Chinese Military,Political and Social Superthread

[a_majoor]

This is interesting with respect to culture. Large numbers of Christianizing Chinese in a "conservative", Confucian society may certainly make the Party nervous, but what are the real changes that are going to happen? I have been looking at a similar situation happening in the ROK, evangelical Christianity is apparently growing by leaps and bounds there, but I haven't seen much evidence of societal change based on my readings (OK, maybe I am reading the wrong things...).

In a similar vein, I have also seen articles describing the growth of Pentecostalism in Europe and even the growth of conservative Christianity in America (churchgoers considering that their American pastors are too "Liberal" and applying to come under the Archdiocese of Manilla, for example). On the surface, this seems rather odd (aggressive growth of fundamentalist or conservative Christian denominations in a secular or unwelcomoing environment), but I haven yet to see any great societal changes emerging from these trends:

http://www.telegraph.co.uk/news/worldnews/asia/china/10776023/China-on-course-to-become-worlds-most-Christian-nation-within-15-years.html

China on course to become 'world's most Christian nation' within 15 years
The number of Christians in Communist China is growing so steadily that it by 2030 it could have more churchgoers than America

By Tom Phillips, Liushi, Zhejiang province2:00PM BST 19 Apr 2014 Comments1823 Comments

It is said to be China's biggest church and on Easter Sunday thousands of worshippers will flock to this Asian mega-temple to pledge their allegiance – not to the Communist Party, but to the Cross.

The 5,000-capacity Liushi church, which boasts more than twice as many seats as Westminster Abbey and a 206ft crucifix that can be seen for miles around, opened last year with one theologian declaring it a "miracle that such a small town was able to build such a grand church".
The £8 million building is also one of the most visible symbols of Communist China's breakneck conversion as it evolves into one of the largest Christian congregations on earth.

"It is a wonderful thing to be a follower of Jesus Christ. It gives us great confidence," beamed Jin Hongxin, a 40-year-old visitor who was admiring the golden cross above Liushi's altar in the lead up to Holy Week.

"If everyone in China believed in Jesus then we would have no more need for police stations. There would be no more bad people and therefore no more crime," she added.

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Officially, the People's Republic of China is an atheist country but that is changing fast as many of its 1.3 billion citizens seek meaning and spiritual comfort that neither communism nor capitalism seem to have supplied.

Christian congregations in particular have skyrocketed since churches began reopening when Chairman Mao's death in 1976 signalled the end of the Cultural Revolution.

Less than four decades later, some believe China is now poised to become not just the world's number one economy but also its most numerous Christian nation.

"By my calculations China is destined to become the largest Christian country in the world very soon," said Fenggang Yang, a professor of sociology at Purdue University and author of Religion in China: Survival and Revival under Communist Rule.
"It is going to be less than a generation. Not many people are prepared for this dramatic change."

China's Protestant community, which had just one million members in 1949, has already overtaken those of countries more commonly associated with an evangelical boom. In 2010 there were more than 58 million Protestants in China compared to 40 million in Brazil and 36 million in South Africa, according to the Pew Research Centre's Forum on Religion and Public Life.

Prof Yang, a leading expert on religion in China, believes that number will swell to around 160 million by 2025. That would likely put China ahead even of the United States, which had around 159 million Protestants in 2010 but whose congregations are in decline.

By 2030, China's total Christian population, including Catholics, would exceed 247 million, placing it above Mexico, Brazil and the United States as the largest Christian congregation in the world, he predicted.

"Mao thought he could eliminate religion. He thought he had accomplished this," Prof Yang said. "It's ironic – they didn't. They actually failed completely."

Like many Chinese churches, the church in the town of Liushi, 200 miles south of Shanghai in Zhejiang province, has had a turbulent history.
It was founded in 1886 after William Edward Soothill, a Yorkshire-born missionary and future Oxford University professor, began evangelising local communities.

But by the late 1950s, as the region was engulfed by Mao's violent anti-Christian campaigns, it was forced to close.
Liushi remained shut throughout the decade of the Cultural Revolution that began in 1966, as places of worship were destroyed across the country.
Since it reopened in 1978 its congregation has gone from strength to strength as part of China's officially sanctioned Christian church – along with thousands of others that have accepted Communist Party oversight in return for being allowed to worship.

Today it has 2,600 regular churchgoers and holds up to 70 baptisms each year, according to Shi Xiaoli, its 27-year-old preacher. The parish's revival reached a crescendo last year with the opening of its new 1,500ft mega-church, reputedly the biggest in mainland China.
"Our old church was small and hard to find," said Ms Shi. "There wasn't room in the old building for all the followers, especially at Christmas and at Easter. The new one is big and eye-catching."

