.

The main Communist Party newspaper warned companies to obey government controls as Web users visited Google's Beijing offices for a second day to leave flowers and notes expressing support for the company.

Peoples Daily, citing a cabinet official's comments in November, said companies must help the government keep the Internet safe and fight online pornography and cyber attacks.

Web companies must abide by “propaganda discipline,” the official, Wang Chen, was quoted as saying. “Companies have to concretely increase the ability of Internet media to guide public opinion in order to uphold Internet safety.”

Also Thursday, a law professor and human rights lawyer, Teng Biao, wrote on his blog that someone broke into his Gmail account and forwarded e-mail to another account. Mr. Teng said he did not know whether he was one of two Chinese activists mentioned by Google as hacking targets.

“Google leaving China makes people sad, but accepting censorship to stay in China and abandoning its ‘Don't Be Evil' principles is more than just sad,” Mr. Teng wrote.

Outside the Google offices, some visitors poured small glasses of liquor, a Chinese funeral ritual.

One man left a copy of Peoples Daily, which he said represented the tightly controlled state media that China's public would be left with if Google pulls out and censorship continues.

“Google is the true hero in this silent city,” said a note left outside the building in the capital's Haidian technology district. Referring to the government Web filter, popularly known as the “Great Firewall,” another note said, “The tallest walls cannot divide people's sentiments. Google: Bye, let's meet on the other side of the wall.”

Employees entered and left the building but declined to talk to reporters.

Google's main U.S. site has a Chinese-language section but Beijing's filters make that slow and difficult to access from China.

Beijing promotes Internet use for business and education but operates extensive filters to block access to material deemed subversive or pornographic, including websites run by dissidents and human rights groups. Its market of 338 million Internet users is the world's most populous.

The Global Times, published by Peoples Daily and known for a fiercely nationalistic tone, took an unusually conciliatory stance Thursday, warning that Google's departure would be a “lose-lose situation” for China.

“Google is taking extreme measures but it is reminding us that we should pay attention to the issue of the free flow of information,” the newspaper said. It said China's national influence and competitiveness depend on access to information and added, “We have to advance with the times.”

The White House said Wednesday it was briefed by Google on its plans in China but refused to give details. Spokesman Robert Gibbs saidPresident Barack Obama  made his stance on Internet freedom clear during his trip to China in November, when he told students an open exchange of information makes all countries stronger.

Mr. Gibbs said the White House is awaiting China's response to Google's announcement. Asked whether the incident could cause a U.S.-China chill, Mr. Gibbs said: “We stood in China when we gave the answer about a free Internet. So, the president and this administration have beliefs about the freedom of the Internet.”

It appeared unlikely other companies might follow Google's lead and try to change how business is done in China.

“As long as you aren't involved in politics, the media or pornography, the government will leave you alone,” said Siva Yam, president of the United States of America-China Chamber of Commerce , which primarily represents U.S. companies in China.

There must be little doubt that Chinese cyber-warfare is real, aggressive and all pervasive – they (the leadership in Beijing) want to know what we (all of us, Americans, Chinese, Zimbabweans for heaven’s sake) know and what we think and they want to influence what we think, say and do.

China can be pressured and influenced – slowly and quietly but, I suspect, never publicly. It is likely that China – the government, anyway – cannot back down on this matter without losing ‘face.’ And ‘face’ matters – more than many (most?) Westerners understand.

 

[a_majoor]

Google's official response:

http://googleblog.blogspot.com/2010/01/new-approach-to-china.html

A new approach to China

1/12/2010 03:00:00 PM
Like many other well-known organizations, we face cyber attacks of varying degrees on a regular basis. In mid-December, we detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google. However, it soon became clear that what at first appeared to be solely a security incident--albeit a significant one--was something quite different.

First, this attack was not just on Google. As part of our investigation we have discovered that at least twenty other large companies from a wide range of businesses--including the Internet, finance, technology, media and chemical sectors--have been similarly targeted. We are currently in the process of notifying those companies, and we are also working with the relevant U.S. authorities.

Second, we have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. Based on our investigation to date we believe their attack did not achieve that objective. Only two Gmail accounts appear to have been accessed, and that activity was limited to account information (such as the date the account was created) and subject line, rather than the content of emails themselves.

