July 5, 2014: Chinese officials recently told their North Korean counterparts that China expects North Korea to obey the “three nos” (no nuclear weapons, no economic or political collapse and no war). North Korea was told that it must obey these rules or face serious retribution. This apparently now includes a Chinese sponsored coup or a Chinese invasion if needed. China is not certain this threat will work, because the North Korean leadership has long proved it will do stupid and self-destructive things. The Chinese, however, have run out of patience, or hope that the North Korean leaders will wise up on their own or without forceful persuasion. Then again, the North Koreans may believe, with some justification that China is bluffing.

China could manage an invasion of North Korea, especially after a political collapse that left the North Korean military disorganized. Moreover most of the North Korean troops are deployed in the south, along the DMZ and have neither the modern weapons nor the fuel that Chinese forces possess. Nevertheless the Koreans are fierce fighters (and fiercely nationalistic, especially when it comes to China) and such an invasion could be a bloody embarrassment for China. This spotlights the fact that, for all the hundreds of billions China has spent on defense during the last two decades, they are still a second rate military power with a long history of poor performance on the battlefield. Thus the combined military might of Korea, Japan, Vietnam, India and Taiwan are still more than the Chinese could handle. Add American forces and China is at a severe combat disadvantage and that is expected to persist for several decades (at least).

The government anti-corruption campaign has prosecuted more high-ranking thieves recently, but has done something else that is not publicized. Western media have access to data about Chinese financial transactions outside China and there has been a sharp increase in the families of high-ranking officials (all the way to the very top) selling assets in China and moving the cash offshore to more discreet (and hard to trace) investments. This appears to be an official policy that consists of warning officials and their families to be less greedy and obvious in their use of government connections to get rich. At the same time the government is prosecuting non-government corruption investigators. These individuals and groups could discover who still owns a lot of these corrupt fortunes and embarrass local and national leadership. The corruption is not going away but the government believes it is possible to make it less visible and thus less of a political threat to the power of the communists who still run the country. This will be enforced by continuing to prosecute the greedy and indiscreet. In other words, if enough evidence of corruption becomes public you are at risk of prosecution (which means prison, possibly execution and confiscation of much of the wealth). When a senior official is prosecuted all their wealth is not seized. In exchange to silence (by the defendant and his kin) some of that stolen wealth is left alone and prosecutions of other family members is limited.

July 4, 2014: Vietnam announced that it will spend $540 million to build 32 patrol vessels to confront the growing number of Chinese military and commercial vessels intruding into Vietnamese coastal waters. Vietnamese officials also met with their Filipino counterparts to coordinate strategy to deal with Chinese aggression in the South China Sea.

July 3, 2014: China and South Korea issued a joint demand that North Korea get rid of its nuclear weapons. This was the first time China publicly joined with South Korea to criticize North Korea. This is very embarrassing for North Korean officials.

July 2, 2014: China announced a new project; the Silk Road Economic Belt and 21st Century Maritime Silk Road. This is an ambitious effort to revive the ancient the Silk Road (trade overland route from China to Europe, India and the Middle East) and use it in conjunction with moving goods through Chinese ports via Chinese ships. This overland route dried up four hundred years ago because Europeans built ships made it more economical to go by sea and China lost control, profits and influence in Central Asia is derived from this trade. China is already investing heavily in Central Asia and building roads, rail lines and pipelines to obtain raw materials (especially oil) and export goods to pay for it all. The new program proposes even more of this and extending the trade links to Europe, India and the Middle East, just like in the old days. While this makes Russia and India nervous, the nations that used to host the Silk Road are enthusiastic. In ancient times “road” was actually several routes, over 6,000 kilometers long through Central Asia (mainly Kazakhstan, Uzbekistan, Afghanistan, Uzbekistan Turkmenistan and parts of Russia).

