October 25, 2017: The 19th CCP (Chinese Communist Party) Congress ended on the 24th and, as expected, major changes were announced. Supreme leader Xi Jinping got another five year term, allowing him ten years in office. This has been the custom since 1982 when it was decided that a “collective leadership” was a good idea and supreme leaders should be serve for only two five year terms (or just one if there were problems.) Since 1982 this has worked but Xi Jinping wants more and is getting it. This time he put ineligible (too old and more loyal to Xi than able to take his place) men in the Politburo Standing Committee from which the next leader is selected. Xi did not designate a preferred successor.

The 19^th Party Congress also approved an addition to the “constitution” (CCP charter); “Xi Jinping Thought for the New Era of Socialism with Chinese Special Characteristics.” This is not unusual as the first CCP ruler of China, Mao Zedong, added his “Mao Zedong Thought” which defined the Chinese version of communism. This was different from the form popularized (and often imposed) by the Russians. The Maoist communism stressed the rural population, not the urban workers, as the key revolutionaries and that radical change was required to achieve the socialist paradise. Maoism in practice proved disastrous and killed 20-30 million Chinese, mainly from starvation, when imposed during the 1950s. To deal with the negative response to that Mao launched the Great Cultural Revolution in the early 1960s and while this phase only killed a few million it wrecked the economy and educational system. In the 1970s Mao died and those who sought to continue his work were killed or jailed and this led to Deng Xiaoping Theory being added to the charter in recognition of Deng Xiaoping who organized the economic reforms in China during the 1970s and 80s that brought back a market economy while leaving the CCP in power. This was a major innovation that modern communism defined as impossible. Deng also supported the “collective leadership” (no more “leader for life”) in an effort to create and sustain more efficient government in general. Deng practiced what he preached, retired when his ten year term ended in 1992 and died five years later died.

The CCP is still trying to figure out how to stay in power and avoid economic and political disaster. The problem is the corruption and poor government that became a major issue after Deng died. Xi Jinping represents the most popular (within the CCP) solution to that. Xi Jinping wants to become leader-for-life and justify this lifetime tenure by significantly reducing the corruption and mismanagement that is so common within the CCP and the Chinese government in general. To make this work CCP leaders have, since Deng died, turned to nationalism and a buildup of conventional military power to support territorial expansion. If nothing else this is popular and could eventually mean getting Taiwan back, imposing Chinese rule on the South China Sea while grabbing a few other bits of territory. This only works if China does not trigger a major war. Xi Jinping has convinced key members of the CCP to back him on this and that first became public in late 2016 when senior members of the CCP agreed to grant Xi Jinping a special title (translated as “core” or “core leader”) that made him equal to communist China founder Mao Zedong. No other Chinese leader since Mao has had that kind of power.

While Mao has become popular with many Chinese, those who lived through the 1960s see Mao as a major failure. That is what led to acceptance by the CCP of the economic reforms that have transformed China. Xi Jinping has, as expected, used this Mao-grade power to deal with the corruption that still persists in the senior ranks of the government and military. To demonstrate that as soon as Xi was declared a core leader the CCP Central Committee announced punishments for many senior party officials for corruption. Since then there have been an unprecedented number of senior officials being accused of or punished for corruption. One thing these corrupt officials had in common that was not publicized was their opposition to Xi Jinping’s political plans and ambitions.

Deng opposed life tenure for government and military officials as well as any thought of trying democracy (despite the success of that in Taiwan, Singapore and throughout East Asia). The Chinese aristocracy was overthrown in 1911 by Chinese seeking to try democracy and that was seen as a failure. The Chinese Republic of 2012 never survived decades of civil war and a Japanese invasion (part of World War II). By 1948 China had another emperor, in the form of CCP leader Mao Zedong and a new aristocracy that is trying to survive. Xi Jinping is following the traditional rules of Chinese politics (that survived Mao’s efforts to destroy) and being methodical and avoiding radical changes (like the Great Leap Forward, the Cultural Revolution or democracy). Most Chinese admire and respect that.

Despite the CCP victory over the Chinese Republic the communists did bring some democratic innovations with them. The Party Congress system was established in part to avoid radical moves that backfire. But since the first Congress was held in 1921 the situation has not been stable and Party Congress meetings were infrequent. Since the 1960s the CCP has met every five years to discuss and agree on who would get the top jobs for the next five years. This includes a new bunch of senior military commanders. It has become customary that, even before the Congress begins a lot of the changes have already been announced or leaked. There are always some issues yet to be reached on major policy matters and that was the case in 2017. Xi Jinping played by the rules and lined up support for his plan as well as testing some of his ideas first.