Third, as part of this investigation but independent of the attack on Google, we have discovered that the accounts of dozens of U.S.-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users' computers.

We have already used information gained from this attack to make infrastructure and architectural improvements that enhance security for Google and for our users. In terms of individual users, we would advise people to deploy reputable anti-virus and anti-spyware programs on their computers, to install patches for their operating systems and to update their web browsers. Always be cautious when clicking on links appearing in instant messages and emails, or when asked to share personal information like passwords online. You can read more here about our cyber-security recommendations. People wanting to learn more about these kinds of attacks can read this Report to Congress (PDF) by the U.S.-China Economic and Security Review Commission (see p. 163-), as well as a related analysis (PDF) prepared for the Commission, Nart Villeneuve's blog and this presentation on the GhostNet spying incident.

We have taken the unusual step of sharing information about these attacks with a broad audience not just because of the security and human rights implications of what we have unearthed, but also because this information goes to the heart of a much bigger global debate about freedom of speech. In the last two decades, China's economic reform programs and its citizens' entrepreneurial flair have lifted hundreds of millions of Chinese people out of poverty. Indeed, this great nation is at the heart of much economic progress and development in the world today.

We launched Google.cn in January 2006 in the belief that the benefits of increased access to information for people in China and a more open Internet outweighed our discomfort in agreeing to censor some results. At the time we made clear that "we will carefully monitor conditions in China, including new laws and other restrictions on our services. If we determine that we are unable to achieve the objectives outlined we will not hesitate to reconsider our approach to China."

These attacks and the surveillance they have uncovered--combined with the attempts over the past year to further limit free speech on the web--have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.

The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences. We want to make clear that this move was driven by our executives in the United States, without the knowledge or involvement of our employees in China who have worked incredibly hard to make Google.cn the success it is today. We are committed to working responsibly to resolve the very difficult issues raised.

 

[a_majoor]

Looking ahead to the demographic future of China and the implications of the one child policy:

http://esr.ibiblio.org/?p=1566#more-1566

Twenty Four Million New Socialist Men = War
A silly webzine posts some serious news:

A new study released Monday by the Chinese Academy of Social Sciences found that more than 24 million Chinese men of marrying age are likely to find themselves unable to find women to marry come 2020. The reason? There just aren’t enough females to go around, because Chinese mothers often abort their baby girls.

This raises a question what do you do with 24 million excess New Socialist Men?

I was going to suggest that Democratic party should import ‘em all as a last-ditch effort to avoid getting clobbered in the 2010 midterms, but even that might not work — these poor bastards have probably already had more Marxism and central economic planning than they’d be willing to vote for.

Unfortunately, the most likely end for these millions of surplus males is as fodder in a war. It’s the traditional way for totalitarian thugocracies to deal with this sort of problem, and China’s got no shortage of targets. The Sino-Indian war of 1962 did not actually resolve the disputes over Aksai Chin and Arunachal Pradesh, the ensuing diplomacy has been inconclusive and tensions are increasing. The Ussuri River dispute with the Russians has been resolved, on paper, but it is unlikely the Chinese have forgotten that they have historical claims to oil-rich Sakhalin Island. And then of course there is always Taiwan.

The effects of the Great Recession we’re now undergoing amplify the likelihood of war. The export-led Chinese economy is vulnerable to demand fluctuations in its major trade partners, especially the U.S., and is already being pretty seriously hammered by the collapse in world trade volumes. It’s hard to tell just how seriously because Chinese statistics are notoriously opaque and subject to political manipulation, but you know the numbers can’t be good when Chinese government spokesmen start muttering that Peking may stop buying Treasury bonds.

If the U.S. slides into a double-dip recession, it is entirely possible the Chinese economy could crash with it, creating a pressing need for just the sort of distraction a war of conquest provides. Under that scenario, the war could begin as soon as 2011. Even if the U.S. recovers, it’s hard to see how the war can be delayed beyond 2020 or so without creating an unacceptable risk to internal stability. The longer Peking waits, the more likely it is that those excess males will start some serious aggro inside Chinese borders.