The Liushi church is not alone. From Yunnan province in China's balmy southwest to Liaoning in its industrial northeast, congregations are booming and more Chinese are thought to attend Sunday services each week than do Christians across the whole of Europe.
A recent study found that online searches for the words "Christian Congregation" and "Jesus" far outnumbered those for "The Communist Party" and "Xi Jinping", China's president.

Among China's Protestants are also many millions who worship at illegal underground "house churches", which hold unsupervised services – often in people's homes – in an attempt to evade the prying eyes of the Communist Party.

Such churches are mostly behind China's embryonic missionary movement – a reversal of roles after the country was for centuries the target of foreign missionaries. Now it is starting to send its own missionaries abroad, notably into North Korea, in search of souls.

"We want to help and it is easier for us than for British, South Korean or American missionaries," said one underground church leader in north China who asked not to be named.

The new spread of Christianity has the Communist Party scratching its head.
"The child suddenly grew up and the parents don't know how to deal with the adult," the preacher, who is from China's illegal house-church movement, said.

Some officials argue that religious groups can provide social services the government cannot, while simultaneously helping reverse a growing moral crisis in a land where cash, not Communism, has now become king.

They appear to agree with David Cameron, the British prime minister, who said last week that Christianity could help boost Britain's "spiritual, physical and moral" state.

Ms Shi, Liushi's preacher, who is careful to describe her church as "patriotic", said: "We have two motivations: one is our gospel mission and the other is serving society. Christianity can also play a role in maintaining peace and stability in society. Without God, people can do as they please."
Yet others within China's leadership worry about how the religious landscape might shape its political future, and its possible impact on the Communist Party's grip on power, despite the clause in the country's 1982 constitution that guarantees citizens the right to engage in "normal religious activities".
As a result, a close watch is still kept on churchgoers, and preachers are routinely monitored to ensure their sermons do not diverge from what the Party considers acceptable.

In Liushi church a closed circuit television camera hangs from the ceiling, directly in front of the lectern.

"They want the pastor to preach in a Communist way. They want to train people to practice in a Communist way," said the house-church preacher, who said state churches often shunned potentially subversive sections of the Bible. The Old Testament book in which the exiled Daniel refuses to obey orders to worship the king rather than his own god is seen as "very dangerous", the preacher added.

Such fears may not be entirely unwarranted. Christians' growing power was on show earlier this month when thousands flocked to defend a church in Wenzhou, a city known as the "Jerusalem of the East", after government threats to demolish it. Faced with the congregation's very public show of resistance, officials appear to have backed away from their plans, negotiating a compromise with church leaders.

"They do not trust the church, but they have to tolerate or accept it because the growth is there," said the church leader. "The number of Christians is growing – they cannot fight it. They do not want the 70 million Christians to be their enemy."
The underground leader church leader said many government officials viewed religion as "a sickness" that needed curing, and Prof Yang agreed there was a potential threat.

The Communist Party was "still not sure if Christianity would become an opposition political force" and feared it could be used by "Western forces to overthrow the Communist political system", he said.

Churches were likely to face an increasingly "intense" struggle over coming decade as the Communist Party sought to stifle Christianity's rise, he predicted.

"There are people in the government who are trying to control the church. I think they are making the last attempt to do that."

 

[dimsum]

This is interesting with respect to culture. Large numbers of Christianizing Chinese in a "conservative", Confucian society may certainly make the Party nervous, but what are the real changes that are going to happen? I have been looking at a similar situation happening in the ROK, evangelical Christianity is apparently growing by leaps and bounds there, but I haven't seen much evidence of societal change based on my readings (OK, maybe I am reading the wrong things).

I don't think many cultural changes will happen at all in China in the short term, and *perhaps* a few in the long term.  Religion, especially in the recent past, is not ingrained into the culture to the same extent that it is in, say, the US and even if it was, historically Chinese culture has generally been religiously tolerant. 

I would speculate that part of the reason why East Asian cultures, for example, can separate religion from culture more easily is due to the fact that strictly speaking, Confucianism isn't really a religion but a code of practices/expectations that slowly built up a religious aspect around it.  Also, East Asian societies are more homogenous than most Western societies, therefore requiring one less thing (in this case religion) that's needed to form a cultural identity. 

 

[Edward Campbell]

I agree with Dimsum: China has many religions and quasi-religions, like Confucianism which, while not a religion, per se has temples, etc, (even Taoism is divided into religious and ethical streams and many professed Taoists have separate pantheons of the traditional Chinese gods.