All this is a remnant of the old communist “five year plans” that laid down specific economic decisions as well. But increasingly since the 1980s the Chinese communists have let the economy pretty much run itself. There are still “five year plans” but they are largely political. The country has prospered mightily as a result. Since 2012 the rapidly growing middle class has fueled growing demands for less corruption and more democracy, or at least more efficient government. In 2007 the government talked a lot about democracy (locally, at least), but did little since. This time around there’s a lot of pressure to at least find a way to clean out the corruption and mismanagement. Many younger CCP members agree that major changes are in order but their elders are not so sure how to proceed. Meanwhile, opinion surveys show that most Chinese want less corruption and more accountability. Many Chinese see democracy as a way to get that accountability but Xi Jinping and most other senior officials do not. That attitude is to be expected from the current self-perpetuating communist government. Only one party, the Communist Party, is allowed and that has not worked out so well.

Xi Jinping has a solution that does not involve democracy but will succeed or fail on how effectively it imposed accountability and honesty on a CCP bureaucracy that is more concerned about getting rich any way they can. Xi Jinping, like Deng Xiaoping, is willing to tolerate some bad behavior if it produces a net benefit for China and its rulers. So far that has led to the prosecution of the more inept corrupt officials and at least encouraged local officials to do something about practices that lead to pollution, waste and abuse of power. Despite enormous efforts to censor the Internet bad news (of CCP misbehavior) still gets out and causes unrest.

Xi Jinping gained followers in the bureaucracy by demonstrating his appreciation of how important the loyalty (and effectiveness) of the military and national police was. Xi Jinping also pushed for greater emphasis on seeking new ways to use the Internet rather than just fear and seek to control it. Many Chinese admire the way the government has used Cyber Warfare and Internet based espionage to gain information (commercial, military and so on) that would otherwise be unavailable. To many Chinese, especially CCP members, this is admirable not criminal behavior.

Internet based crime is one thing, managing the economy is another matter. Many Chinese are aware that Japan was poised, in the popular imagination, to become a great power in the 1980s because its economic growth seemed unstoppable, until suddenly in the early 1990s it wasn’t. China is showing some of the same symptoms (falling birthrate, corruption and poor economic management) that ended the Japanese threat. The Japanese are still affluent but they have still not found a cure for their demographic problems. South Korea is suffering from a similar affliction as is Western Europe. The Chinese situation is worse because the CCP caused a lot of ecological and economic damage that would get fixed a lot sooner in a democracy. Xi Jinping is ignoring all that for the moment, but those problems, in the long run, will not ignore him.

Korea

North Korea has become more active with new smuggling and other illegal schemes to raise foreign currency. China knows this because, like most police states, the police have close (if not always cordial) connections with the criminal underground. The Chinese police have made it known that useful information on new North Korean scams would earn a larger rewards (including the prized “get out of jail free” one). Working with North Korea has long been profitable for Chinese gangsters in the northeast but now a lot of the usual methods no longer work and the North Koreans have been using riskier and less profitable scams to keep the foreign currency coming. Not all the Chinese gangs are getting in on this new stuff, often because the Chinese criminals (even the ethnic Korean ones) consider it too risky.

Since mid-September it has been openly admitted in northwest North Korea (especially North Pyongan Province) that the Chinese government has quietly but thoroughly shut down most of the known smuggling operations with North Korea. This is the area, (where the Yalu River reaches the sea) where most of that smuggling has taken place. Many of the Chinese actions involved physically blocking the beaches on the Chinese side of the Yalu River where North Korean smuggler boats had landed or taken on illegal cargo for decades. The bribes no longer worked and the Chinese appeared to have a lot of popular support on the Chinese side because most Chinese now regarded North Korea as dangerous to China.

Unlike North Korea China tolerates most of the chatter on the Internet and in the streets. Anyone can monitor this and news of Chinese middlemen that depended on (and grew rich from) this illegal trade were in big trouble became widely known. The latest North Korean nuclear and missile tests have caused Chinese public opinion towards North Korea to become even more hostile. According to opinion polls North Korea has, over the last few years, turned come to be seen by Chinese as a larger military threat to China than the U.S. or anyone else. To deal with this China has increased the number of troops and border police stationed near the North Korean border and conducted more military exercises close to the border. This also addresses another Chinese fear (that gets less publicity in China) that a government collapse in North Korea would send millions of desperate, and opportunistic, North Koreans into China. There is no way China or the Chinese living along the North Korean border would tolerate that. Meanwhile China is becoming more hostile to North Koreans no matter what their legal or economic status is. Part of that is because North Korea has become a very unpleasant place for Chinese to visit or do business in.

