China Gives a Yao for the Common Worker

China has announced that one of the 2,900 model workers to be recognized this year will be NBA basketball player, Yao Ming. That’s right, China is telling its people to strive to be seven foot six inches tall and leave China for the United States in order to play a sport and make millions of dollars. In other words to be a communist model worker you just have to strive for the American Dream. Who knew?

And to think, all this time the whole world thought that investing capital in China would lead to it switching to capitalism. Oh how we were all wrong. Apparently we should just import Chinese that have a god given talent, make them milliners, and market them as the future of China.

Finally! Now I can say that I figured out a way that we can import from China, and at the same time bring down the Communist dictatorship. That is my new policy on curbing and solving the Red China threat.

Everyone, your job is clear. Go out and spread the word that we have a solution.

China Tightens Energy Controls

In another example of the Communist party tightening its control over China, Forbes is reporting that China has just formed a new regulatory agency that will control the countries natural energy producing resources and its energy companies. The State Energy Office will report straight to the Cabinet, thus ensuring that all of its mandates are carried out. In addition to controlling China's resources, it will also probably be in charge of securing foreign resources for China, and controlling energy usage within the country.

Apparently the only thing that this new agency will not control is the use of military force to secure foreign resources. Thankfully, the leadership of the PRC has not seen it fit to give too much power to a single agency, unless that agency is the Central Communist Committee.

China's Free Banking policy

To all those that say that by allowing China to enter the free market system it would force the PRC to end their restrictive government regulations, just read about the new rules that China is thinking of enacting. Currently China wants foreign banks to go to poorer western regions that do not have as many banking options, in order to prevent them from competing with local Chinese banks in major prosperous eastern provinces. In addition, they are thinking of preventing foreign banks from being able to buy equity stakes in more then two Chinese banks. This would prevent foreign banks from taking over local banks and knocking them out of competition.

To me that does not look like China is following a free trade system, where government tries to lessen regulations. Instead it looks like a communist controlled economy where the government wants to be in control of everything including the banking industry.
Amazingly the rest of the world turns a blind eye to these blatant offences of World Trade Organization rules. I'd understand if China was trying to cover this up, but public officials are stating that the reason they are doing this, is because China's local banks are not strong enough to stand up to the foreign competition.

If the United States does the same thing to protect its steel industry the whole world cries foul, but if China enacts protectionist policies everyone just ignores it and try to find an excuses for China. I'd say that’s a double standard if I ever saw one.

Weakness in China's Economy

Not all economic news coming out of China is good news. China’s biggest problem is their lacks of energy, in particular oil, too fuel its economy. In a report by China Southern Airlines Co., which is the largest carrier in China by fleet size, the airline suffered a 314.2 million yuan ($38 million) net loss in the second half. While at the same time in the previous year it had recorded a 873.3 million yuan gain. The loss has been attributed to the rising oil price. Southern Airlines had to increase fuel expenditure by 66 percent. However, the airline is expected to be able to regain profitability due to the ever increasing travel demands of the Chinese citizens. In addition, China Southern Airlines plans to enact cost cutting measures to reduce the loss in the short run.

This should bring a very important point to everyone’s attention. As I have posted earlier this is probably the year that we hit the world peak in oil production. Hitting the peak will cause the prices to jump even more and costs to rise, also this will cause an ever more heated competition between the United States and China for every last drop of oil that is left. Already, the PRC is starting to catch up to the US on securing oil contracts, and it is only a matter of time before this race will take a more serious turn of direct confrontation over oil interests.

Europe in trouble? Part II

With the unveiling of the new economic numbers the European Union has decided to take a tougher stance on Chinese textile imports. They began an investigation on nine separate imports, and are asking China too curb their exports of textiles to Europe. One of those textiles, pullovers, had imports rise 534% in this first quarter. However, even with these investigations which are supposed to lead to tariffs or other protective measures, Europe is very scared to go into a trade war with China.

Personally, I am happy that the European textile industry is being starved by China. It is only through loosing one of their historic staple industries that they will learn a lesson about the danger of communist China. This is a lesson that I hope the Europeans pay attention too, for unless they act and not just talk about punishing China then they will loose other more valuable industries. By the way how is the German economy doing?