But Christians, like Muslims, are, already, in some trouble because of their refusal to "render unto Caesar" the loyalty that the CCP requires, despite the biblical injunction to do so. Additionally, Christianity, like Islam, (and even some Buddhist sects) is a proselytizing religion and my impression is that this practice, while evidently successful, grates on both ordinary Chinese people and, especially, on the government which remains, on principle, committed to "freedom from religion."

Christians may become a large force in society but I expect it to be a half quarter mile wide (relative to China's population) and a quarter inch deep (relative to China's culture).

 

[CougarKing]

Thucydides and all,

All of you do realize that there's a difference between the Christian churches allowed to practice openly in mainland China and the underground churches?

For example, the officially state-sanctioned Catholic church in China, who hold masses in places such as Beijing's South Cathedral, are allowed to practice openly because its clergy are supposed to ensure that their folk don't put God above the state when it comes to final loyalty.

This practice openly conflicts with the Vatican, so thus these PRC-regulated clergy are not recognized or have a connection with the Vatican/Rome.

In contrast, there is an underground Catholic church compose of clergy who do have ties with the Vatican/Rome and the Catholics in the rest of the world. When I did an exchange semester one of the universities in China nearly a decade ago, some of our professors were Jesuit priests who did not come in their official capacity. Some had a business background or an economics background, and thus were registered by the state as professors in this field. However, this did not prevent them from practicing in secret among the Catholics in the program.

I also recall that this bone of contention between Beijing and the Vatican also meant that the Vatican recognize the regime in Taipei, Taiwan as the "One China" as opposed to the mainland.

I assume this practice extends to other Christian (Protestant) sects as well, such as Baptists and the Eastern Orthodox church, etc.


---------------------------------------------------------

Anyways, here's another update about Japan's wartime past in China coming back to haunt Tokyo:

Japan warns over China ship seizure
By Kyoko Hasegawa
AFP News - 43 minutes ago

Tokyo warned Monday that the seizure of a Japanese ship in Shanghai over pre-war debts threatened ties with China and could undermine the very basis of their diplomatic relationship.

Authorities in Shanghai seized the large freight vessel in a dispute over what the Chinese side says are unpaid bills relating to the 1930s, when Japan occupied large swathes of China.

Reports said that in 1936, Mitsui's predecessor Daido Shipping Co. rented two ships on a one-year contract from Zhongwei Shipping Co.

However, the ships were commandeered by the Imperial Japanese Navy and were sunk during World War II, reports said.
A compensation suit was brought against Mitsui by the descendants of the founder of Zhongwei Shipping, and in 2007 a Shanghai court ordered Mitsui to pay about 2.9 billion yen in compensation.

Mitsui appealed against the decision but in December 2010 the Supreme People's Court turned down their petition for the case to be retried.

Mitsui has argued that it is not liable to pay compensation given that the ships which Daido rented were requisitioned by the Japanese military during the war, according to Japan's Kyodo News.

On Monday Japan's chief government spokesman Yoshihide Suga said the seizure undermined the 1972 joint communique that normalised ties between Japan and China, in which Beijing agreed to renounce "its demand for war reparation from Japan".

"It could also intimidate Japanese companies doing business in China as a whole and hence Japan is deeply worried and strongly expects China to take appropriate measures," he said.

(...EDITED)


AFP / Yahoo

 

[a_majoor]

The discussion about religion is illuminating, and I will certainly keep an eye on this story to see how it develops.

WRT official and unofficial churches, the article is pretty clear on this, especially Protestant "House Churches" which move from place to place to escape State surveillance. This is probably where the issue lies for the Party, since they are not conforming to the rules established by the Party and are potential nexus for dissent and opposition (although in real terms I don't really see that from the Christian churches. OTOH since the Islamic peoples in Xīnjiāng and Buddhists in Tibet do form an active opposition to Chinese rule there is no reason for the Party to think the Christians will be any different...).

 

[dimsum]

The discussion about religion is illuminating, and I will certainly keep an eye on this story to see how it develops.

WRT official and unofficial churches, the article is pretty clear on this, especially Protestant "House Churches" which move from place to place to escape State surveillance. This is probably where the issue lies for the Party, since they are not conforming to the rules established by the Party and are potential nexus for dissent and opposition (although in real terms I don't really see that from the Christian churches. OTOH since the Islamic peoples in Xīnjiāng and Buddhists in Tibet do form an active opposition to Chinese rule there is no reason for the Party to think the Christians will be any different...).

I think you may be misreading/confusing the issue there.  The Tibetans, Uyghurs, etc. in Xinjiang are not ethnically Han Chinese, which are the vast majority of the Chinese population and are what one usually refers to when they speak of Chinese people, but more closely related to Turkic/SW Asian groups such as Uzbeks, Tajiks and northern Afghans.  Officially, there are 56 or so "minority groups" aside from the Hans in China.