Big Brother Laboratory

In the northwest Xinjiang province has become a test site for all manner of new surveillance equipment and techniques. Ostensibly to deal with the Islamic terror threat among the local Moslems, the extreme surveillance efforts have worked and are being refined and showing up elsewhere in China. The latest development in Xinjiang is a new law that allows the police to require knives owned by Uighurs to have barcodes put on them so that if the knives are used for a terror attack (as has already happened several times) it would be easier to track down all of those involved with a particular attack. This rule is only be implemented in a few parts of Xinjiang, apparently as a test. Earlier the government ordered all non-Han Moslems to turn in all copies of the Koran and all prayer mats.

Most of these extreme security measures are mainly directed at Uighur, Kazakh and Kyrgyz Moslems. China is planning to introduce a new translation of the Koran for use in China. This version will apparently have pro-terrorism or anti-government passages removed and the indications are that the new version will be largely ignored by Chinese Moslems. In response to that government censors are also blocking access to online versions of the Koran and arresting Islamic clerics who offer Koran lessons online. In some parts of the province the government has banned the use of local languages (mainly Turkic ones like Uighur and Kazakh) for use in schools.

China has become obsessed about suppressing any Islamic terrorism based in China. The reports from Iraq indicate that this has been successful so far, which was why so many Chinese Moslems showed up among the ISIL (Islamic State in Iraq and the Levant) dead and captured in Iraq. But it was also revealed that many of those Chinese Moslems who had survived the collapse of the Islamic state in Iraq and Syria were planning on going back to China and establish Islamic terrorist groups there. Because of that China has increased scrutiny on Chinese Moslems returning from abroad and imposing more restrictions on where they can travel to when they do leave the country.

The government has also increased Internet security, scrutiny and censorship in Xinjiang in particular and throughout China in general against anyone who tries to discuss Islam online. The government of has hired thousands of new police (Han Chinese only) a month for the last year and installed more surveillance cameras throughout the province, particularly in urban areas. Han Chinese man these surveillance systems. China has been testing new software on these surveillance cameras, including several types of facial recognition software and other software that spots those acting suspiciously based on what style of movement is the norm, or not, in a particular area.

China is also testing new “re-education” techniques for those it identifies as having pro-Islamic terrorist attitudes. This sort of behavior modification is often described as “brainwashing” in the West but it often works, especially if it is attuned to the cultural norms of the subject.

South China Sea

China appears to have succeeded in buying cooperation from the Philippines. The Filipino government is willing to accept all the legal gifts (aid, investment, loans) China offers in return for not resisting Chinese claims in the South China Sea. Filipino president Duterte pointed out earlier in 2017 that China threatened war if the Philippines went ahead with plans to drill for oil in offshore areas that international law recognizes as Filipino but that China claims actually belongs to them. Duterte openly criticizes other nations for not confronting China and sees no point in the Philippines trying to take on China by itself. All the South China Sea nations facing territorial losses because of Chinese claims have backed down. He points out that even the United States is unwilling to go up against China. Meanwhile the Chinese are openly moving more weapons to bases in the South China Sea as well as their main naval base in southern China (Hainan Island). When pressed a few Chinese officials would admit that in recent talks between Duterte and Chinese leaders it was mentioned that war was a possibility if other nations sought to take possession of Chinese territory. In other words (that non-Chinese can understand); back off or die. In practical terms that means Chinese fishing boats get away with poaching (fishing in waters international law recognizes as Filipino) because China tends to send armed coast guard ships to escort the poachers and force local naval forces to either open fire (and risk a major retaliation by China) or back off. Filipino naval and coast guard boats back off. But if the poachers are not Chinese they will get arrested or even fired on. This is causing some friction with neighbors like Vietnam, which not too long ago considered themselves allies of the Philippines in the effort to get the Chinese out of the South China Sea.

In the Philippines leaked documents revealed the discussions between China and the Philippines and the degree to which China is demanding that the Philippines surrender control, and even access to, much of the waters off the west coast of the Philippines. While the Chinese see this continued resistance by many Filipinos as something that can be fixed by increasing the goodies offered and threats made, most Filipinos see China as yet another conqueror, not much different from the Spanish or the Japanese. The Americans threw the Spanish out in 1898 but soon agreed to get out themselves and did so right after World War II, a year late because of the Japanese occupation. The Filipinos remember that and are certain that the Chinese would behave much like the Japanese (as in brutally and with no intention to leave voluntarily).