July 1, 2014: Japan made a fundamental change in its post-World War II constitution by declaring that its military forces could engage in offensive (attacking) operations while outside of Japanese territory. Attacking was always allowed once an invader had entered Japanese territory, as Japan never agreed to not defend itself. But the post-World War II constitution banned overseas offensive operations, which Japan had been engaged in for decades before it attacked the United States in 1941. China sees this Japanese decision as an aggressive act aimed at China. In response China ordered all media (state controlled or privately owned) to adopt an anti-Japanese tone until further notice. This causes problems for Japanese firms operating in China and hurts sales of Japanese products in China. Other nations in East Asia are also hostile to the growing military strength and aggressiveness of Japan, but that is tempered by the need for allies to face even more dangerous behavior by China. All this is a Chinese effort to use lingering hatred of Japan (because of bad behavior during World War II) to weaken opposition to current Chinese expansion plans.

June 29, 2014: Hong Kong concluded a referendum on greater democracy for Hong Kong. Some 22 percent of registered voters cast electronic ballots (using their government ID) in the non-binding poll. Most people voted for more democracy.  Currently China controls who can be allowed to run for office in Hong Kong and directly appoints many officials. Government controlled media condemned the vote, but Hong Kong does have enough autonomy to get away with this sort of protest, and many others besides. As long as there is no violence the government tolerates it, for now.

June 28, 2014: For the first time a senior Chinese official (the minister of Taiwan Affairs) visited Taiwan and met with a mixed reception. Two events were cancelled because of the possibility of very violent reaction to the Chinese official. Many Taiwanese are strongly opposed to closer relations with China because they believe all this is simply a cover to make it easier for China to conquer Taiwan. China began making these friendly moves in 2008 and now millions of Chinese tourists visit Taiwan each year and Taiwanese are major investors in Chinese businesses. Many Taiwanese tolerate all this because it is profitable.  

India protested new Chinese maps showing a major portion of India as being within China’s borders. This is just another escalation in a long-running border dispute over who owns Arunachal Pradesh.  The Chinese claims have been on the books for decades but in the last decade China has become more vocal about it. That's one reason India has been rapidly increasing its defense spending. But since both nations have nuclear weapons, a major war over Arunachal Pradesh is unlikely.

June 27, 2014: Filipino and American marines held a joint training exercise in Filipino waters. This was meant to send a message to China.

June 20, 2014: In the northwest (Xinjiang) Uighur terrorists attacked a police station. The police repulsed the assault, killing thirteen of the attackers and suffering three wounded.

June 17, 2014: The Philippines announced that it would continue to aggressively patrol its coastal waters. This was aimed at China because it is usually Chinese fishermen that are arrested off the Philippines for illegal fishing.

June 16, 2014: Another 17 people were executed for terrorism. Most of these are Uighurs, Turks from the northeast. More than a hundred Uighurs are being held and prosecuted for terrorism and most, if not all, will be executed or spend a decade or more in prison.

June 15, 2014: A Chinese oil company operating in Sudan has begun testing personnel for possible exposure to radiation. An oil exploration device which uses a radioactive material was improperly stored and up to 70 local workers may have been exposed. High profile accidents like this are one of the many risks faced by companies working in danger zones around the world. However, sub-Saharan Africa has more than its share of environmental, public relations and security risks. Despite its communist founders the current Chinese government has encountered increased criticism for its "natural resource imperialism" in sub-Saharan Africa. China believes that the access to natural resources outweighs the political risks. China imports substantial amounts of South Sudanese and Sudanese oil. Chinese companies are actively involved in oil exploration and oil production in both Sudans and tends to shrug off incidents like this and get away with it.

June 14, 2014: For the fourth time in three months the Philippines has officially complained about China dredging sand onto reefs to create small islands for tiny military outposts. This has created at least five new islands in areas within the Filipino economic zone. China does not publicize these efforts and claims they are an internal matter and no foreign nation has the right to get involved.

China recently held air force training exercises involving the use of designated stretches of highway for emergency airfields for fighters and transports. The first time this was done was in 1989 and so far it is known that ten stretches of highway in Liaoning (adjacent to North Korea), Shandong (facing South Korea across the Yellow Sea) and Fujian (opposite Taiwan) provinces have been designated for such emergency use. There may be others that have been designated but not practiced on, so their location can be kept secret.