So, the active opposition from those groups isn't really based on religion but more due to culture (the CCP oppressing the minority culture, that is) and the politically-led migration of Han Chinese into those areas.  Once the Han Chinese population there becomes a majority, they take power with predictable results.

 

[CougarKing]

Dear China, brace yourself....

'China's Warren Buffett' Selling Off His China Assets

Quote:

On the 8th of this month, Pacific Century Premium Developments and PCCW announced they had signed an agreement to sell Pacific Century Place. The disposal of a landmark project in the center of Beijing - two office buildings, two blocks of serviced apartments, and a mall—confirmed that Li Ka-shing and son Richard have turned bearish on Chinese real estate.

Li, reputed to be the richest man in Asia, and his family have been on a selling spree in Mainland China since last August. During that time, "Superman," his nickname because of an almost-infallible sense of market timing, has unloaded Guangzhou's Metropolitan Plaza, Shanghai's Oriental Financial Center, and Nanjing's International Financial Center. With Richard's disposal of Beijing's Pacific Century Place, the Li family has reportedly sold about $2.9 billion of Chinese property in less than a year.

(....EDITED/SNIPPED)

Yet Li, No. 20 on last month's Forbes rich list with a fortune of $31.0 billion, is selling in China and not buying. And it looks like he is leaving not a moment too soon. Dongfang Daily, a Chinese paper, quotes an unnamed "industry insider" who tells us Superman "will always sell his assets two to three years ahead of crises."

(....EDITED/SNIPPED)

Now that Li is moving out of major China developments, others will probably take the hint. "Why would you buy anything when Li Ka-shing is selling?" asks Euromoney. The magazine posed the question in connection with Li dumping assets in his home base, Hong Kong. There, he has gone on another "de-risking" binge, with among other things, an initial public offering of Power Assets Holdings , a sale of a 24.95% interest in retailer AS Watson, and a disposal of a 60% stake in Terminal 8 West in the Kwai Tsing container port, all this year. Li also tried to offload supermarket chain ParknShop last year, but the effort failed.

....

That's why Simon Black, an investor and entrepreneur, looks correct. "Li wants out of China," he writes. "All of it." Superman's sudden move out of Chinese property has been termed an "evacuation," and it looks like he hopes to get out of the rest of his Chinese investments too. Li, for instance, has been progressively selling"his stock in ChangYuan Group, a Shanghai-listed electronics manufacturer based in Guangdong province. When viewed in connection with his Mainland China and Hong Kong disposals, this move looks part of a relentless trend.

The Chinese themselves see special significance in Superman's sales. Wang Shi, chairman of China Vanke , China's largest home builder, says the sell-off of "the smart Mr. Li" is a warning. Critic Luo Zhiyuan said the sales imply "the coming of a crisis."

We should probably take our cue from the man called "the Warren Buffett of China." After all, the Chinese Buffett is unloading his China assets.

the source for the above article:

Forbes

 

[Edward Campbell]

China has manifold problems, some serious, some normal for any national economy, but of them all I would put one at the very top of the list: water.

Look at this graphic:

Source: http://greenleapforward.com/2010/01/06/charting-chinas-water-future/

Now, look at this article.

Not only does China have a supply problem, the water is does have is of poor quality.

Several billions of US dollars can and will improve the latter situation but supply will remain problematical.

There is new, fresh water is Est Asia without significant demand ... but it is all North of China.

 

[CougarKing]

Speaking of offshore bases or friendly ports, Pakistan's Gwadar port, where China was already given special status, if I can recall correctly, comes to mind.

Reuters

Search for MH370 reveals a military vulnerability for China

By Greg Torode and Michael Martina

HONG KONG/BEIJING (Reuters) - When Chinese naval supply vessel Qiandaohu entered Australia's Albany Port this month to replenish Chinese warships helping search for a missing Malaysian airliner, it highlighted a strategic headache for Beijing - its lack of offshore bases and friendly ports to call on.

China's deployment for the search - 18 warships, smaller coastguard vessels, a civilian cargo ship and an Antarctic icebreaker - has stretched the supply lines and logistics of its rapidly expanding navy, Chinese analysts and regional military attaches say.

China's naval planners know they will have to fill this strategic gap to meet Beijing's desire for a fully operational blue-water navy by 2050 - especially if access around Southeast Asia or beyond is needed in times of tension.

China is determined to eventually challenge Washington's traditional naval dominance across the Asia Pacific and is keen to be able to protect its own strategic interests across the Indian Ocean and Middle East.