The only good news is that the Chinese military is basically incapable of operating anywhere it can’t walk to. They have negligible airlift capability. All their sealift capability is short-range, designed for a surge invasion of Taiwan and probably not adequate even for that. The Chinese Navy’s survival odds against American air and submarine assets would be grim. And the roads crossing China’s borders are inadequate for large troop movements (one reason the Sino-Indian war fizzled out is that it was a logistical nightmare for both sides).

Nevertheless, some major war within the next ten years seems almost certain. Because even if the Chinese government were composed of angels, I don”t think there’s any historical instance of coping with an excess of unmarriageable males that large without a war.

 

[a_majoor]

More on the implications if Google pulls out of China:

http://www.popularmechanics.com/technology/industry/4342408.html

Why China Needs Google More Than Google Needs China

Cyber attacks targeting Gmail accounts of Chinese human right activists have led to a decision by Google to relax self-censorship for China. This may be the first step in a much larger pullout from China by tech giant Google. This bold business move is a good thing, according to Popular Mechanics's senior technology editor, Glenn Derene. Here, Derene argues that China needs Google's innovation and creativity much more than Google needs Chinese business.

By Glenn Derene
Published on: January 13, 2010

Much has been made of Google's moral compass since the "Don't be evil" company started censoring search results at the request of the Chinese government. Then yesterday Google announced that Gmail accounts of Chinese dissidents had been hacked as part of a broad spying operation apparently tied to the Chinese government, and the company decided that it would no longer censor its search results, even if that meant pulling out of the Chinese market altogether.

It's tempting to see Google's move as a moral objection, but to me it seems highly strategic. The truth is, Google's operations in China have been troubled from the start, and the Gmail hacking incident is part of a far greater threat to Google—and, indeed, American technology businesses operating in China in general—and Google needs to push back now, or withdraw altogether.

Google has had operations in China since 2006, but it has never been the dominant search player there—that dubious honor goes to Baidu, a company with close ties to the Chinese government. The hacking incident wasn't narrowly aimed at the dissidents, according to The New York Times, but part of a broader attack on source code at multiple technology companies. This is the great big problem for American tech businesses—it's widely known that Chinese hackers (either at the behest of their government or with its tacit approval; it's never been entirely clear) routinely attempt to steal the intellectual property of American companies. The military has been focused on this problem for some time when it comes to defense contractors, but these potential thefts are equally problematic for tech companies.

Google had previously made the bet that its search engine product could be profitable and socially beneficial even with the restrictions of the Chinese government, but a product such as Gmail loses tremendous value when privacy is compromised. Now the e-mail service will be forever associated in China with surveillance, tainting the product for the foreseeable future.

The standoff will only get more interesting from here. Currently, it is a case of who needs whom more. It seems unlikely that China will loosen its restrictions for the second most popular search engine in the country. But having Google pull out its business may prove too much of an embarrassment and an acknowledgement of systemic repression, two things the Chinese government would like to avoid. Google could end up losing out on a potentially huge market, but if it doesn't stand up for its IP, the Chinese will most certainly take such steps again in the future.

In fact, the tough part is that even if Google, and, for that matter, other tech companies, pull operations out of China, they will still face hacker thefts of IP from afar—Internet larceny knows no boundaries. But China may be taking the bigger risk here. Part of the reason the U.S. has proved so technologically creative is that we have a free and open information economy—and China has, thus far, benefited from advances born here. If U.S. tech companies are forced to take a defensive stance toward China, that country will find itself isolated from the creativity of the West. And try as they might, it's doubtful that China can completely steal its way to technological creativity. China has done a great job of developing its manufacturing base, but that country still lags when it comes to technological innovation. And I'd argue that China won't develop along those lines until it allows for the free exchange of ideas and the protection of intellectual property. Hacking e-mail and driving the greatest information discovery service ever invented out of your country certainly won't help those goals.

 

[CougarKing]

Quite a development considering that investment had mostly only gone the other way before:

Taiwan to allow Chinese investment in bourse
Updated January 16, 2010 10:02 PM 

TAIPEI (AP) - Taiwan will allow China's institutional investors to invest up to $500 million in the island's stock market, the government said Saturday, in its latest step to relax control on trade and investment with its rival.

Taiwan had for decades barred Chinese capital, fearing it could give Beijing control of the local economy, but opened selected industries to Chinese investment for the first time last year.