India

The Chinese construction work on the new Pakistani Gwadar port facilities is visible to anyone on the ground or flying by and it was recently noticed that some features of the new port and airport facilities are clearly intended for military use. India has long accused China (despite denials) was going to use Gwadar as a base for Chinese warships and naval aircraft. Pakistan never had a problem with Chinese warships using Gwadar as it helps keep local troublemakers out. Pakistan has assured China that there would be no terrorist violence against Chinese working on upgrading the port of Gwadar and land links north to China. Pakistan is willing to pay a high price to get CPEC (China-Pakistan Economic Corridor) done because it means Pakistan has an ally against Iran and even Western powers that might have some violent disagreement with Pakistan. Best of all China is picking up most of the $55 billion cost. Earlier this year China and Pakistan finally signed the agreement that grants China a 40 year lease on new facilities China is building in the southwestern port of Gwadar. The lease grants China most (over 80 percent) of the revenue brought in by port and free trade zone operations. Gwadar is a key part of CPEC.

October 19, 2017: The government revealed that a number of high-profile arrests for corruption recently turned out to also involve a plot to overthrow Chinese president Xi Jinping and seize power. The alleged plotters (Bo Xilai, Zhou Yongkang, Ling Jihua, Xu Caihou, Guo Boxiong and Sun Zhengcai) were all senior officials seen as opposed to Xi Jinping for various reasons, including fears that Xi Jinping was maneuvering to have himself declared “president-for-life”.

October 18, 2017: The 19th Party Congress began and ended on the 24th. Very quick and efficient.

October 13, 2017: The Americans announced that it will not continue to support the 2015 treaty that lifted sanctions on Iran because Iran is not keeping its end of the deal. The U.S. has some political support in the other countries (China, France, Germany, Russia and Britain) that signed the deal but China and Russia still back the treaty and all five of those countries have already sold Iran billions of dollars’ worth of goods and services and are reluctant to give that up just because Iran is cheating a bit. Russia was particularly critical of the United States for not being a team player and trying to wreck an international agreement.

October 12, 2017: China has warned some (at least ten) South Koreans working near the North Korean border that there is risk of Chinese or North Korean criminals kidnapping South Korea citizens and taking them to North Korea to be ransomed (for cash or South Korea government concessions). Kidnappings by North Korea agents have been increasing but the targets are usually other North Koreans. China believe this program is being expanded as a reaction to the stricter enforcement of sanctions by China. At least five vulnerable (prominent or wealthy) South Koreans are known to have left. North Korea has kidnapped about 500 South Koreans since 1953. Some were taken in South Korea but most of these kidnappings take place outside of Korea.

October 11, 2017: China reported that its trade with North Korea had, in September, declined for the seventh straight month. In September North Korean exports to China were down 38 percent (compared to September 2016) while North Korean imports from China were down 6.7 percent. There is less precise data on illegal trade, which has always existed. China has tried to crack down on that but some of it is still going on. That is obvious from the continued presence of North Korean seafood (long a delicacy in China) in Chinese markets. But a lot of the more obvious smuggling efforts have been shut down and China has been quick to go after new scams. For example the North Korean Army was spotted operating a smuggling operation in a remote portion of the China-North Korea border and it was shut down. But even with the additional troops China has brought in to guard the border, and a Chinese population near the border quick to report an activity that might be North Korean, there is still some movement of goods in (mainly) and out of North Korea. This is known because South Korea, the United States and Japan have naval and intelligence resources in the region that can detect continued trade and now it is documented (if possible) and publicized since the Chinese and Russian government have both agreed to act on any violations of sanctions. This is having an impact because a growing number of Chinese smuggling partners have been arrested in China or quietly stopped dealing with the North Koreans. That means North Korea has to pay more to the few remaining Chinese smugglers and some of those Chinese are willing to take the risk for a big payday. The U.S. has suggested shutting down the North Korean fleet of cargo ships that frequently mix smuggling with legitimate work. There is less and less for these ships to carry legally, and then there is the growing number of cargo ships and tankers North Korea secretly owns or operates. So far there is not enough support for taking down the smuggling fleet but it remains an option.

October 10, 2017: An American warship (the destroyer USS Chafee) carried out a FONOP (freedom of navigation operation) in the South China Sea and China protested, as well as sending out a destroyer and two J-11B fighters to “escort” the American warship (some Chinese media described it as “chasing the Americans away). The last such FONOP was in August when the USS McCain passed through areas China asserts illegal control over. The problem is that international law does not recognize this Chinese claims and the Chinese make it clear they do not care what the rest of the world thinks. Chinese media report these FONOPs as a violation of international law and most now trigger a response by Chinese warships or warplanes. In reality China rarely opposes the American warships. These exercises are meant to affirm that many of the Chinese claims to the entire South China Sea are invalid and that the right to free passage through China’s EEZ is assured.