"As China's military presence and projection increases, it will want to have these kind of (port) arrangements in place, just as the U.S. does," said Ian Storey, a regional security expert at Singapore's Institute of South East Asian Studies.

"I am a bit surprised that there is no sign that they even started discussions about long-term access. If visits happen now they happen on an ad-hoc commercial basis. It is a glaring hole."

(...EDITED)

 

[CougarKing]

An update on the situation with an earlier post about that Japanese freighter seized by Chinese authorities over wartime reparations from the WW2 era:

Japan's Mitsui pays China to release seized ship-court
Reuters
April 24, 2014 12:53 AM


BEIJING/TOKYO (Reuters) - Japan's Mitsui O.S.K. Lines Ltd paid about $29 million for the release of a ship seized by China over a dispute that dates back to the 1930s war between the countries, China's Supreme Court said on Thursday.

The Chinese government has described the case as a simple business dispute unrelated to wartime compensation claims, but it has become a cause célèbre for activists in China seeking redress from Japan.

Mitsui paid about 2.92 billion yen ($28.5 million) in leasing fees, including interest and damages, China's Supreme Court said, in a statement on its official microblog. Mitsui also paid 2.4 million yuan ($385,000) in legal fees, the court said.

Japanese media had earlier reported Mitsui paid about 4 billion yen ($39 million) to free the "Baosteel Emotion", a 226,434 deadweight-tonne ore carrier.

(...EDITED)

Reuters / Yahoo

 

[CougarKing]

Clearly the threat posed by mainland China's new aircraft carrier is always on the minds of Taipei's government leaders:

Taiwan to Simulate Chinese Carrier Attack in Upcoming Training Exercise

By: Sam LaGrone
April 25, 2014

The Taiwanese military will train to repel an attack from China's Liaoning aircraft carrier and its battle group as part of a planned May exercise, according to local press reports.

The simulated sea assault from the Liaoning battle group will be part of Taiwan's large scale Han Kuang military exercise which will simulate a full scale war against the island country.

(...EDITED)

The exercise is also set to feature Taiwan’s recently acquired U.S.-built AH-64E Apache, P-3C Orion anti-submarine aircraft and the indigenous Thunderbolt-2000 rocket artillery platform.

source: US Naval Institute 

 

[Edward Campbell]

Here, reproduced under the Fair Dealing provisions of the Copyright Act from Amazing Maps is an interesting infographic that illustrates how tightly China is tied into the global trading system and why it has no interest in upsetting the apple cart:

Source: https://twitter.com/Amazing_Maps

 

[Edward Campbell]

According to Xinhua, Paramount Leader Xi Jinping is taking a new, harder line on terrorism and separatism, which will, I suspect mean more severe crackdowns on the Uyghurs and, probably, on the Tibetans, too. Here, reproduced under the Fair Dealing provisions of the Copyright Act from Xinhua is the story:

http://news.xinhuanet.com/english/china/2014-04/26/c_133292245.htm

President Xi vows intense pressure on terrorism

English.news.cn

2014-04-26

Editor: An

BEIJING, April 26 (Xinhua) -- Chinese President Xi Jinping has pledged to resolutely crack down on terrorism and secessionism with high intensity to safeguard national security.

Xi made the remarks on Friday at the 14th group study session on national security and social stability by the Political Bureau of the Communist Party of China Central Committee.

Calling terrorism the common enemy of the people, Xi urged improving counter-terrorism systems and abilities and the public to build a "wall of bronze and iron" to fight against terrorism.

"(We must) make terrorists become like rats scurrying across a street, with everybody shouting 'beat them!'" Xi said.

Resolute and decisive measures must be taken and high pressure must be maintained to crack down on violent terrorists who have been swollen with arrogance, he said.

Violent terrorists ignore basic human rights, trample humanism and justice and challenge the bottom-line of human civilization, Xi said.

It is neither an issue of nationality nor one of religion, but the common enemy of people of all nationalities, he said.

Xi also emphasized the fight against secessionism and promotion of ethnic unity and common prosperity.

He called on a resolute strike on secession, infiltration and sabotage by hostile forces within and outside China.

Xi urged all regions and departments to shoulder responsibilities and cooperate to maintain national security and social stability which are "extremely urgent" for deepening reforms and realizing the Chinese dream of national rejuvenation.

While China has managed to remain stable in providing a sound environment for reforms and opening-up, threats and challenges to the country's national security and social stability are increasing and reinforcing each other, he warned.

We must keep a clear mind and effectively prevent, manage and settle these security risks, he said.

To implement the overall national security outlook, China must attach importance to both external and internal security, homeland security and the safety of its people as well as traditional and non-traditional security, he said.