Starting Monday, Chinese institutional investors can buy shares in Taiwan's stock market, with purchases by any single investor limited to $80 million, the Financial Supervisory Commission said.
The current investment cap would amount to less than 5 percent of the total capitalization of the Chinese institutional investors approved by mainland authorities, short of the 10 percent analysts had expected.

In an effort to stabilize local financial markets, Taiwanese authorities have in recent weeks tried to halt an influx of foreign capital that has driven up local shares prices and currency.

The combined Chinese ownership will be limited to 10 percent in financial, natural gas and other government-controlled firms, and 8 percent in shipping firms, the commission said.

Buying shares in local airlines, telecom, real estate and broadcasting firms will be barred, the regulator said in a statement posted on its Web site.

The announcement came as a memorandum of understanding signed between the sides took effect, allowing the establishment of banking, securities and insurance firms in each other's territory.

Also on Saturday, the Bank of China, the country's largest foreign exchange lender, said in Beijing it will submit an application to open its first branch in Taiwan, with an initial management team of 20 to 30 staff, according to a statement on the bank's Web site.

Since Taiwanese President Ma Ying-jeou took office 20 months ago, he has relaxed control on bilateral investment and launched direct air and shipping links between the two rivals, hoping closer trade ties could help boost the island's sluggish economy.

The attempts to strengthen economic ties between Taiwan and China are complicated by the two sides' split after a civil war in 1949. China still considers the island a part of its territory.

 

[Edward Campbell]

Quite a development considering that investment had mostly only gone the other way before:

The Chinese are awash in cash and all those US dollars have to go somewhere. Africa - loans and investments rather than old style aid - must be balanced by safe investments: Taiwan; Singapore; Canada; South Korea; Australia; <gasp> India and so on.

 

[Antoine]

Sorry for the  :highjack: but I read the following news story about China becoming a leader in R&D. What is the proportion of Chinese technological breakthrough that comes from their Intelligence activities is still unclear in my mind, I might be an eternal paranoiac.

China Ascendant by Sophie L. Rovner in Chemical & Engineering News, January 11, 2010, Volume 88, Number 2, pp. 35-37

No matter how you slice it, China is on a scientific roll.

This past year, China became the world leader in terms of the number of chemistry patents published on an annual basis, according to Chemical Abstracts Service (CAS), a division of the American Chemical Society. And growth in publication of scholarly papers by the country's researchers far outpaces that of other nations, reports Thomson Reuters, a news and information company based in New York City.

"If China's research growth remains this rapid and substantial, European and North American institutions will want to be part of it," says Jonathan Adams, director of research evaluation at Thomson Reuters. "China no longer depends on links to traditional G-8 partners [Canada, France, Germany, Italy, Japan, Russia, the U.K., and the U.S.] to help its knowledge development. When Europe and the U.S. visit China they can only do so as equal partners."

More at http://pubs.acs.org/cen/science/88/8802sci1.html

P.S. Sorry to not copy all of the story herein but I am unsure about the Copyright rights from this paper.

Regards,

 

[tsokman]

I always thought PRC was the real target of this war along with the Russian Federation...

 

[Antoine]

Is the tip of a big icebreg ?

China: act on scientific fraud by Ned Stafford/Hamburg, Germany, Chemistry World, 15 January 2010:

The Chinese government is being called on to do more to ensure the scientific integrity of its researchers after UK-based journal Acta Crystallographica Section E  was forced to retract dozens of papers describing over 70 crystal structures found to have been fabricated by Chinese researchers.

In response to the discovery, the UK medical journal The Lancet  last week published a damning editorial under the headline 'Scientific fraud: action needed in China', explicitly calling for the country's government to act to prevent future cases of scientific fraud.

More at:

http://rsc.org/chemistryworld/News/2010/January/15011003.asp

 

[CougarKing]

Quite a story:

Associated Press link

BEIJING – When Li Shiming was stabbed through the heart by a hired assassin, few of his fellow villagers mourned the local Communist Party official many say made their lives hell by seizing land, extorting money and bullying people for years.

Instead, villagers in the northern town of Xiashuixi have made Li's teenage killer something of a local hero. More than 20,000 people from the coal-mining area petitioned a court for a lenient sentence.