June 13, 2014: The government said it would not send warships to the Paracel islands, where Chinese and Vietnamese commercial and coast guard ships have been confronting each other for months over Chinese oil drilling activities. China admits to having 71 vessels (including 32 from the coast guard) providing security for the two oil drilling rigs that are 278 kilometers off the Vietnam coast and 32 kilometers from Chinese occupied islands in the Paracels. China uses collisions or the threat of collisions to keep Vietnamese ships away. One Vietnamese ship has been sunk in over 1,500 collisions (mostly “bumps”) so far. Over a dozen ships of both sides have suffered significant damage. Both countries have taken the dispute to the UN. The Chinese moves off Vietnam were not a surprise. In 2012 one of the Paracel islands (Woody Island) was declared the center of Sansha, a new Chinese municipality (city). Sansha is actually Woody Island and dozens of smaller bits of land (some of them shoals that are under water all the time) in the Paracels and the Spratly Islands to the south. In fact, the new "city" lays claim to two million square kilometers of open sea (57 percent of the South China Sea).  This is part of a strategy based on the ancient principle that, when it comes to real estate, "possession is 9/10ths of the law." It's the law of the jungle, because all the claimants are armed and making it clear that, at some point down the road, force will be used to enforce claims. The nations bordering the South China Sea, and the new city of Sansha, are creating alliances and trying to persuade the United States to lend some military, or at least diplomatic support to opposing an increasingly aggressive China. This aggression is popular inside China, where the government has increasingly been playing the nationalist card. All Chinese know their recent history. In the 19^th century the corrupt and inept imperial government lost control of much of China (Hong Kong, Manchuria, and so on) to better armed and aggressive foreigners. Then the communists took control in 1948 and began to win China some respect. Now China (still run by the communists) is asserting its ancient claims on adjacent areas, like the South China Sea. But those ancient claims also include control of Vietnam, Taiwan, the Philippines and much of the Russian Far East. Asserting ancient claims is how the two World Wars began but China insists it is merely protecting itself. This was frequently heard before both World Wars began.

Another source of Vietnamese anger at China is the growing Chinese recruiting of Vietnamese women to be prostitutes or brides in China. This problem began in the late 1970s when, to control population growth most Chinese couples were restricted to only one child. This has been widely enforced, to the point where the average number of children per couple has been 1.7. But many of those couples aborted a child if it was a female, because much more importance is attached to having a male heir. Thus there are 35 million more males than females in China, and the disparity is growing. These surplus males are coming of age, and the competition for wives is causing problems. Women are taking advantage of their scarcity, but men are also going to neighboring countries to buy, or even kidnap, young women to be wives. This is causing ill will with neighbors, especially Vietnam.  

In an unexpected development there recently appeared on the Chinese Internet photos of a carrier model being displayed at an official event. The detailed model had the hull number 18 and the ship looked similar to an American CVN (a Nimitz class nuclear aircraft carrier). The Chinese CVN has four catapults and three elevators and much other evidence of being nuclear and very similar to the 100,000 ton ships of the Nimitz class.

June 11, 2014: Japan and China traded accusations over an incident today that had Chinese Su-27s and Japanese F-15s flying dangerously close to each other over the East China Sea.

China responded to Vietnam, Japan and the Philippines going to court over South China Sea disputes by declaring it would ignore the court proceedings and not recognize any “anti-Chinese” court decisions. China claims “indisputable sovereignty” over all the South China Sea and does not recognize any other claims. There won’t a court decision until 2015 and challenging an “anti-China” decision exposes China to trade sanctions, which would stall economic growth and create a recession that could cause unrest. Chinese leaders are eager to avoid that. Meanwhile China continues to militarize the South China Sea. This involves establishing more small bases on reefs and rocks and putting more patrol ships in the area and warplanes overhead. Then there are the growing number of Chinese fishing vessels, many of them violating anti-poaching laws long enforced in areas close to other countries but far (often more than a thousand kilometers) from China. If any of these old poaching laws are enforced on Chinese ships then China makes a big deal out of it and issues threats. It’s all very intimidating and it’s meant to be.