China must pay attention to both development and security, as well as its own security and common security, he added.

To safeguard national security, China must promote development in a more comprehensive, coordinated and sustainable way and improve people's livelihood so as to eliminate sources of social conflicts, Xi said.

He also called on perfecting systems to protect people's legal rights and the rule of law so that social conflicts can be settled through legal means effectively.

     

 

[Edward Campbell]

Here, reproduced under the Fair Dealing provisions of the Copyright Act from the Financial Times is an analysis by Prasenjit Basu* with which I, broadly, agree:

http://www.ft.com/intl/cms/s/0/f627e162-cc96-11e3-ab99-00144feabdc0.html?siteedition=intl#axzz3073VOHKJ

China’s crisis is coming – the only question is how big it will be
The longer the economy stays unbalanced, the worse the outcome will be

By Prasenjit Basu

April 27, 2014

A financial crisis in China has become inevitable. If it happens soon, its effects can be contained. But, if policy makers use further doses of stimulus to postpone the day of reckoning, a severe collapse will become unavoidable within a few years.

The country is in the middle of by far the largest monetary expansion in history. On one widely used measure, M2, its money supply has tripled in the past six years, an expansion four times as large as that of the US over the same period.

This unprecedented expansion is at least partly responsible for China’s extraordinary growth rate, which is now running up against a demographic constraint. Last year, for the first time, the working-age population declined, a trend set to continue for the next two decades. Unless the country can keep lifting the labour force participation rate (for example by getting more women into the workforce or persuading older people not to retire), China will struggle to expand its labour force by even 1 per cent per year. To sustain economic growth of more than 7 per cent, productivity would need to grow by 6-7 per cent a year across the entire economy. This would be a tall order in any country. In China, where the labour-intensive services and agriculture sectors make up half the economy, it is well-nigh impossible.

The country suffers from excess capacity in most industrial sectors. Yet investment in fixed assets continues to grow at double-digit rates. The steel sector is a case in point. China has about 1bn tonnes of annual steel-production capacity; about a third of it sits idle. Consequently, the growth statistics present a misleading figure. Output is being produced, sometimes even in the absence of any demand. A continuing burst of credit is needed to help fuel new capital spending to keep the factories busy – but that only adds to the stock of unused capital. It is a similar story with property investment. China is brimming with high-quality housing that is unaffordable. Sharp price declines are needed to clear the market. That will involve severe pain for banks that participated in the monetary expansion.

Observers often cite China’s closed capital account as a blessing that will stave off capital flight. But one consequence is a huge and persistent balance of payments surplus. Foreign money flows into the country to pay for exported goods and investment, and much less flows back out since there are few legal avenues for exit. China’s surplus over the past 10 years has been far larger than Japan’s was in the 1980s – the years when its disastrous asset price bubble was being inflated. This should have caused the currency to rise rapidly. But the renminbi has been pegged to the dollar for most of that period, accumulating a big pile of foreign reserves.

Compounding it all, Chinese investors believe that none of the country’s banks or financial products will go bust because the government stands behind them all. This is partly the legacy of the banking rescue mounted a decade ago, when about 40 per cent of loans belonging to four big government-owned banks were transferred (at face value) to asset-management companies. But the broader problem is the tendency of the party leadership to provide a policy stimulus every time growth dips.

Financial controls are gradually being relaxed. But the offshore market on which the renminbi is now allowed to trade is tiny – less than 5 per cent of the value of China’s foreign reserves. Opening the capital account fully is impossible; it would result in large flows of funds and a loss of control that policy makers cannot countenance.

In a country that already accounts for half of all capital-intensive production globally, and nearly a fifth of all US imports, the growth of manufacturing will inevitably slow. A thriving service sector could pick up some of the slack. But building more houses and railways is not the way to encourage it.

China’s economy is in an unbalanced state. It can stay that way for some time – but the longer it does, the worse the eventual outcome will be. The industrial sector is already plagued by falling prices. To avert a wider deflationary spiral, the country needs to wean itself off the false cure of perpetual policy stimulus.

The writer is founder of RealEconomics.com, an independent economic research firm

It is impossible for any economy to sustain the rates of growth that China has achieved since about 1985 ...

... China has, already, defied conventional economic wisdom in part by authoritarian management but, in the main, by the effect of unleashing China's inherent entrepreneurial potential after the death of Mao and the purge of the Gang of Four. But it cannot be sustained. Dr. Basu is right, allowing the corrections to occur sooner, rather than later, is the best policy ... even the social disruptions, which will happen, will be easier now than in five or ten years.