"I didn't feel surprised at all when I heard Li Shiming was killed, because people wanted to kill him a long time ago," said villager Xin Xiaomei, who says her husband was harassed for years by Li after the two men had a personal dispute. "I wanted to kill Li myself, but I was too weak."

The murder trial has again cast a harsh light on abuses of power by communist cadres and the frustration many ordinary Chinese feel with a one-party system that sometimes allows officials to run their districts like personal fiefdoms.
(...)

 

[CougarKing]

Multilanguage promo video for Hong Kong Disneyland's opening back in 2008

The fact that this promo is in Mandarin, Cantonese, Tagalog/Filipino and Thai shows that the theme park is trying to attract visitors from a bigger market.
:boring:

 

[CougarKing]

The Chinese government slams US Sec.of State Clinton for calling for greater internet freedom in China in the wake of the Google China controversy:

BEIJING -- China's Foreign Ministry sharply criticized Secretary of State Hillary Rodham Clinton's Thursday call for broad Internet freedom, saying that the United States should "cease using so-called Internet freedom to make groundless accusations against China."

Ma Zhaoxu, a Foreign Ministry spokesman, said on the ministry's Web site that "the U.S. has criticized China's policies to administer the Internet and insinuated that China restricts Internet freedom. We are firmly against the words and deeds contrary to the facts and harmful to China-U.S. relations."

A Chinese newspaper also joined the criticism of Clinton, who gave her speech in the wake of Google's declaration that it would stop censoring results on its Chinese-based search engine even if that meant losing its license after a cyberattack on its computers.

The Global Times said that the U.S. "campaign for uncensored and free flow of information on an unrestricted Internet is a disguised attempt to impose its value on other cultures in the name of democracy."

Clinton said that freedom on the Internet is closely linked to other basic freedoms, including freedom of speech, worship and assembly. And she said the U.S. government would help fund and foster individuals and companies that help those in countries with restricted access find ways to circumvent obstacles.

.......

Washington Post link

 

[CougarKing]

Beijing beginning to become wary of its so-called ally?

Reuters link

RUILI, China (Reuters) - The giant red poster staring over China's Wanding border crossing with Myanmar proclaims that their "brotherly feelings will last forever."

World  |  China

A few kilometers (miles) away, just outside the dusty frontier town of Ruli, a border village proudly tells its few visitors that Myanmar chickens cross over the rickety bamboo fence to lay their eggs in China.

But behind the bonhomie and poems of friendship, China's relationship with its impoverished southeastern neighbor and erstwhile ally formerly known as Burma is deeply troubled.

This was bought sharply into relief last August when Myanmar's military overwhelmed and disarmed the Kokang rebel group, triggering an exodus of more than 37,000 refugees into China, prompting an unusual outburst of anger from Beijing.

"I wouldn't characterize them as friends, in the way Britain and America or Australia and New Zealand could be regarded as friends. It's often a tense and difficult relationship," said Ian Storey, a fellow at Singapore's Institute of Southeast Asian Studies.

"It's basically a marriage of convenience. The Burmese rely on China for money and armaments, and China uses its position at the U.N. Security Council to protect Burma to some extent, in return for which China gets access to the country's natural resources, and it gets a voice in ASEAN," he added.

In 1997, despite fervent U.S. and EU opposition, Myanmar joined the Association of Southeast Asian Nations, set up in 1967 as a bulwark against the spread of Communism in the region.

Logic may dictate that Myanmar and the generals who have run it for the last five decades or so would give unquestioning support to China.

China backed Myanmar following the bloody suppression of pro-democracy protests in then-capital Yangon, once called Rangoon, in 1988, and has continued to stand by the junta and sell them arms in the face of sweeping international sanctions.
In 2006, during a visit to China's southwest Yunnan province which shares a long border with Myanmar, Myanmar's Commerce Minister Tin Naing Thein thanked Beijing for being a "good neighbor" and offering "vigorous support" after the 1988 events.

Yet profound suspicion of China in Myanmar, which dates back to before independence from the British in 1948, has not changed despite Beijing's overt support in the past 20 years or so.

For years, China backed the Communist Party of Burma's armed struggle against the Myanmar government.