Despite Chinese economic pressure on South Korea (over South Korean missile defenses) China renewed a three year deal that guarantees three years of currency swaps (the two governments allowing businesses to exchange Chinese yuan for South Korean won) worth up to $56 billion. This encourages trade between the two countries and despite Chinese economic pressure on South Korea over the last year it was believed China would renew the deal because China is pushing the yuan as a new “international currency” (as the dollar, euro and yen have been) and needs major local economies like South Korea. The swap agreements began in 2009 as Chinese-South Korea trade was sharply rising. China is still visibly angry at South Korea, fearing the growing military power of South Korea and the recent installation of a THAAD anti-missile battery despite vigorous Chinese diplomatic and economic efforts to prevent that. The diplomatic and economic pressure continues but the South Koreans are in no mood to back off as long as the North Korean threat remains.

October 9, 2017: China launched a second remote sensing space satellite (VRSS-2) for Venezuela. The first one (VRSS-1) was put into orbit in September 2012. China builds its own remote sensing satellites and has put many in orbit. This satellites typically operate at an altitude of 600 kilometers (more or less) can be used for scientific exploration and surveillance or for military purposes. Equipped with either radar (SAR or synthetic aperture radar) or digital cameras, remote sensing satellites are often used to scan the ocean for ships. A typical SAR can produce photo quality images at different resolutions. At medium resolution (3 meters) the radar covers an area 40x40 kilometers. Low resolution (20 meters) covers 100x100 kilometers. Venezuela can quietly rent out its remote sensing satellites to anyone, but outlaws like drug cartels or nations up to illegal mischief would pay a premium to use the Venezuelan satellites for keeping track of their foes (the DEA, coast guard, warships in general) or for planning violence or whatever.

Since 2012 China has become a major supplier of weapons, vehicles and other equipment for Venezuelan national police and that gear has been very visible lately as the government has had to deal, often violently, with large anti-government demonstrations. China considers this good advertising for their police products, which they will sell to anyone who can pay.

October 5, 2017: The Philippines received another gift of weapons from China. This time it was 3,000 assault rifles plus three million rounds of ammo and 90 sniper scopes for the sniper rifles donated in June (along with 3,000 CQ-A5 assault rifles, five million rounds of 5.56mm ammo , 80 CS-LR4 7.62mm sniper rifles(and 800,000 rounds of ammo for them). The June donation was valued at $7.3 million while the one today is worth about the same. This shipment of assault rifles is going to the national police. With less fanfare China is selling the Philippines ships, trucks and other equipment that can be used by the military.

October 1, 2017: In the south (Tibet) a new 409 kilometer highway from the provincial capital to the Indian border and Arunachal Pradesh, an Indian state that China belongs to Tibet and thus China. Both countries have been building up their forces along this border. West of Arunachal Pradesh India notes that China still has an above average number of troops in Chumbi Valley, from which China launched a June incursion into Indian territory on the Doklam plateau. This confrontation was settled in late August. The two nations blamed each other for this confrontation in a very inhospitable part of the world. The Doklam plateau is where the Tibet border meets India’s Sikkim State. China is also building new roads to this part of the Tibet/India border.

In the northeast China began enforcing the new UN sanctions on oil exports to North Korea. This reduces the amount of petroleum products allowed in by about a third. At the same time China is severely restricting smuggling so that the actual cut in petroleum products to North Korea is now down by about half. In response fuel and heating oil prices are rising. The North Korea government is allowing their entrepreneurs to try and fix this problem by rapidly building crude facilities for converting coal (which North Korea still has plenty of) to petroleum products.

September 30, 2017: The Mali military has received four new aircraft this month. Two of these were Chinese Y-12 transports. The Y-12 is a 5.3 ton twin turbo-prop aircraft that has a crew of two and carries up to 17 passengers or 1.5 tons of cargo. Cruising speed is 250 kilometers an hour and normal endurance is about five hours.

September 28, 2017: China has ordered North Korean companies operating in China to shut down within 120 days.

The Philippines revealed that it is negotiating with a Chinese oil company to jointly explore for oil in Filipino waters that China claims. China had recently threatened to attack any Filipino oil exploration efforts in this area and the Philippines backed off. The new offer is about the two countries sharing any oil found in what used to be Filipino waters.