_____
* Dr. Prasenjit K. Basu, PK served as the the Regional Head of Research and Economics at Maybank Kim Eng Holdings Limited, Research Division since April 2012. Previously, Dr. Basu served as the Managing Director and Chief Economist of Asia Ex-Japan at Daiwa Securities Capital Markets Co. Ltd., Research Division. Dr. Basu served as the Head Economist at Khazanah Nasional Berhad. He served as a Chief Economist for Southeast Asia and India at Crédit Suisse AG, Research Division. Dr. Basu previously worked as an Asian economist at Wharton Econometrics and UBS Securities.

 

[CougarKing]

The "other China" conducts exercises in the South China Sea:

Defense News

Legislator: Taiwan Stages Largest Drill Since 2000 in Spratlys
Apr. 28, 2014 - 02:58PM  |  By AGENCE FRANCE-PRESSE

TAIPEI — Taiwan this month mobilized hundreds of marines for its largest military exercise since 2000 near disputed islands in the South China Sea, a legislator said Monday.

Lin Yu-fang said the landing drill was held on the Taiwan-administered island of Taiping, part of the Spratlys — a chain which is also claimed in whole or in part by China, Vietnam, Malaysia, the Philippines and Brunei.

Lin, a member of parliament’s defense and diplomacy committee, said the task force from two marine companies, armed with mortars and anti-tank rockets, boarded some 20 amphibious assault vehicles for the landing on Taiping on April 10.

(...EDITED)

 

[Edward Campbell]

Thucydides and all,

All of you do realize that there's a difference between the Christian churches allowed to practice openly in mainland China and the underground churches?

For example, the officially state-sanctioned Catholic church in China, who hold masses in places such as Beijing's South Cathedral, are allowed to practice openly because its clergy are supposed to ensure that their folk don't put God above the state when it comes to final loyalty.

This practice openly conflicts with the Vatican, so thus these PRC-regulated clergy are not recognized or have a connection with the Vatican/Rome.

In contrast, there is an underground Catholic church compose of clergy who do have ties with the Vatican/Rome and the Catholics in the rest of the world. When I did an exchange semester one of the universities in China nearly a decade ago, some of our professors were Jesuit priests who did not come in their official capacity. Some had a business background or an economics background, and thus were registered by the state as professors in this field. However, this did not prevent them from practicing in secret among the Catholics in the program.

I also recall that this bone of contention between Beijing and the Vatican also meant that the Vatican recognize the regime in Taipei, Taiwan as the "One China" as opposed to the mainland.

I assume this practice extends to other Christian (Protestant) sects as well, such as Baptists and the Eastern Orthodox church, etc.

...

But some churches in some provinces one church in one province appears to be having a problem according to this article which is reproduced from China Digital Times:

http://chinadigitaltimes.net/2014/04/china-accused-anti-christian-campaign/

Officials: Church Demolition Not Attack on Christianity

Sanjiang Church in Wenzhou was demolished on Monday night after intense resistance from Chinese Christians. Authorities say that parts of the building were illegal, and that the church had been given the opportunity to remove them, but critics have accused them of engaging in a campaign against Christianity. The Telegraph’s Tom Phillips reports:

The Sanjiang church in Wenzhou, a wealthy coastal city in Zhejiang province with one of China’s largest Christian populations, was reduced to rubble on Monday night after excavators spent the day tearing parts of the building down.

Congregants accused the provincial government, which is controlled by Xia Baolong, an ally of Xi Jinping, the Chinese president, of promoting an orchestrated anti-church campaign in order to slow Christianity’s rapid growth.

China could be set to become the world’s largest Christian congregation by 2030, a leading expert told The Telegraph earlier this month.

Officials denied the demolition was an attack on Christianity on Tuesday and vowed to “aggressively push on” with a campaign against illegal buildings. [Source]

Phillips posted a series of updates about the demolition on Twitter:

China Digital Times is a news aggregator run out of the University of California at Berkley. The story originated in The Telegraph

 

[CougarKing]

More food for thought at this National Post article below:

China’s lending bubble could threaten U.S. and global economies if not defused

 

[Edward Campbell]

Using new data The Economist has revised its forecast of when China will overtake America as the world's largest economy.