"Chinese soldiers wore Burmese Communist military uniform and they participated in actual battles against the Burmese armed forces," said Maung Zarni, a Myanmar expert at the London School of Economic's Center for the Study of Global Governance.
"The current leadership is made up of people who cut their teeth in the anti-communist/anti-Beijing operations in the 1950s and 1960s. It's difficult to conceive of change of heart on behalf of the Burmese generals toward Beijing."

FEAR OF UNREST

China's fear is that the kind of unrest seen last August in Kokang will be repeated with any one of a number of different ethnic rebel militias, and spill into its territory again.

The threat is especially acute as the generals gear up for an election sometime this year -- a ballot rights groups call a sham -- by trying to get rebel groups along the border to cooperate, by force if necessary.
The problem for China is most acute in Yunnan, where the long and in places remote frontier is porous, and ethnic minorities on both sides share close blood ties.

Activists say that Myanmar's army is preparing for another offensive against these rebels, including the 30,000-strong ethnic Chinese United Wa State Army (UWSA), denounced as a narcotics cartel by the United States.

That worries China, not only because of the potential for more refugees, but because, simply stated, instability on the border is bad for business.

"Anything that causes the border to shut we of course do not welcome," said Chinese jade trader Lin Mingqi, sitting in his shop stuffed full of jade bracelets, Buddhas and charms made from Burmese jade and overlooking Ruli's border post.

"We're here to do business. We don't want to have to worry about politics."

Already drugs flow easily from Myanmar into China, fuelling an AIDS epidemic in Yunnan driven by the sharing of dirty needles, as well as prostitution.

Yet Myanmar is very good at hedging its bets, playing off friend and foe alike to ensure the survival of the regime.

Luo Shengrong and Wang Aiping, two academics at Yunnan University, wrote in last month's Chinese journal Contemporary International Relations that the Kokang attack was deliberately designed to tell Beijing not to take relations for granted.

"It was done to show the West that Myanmar's military government is adjusting its foreign policy, from just facing China to starting to have frequent contact with the United States, India and other large nations, to have a balanced foreign policy," they wrote.

"(The attack) also seemed to be showing that they were reducing their reliance on China."

They noted that the operation could be construed as Myanmar trying to curry favor with the United States, by showing Washington what a useful ally Myanmar could be against China, a country viewed with mistrust by many on Capitol Hill.

The academics noted that as a "reward" for the Kokang operation, Washington lifted a visa ban on Myanmar officials to let Prime Minister Thein Sein address the United Nations in New York.

While it is hard to pinpoint exactly what Myanmar's secretive government hoped to achieve more broadly with the Kokang move, the academics' comments are a reflection of Chinese suspicion as to what their supposed friend is up to.

The neighbors have significant business ties. Bilateral trade grew more than one-quarter in 2008 to about $2.63 billion.

In late October, China's CNPC started building a crude oil port in Myanmar, part of a pipeline project aimed at cutting out the long detour oil cargoes take through the congested and strategically vulnerable Malacca Strait.

RIVALRY

For China, any discomfort at its friendship with Myanmar may also be outweighed by another strategic consideration -- India.

While relations may have improved considerably with New Delhi since the brief border war in 1962 that poisoned ties for decades, China is a strong supporter of India's traditional enemy Pakistan.

"From China's perspective, having a close relationship with Burma gives it an additional pressure point on India because it has good relations with Pakistan and increasingly with Nepal and also with Bangladesh," said Singapore-based Storey.

"If you were sitting in New Delhi, you may see that as a policy of encircling India with friends of China."

Myanmar's wily generals realize this, and see being friends with India as an import foil to China.
"If you look at the patterns of their foreign relations, they're constantly playing one off the other. If it's not China and the U.S., it's China and India. It's a very simple but effective strategy, to keep everyone coming after you," said David Mathieson, Myanmar researcher for New York-based Human Rights Watch.

"You always see things balanced out. Say the Chinese come one month, and then the Indians comes the next, or a senior Burmese official goes to Delhi. It's just them being prudent, saying 'we don't have friends, we just have partners'."

(Editing by Megan Goldin)

 

[CougarKing]

A planned UAV bomber for the PLAAF:

link

Although this is just in the development stage, "Dark sword" is expected to be in service in 2018.