Source: http://www.economist.com/blogs/graphicdetail/2014/04/daily-chart-19?fsrc=scn/tw/te/pe/ed/dailychartppp

The article explains that:

"UNTIL 1890 China was the world’s largest economy, before America surpassed it. By the end of 2014 China is on track to reclaim its crown. Comparing economic output is tricky: exchange rates get in the way. Simply converting GDP from renminbi to dollars at market rates may not reflect the true cost of living. Bread and beer may be cheaper in one country than another, for example. To account for these differences, economists make adjustments based on a comparable basket of goods and services across the globe, so-called purchasing-power parity (PPP). New data released on April 30th from the International Comparison Programme, a part of the UN, calculated the cost of living in 199 countries in 2011. On this basis, China’s PPP exchange rate is now higher than economists had previously estimated using data from the previous survey in 2005: a whopping 20% higher. So China, which was had been forecast to overtake America in 2019 by the IMF, will be crowned the world's pre-eminent country by the end of this year according to The Economist’s calculations. The American Century ends, and the Pacific Century begins."

 

[CougarKing]

Uighur separatists again?

Explosion Rocks Train Station in Xinjiang's Capital
By Shannon Tiezzi
April 30, 2014


Chinese state media are reporting that there has been an explosion at a railroad station in Urumqi, the capital of Xinjiang. The explosion reportedly took place around 7 p.m. local time at Urumqi’s south railroad station, the largest train station in Xinjiang. According to witnesses cited in Chinese media, the explosion seemed to originate from luggage that had been left on the ground near the station exit. In response, Xinhua reported that all entrances to the station were closed and armed police are on the scene. Train service was suspended.

As of this writing, the number of casualties was unclear.

The timing of the explosion is doubly sensitive as it comes just before the May 1 Labor Day holiday. During this mini-holiday, travel picks up across China, meaning the train station would be especially busy.



The Diplomat

 

 

[Edward Campbell]

The Financial Times reports that a crackdown is coming, according to this article which is reproduced under the Fair Dealin provisions of the Copyright Act from that newspaper:

http://www.ft.com/intl/cms/s/0/75f3489e-d0cc-11e3-9a81-00144feabdc0.html?siteedition=intl#axzz30OzXFxII

Xi vows to ‘suppress’ violence after Xinjiang attack

By Jamil Anderlini in Beijing

Last updated: May 1, 2014

China’s President Xi Jinping has vowed to “resolutely suppress” violence in the Muslim-dominated far western province of Xinjiang after a knife and bomb attack at a railway station killed three people and injured 79 others.

The attack outside the station in Urumqi, the capital of Xinjiang, occurred on Wednesday evening as Mr Xi was wrapping up a four-day tour during which he emphasised Chinese rule over the region.

“The battle to combat violence and terrorism will not allow even a moment of slackness, and decisive actions must be taken to resolutely suppress the terrorists’ rampant momentum,” Mr Xi said in response to the attack, according to state media.

He also said China would pursue a “strike-first” strategy in Xinjiang “to deter enemies and inspire people”.

The vast barren region borders Pakistan and other central Asian countries and is home to the predominantly Muslim, ethnically distinct, Uighur people, many of whom chafe under Chinese rule that imposes strict limits on their religion, language and freedom of movement.

In the past year, more than 100 people have been killed in violent incidents in Xinjiang that the authorities blame on Uighur separatists and extremists.

More recently attacks have become much bolder and have spilled outside the region’s borders.

In October, a car allegedly driven by Uighur separatists crashed into a group of tourists and caught fire in Beijing’s Tiananmen Square, killing three occupants and two bystanders.

In March, a group of sword-wielding Uighurs hacked to death 29 people and injured hundreds more in a train station in southwest China.

Wednesday’s attack appeared to be timed for the end of Mr Xi’s visit to the region and came after four days of intense national propaganda surrounding his trip.

Two blasts went off soon after 7pm at the Urumqi south station and “knife-wielding mobs” slashed people at the exit to the train station, according to state media accounts.
Along with the three dead, four people were seriously injured but in a stable condition on Thursday morning.

The train station was briefly locked down but reopened by 9pm. In a sign of the government’s fear that the attack would overshadow the official propaganda surrounding Mr Xi’s visit, Chinese television had not even mentioned the incident by 11pm on Wednesday.

The first 20 minutes of state-controlled China Central Television’s 10pm broadcast was instead dedicated to footage of Mr Xi in Xinjiang meeting “model workers” and Uighur schoolchildren and awkwardly hugging elderly Uighur women.

It also lingered on pictures of him visiting police and paramilitary units and upbraiding them to crush all “terrorism and separatism” in the region.

“The long-term stability of Xinjiang is vital to the whole country’s reform, development and stability; to the country’s unity, ethnic harmony and national security as well as to the great revival of the Chinese nation,” Mr Xi said while meeting with local Communist party and government officials.

I suspect - I have no proof at all - that the recent upsurge in violence is inspired by foreign, Central or West Asian, Islamist leadership. My guess is that they have seen that terrorism works against the Arabs and the US led West ... but the Chinese are neither. My personal sense is that this will end badly, bloodily for the Uyghurs.