Chrysler Cruises to China

DaimlerChrysler has announced that it will produce a new class of compact Chrysler cars in China for export to the United States. This is yet another move that emphasizes the current trend of manufacturing moving out of the US and into China. Chrysler has said that it will keep its factories in the US and that only this new compact will be produced in China. That of course is code for: we will keep the factories here until you get too used to the ultra cheep cars from China to object to the relocation of the US factories to China. If you don't believe me, just read the New York Times article about the entire automotive industry is seeing China as the savior that will reverse their current losses.

Who could blame the companies when you compare the costs of labor of producing anywhere else? To produce in Germany it costs $49.60 an hour, in Japan it costs $40.96, in the US it is $36.55, even in Brazil and South Africa it costs $5.87 and $5.48 respectively. While in China it is only $1.96 an hour, and this number includes all the benefits.

Who is to blame you ask? Well first, I blame the Unions for driving the costs to such a ridiculous total that it is impossible for companies to compete with China. Second, I blame the people that have allowed China to enter the WTO while the Chinese government still controls labor rates, benefits, and does not allow for fare competition. How can you have a free market system when one of the countries that participates in it cheats by intervening in its economy? That is the opposite of a free market system.

I really hope that we wake up before all our industries get brought over to China, and it will be too late to do anything. It is time that our government steps in and protects our industries from the Chinese onslaught. However, somehow I really doubt this will happen.

PLA vs. Pentagon

Once again another Pentagon official has said that the Chinese military is now at a level that is close to tipping the balance of power in East Asia. Peter Rodman, assistant defense secretary for international security affairs, testifying in front of a joint hearing of the House International Relations and Armed Services Committees said that China is "a problem here and now." He was trying to encourage congress to act to stop Europe from lifting an arms sales ban on China. Mr. Rodman also talked about how the current Chinese abilities to inflict severe damage to any American forces that would try to intervene in any Cross-straights conflict, would prevent US from using its military to prevent any conflict from occurring.

Here is another good article about the Chinese government planned anti-Japanese protests. Except this article takes an interesting view that these protests can backfire, and quickly turn anti-government. One can only hope that this will happen.

Who owns Senkaku and why anyone cares

Senkaku is currently a chain of uninhabited islands that is currently at the heart of the chill in the China and Japan relationship. GlobalSecurity.org has taken a very in-depth look at the controversy surrounding this group of uninhabited islands (overall I recommend for everyone to take a look at this site, as it is one of the best all around resources on the internet). At the heart of the territorial dispute over this chain of islands is the oil and natural gas that is underneath these volcanic rocks. Japan, whose ownership of the islands China is disputing, has as of 1996 declared an exclusive economic zone (EEZ = 200 nm) around these islands.
However, last year China began to drill for natural gas just 3 miles west of the median line between the two countries. Now Japan claims that this Chinese drilling is actually taking away the resources that are in its EEZ. China has said that since the Senkaku islands are its territorial possessions Japan has no claim to the resources.
In response to Chinese drilling, Japan is allowing the exploration and development of the fields on its side of the EEZ. China has said that this permission is a provocation and is illegal.

I just bring this up to point out that the anti-Japanese unrest that is currently happening in China just happens to coincide with the fact that China and Japan have begun to battle over their rights in the East China Sea and the surrounding areas. In addition, I would like to mention that when after WWII the United States controlled the islands, and then in 1972 Japan regained the possession of Senkaku chain of islands China did not object to these dealings. It only began to claim the islands after it was discovered that the area surrounding the islands possessed vest natural resources.

South Korea Plays for the Fences

In the last couple of weeks South Korea has been making news with its plans to bolster military ties with China and Russia. The Koreans and the Chinese have agreed to have defense minister meetings be a regular occurrence, as well as engage in more security exchanges. Currently South Korea wants to bring its military partnership with China to the same level of strategic importance as its military relationship with Japan. In addition, the South Korean defense minister will travel to Russia to try to boost military cooperation with the Russian Army.
This is the latest attempts by South Korea to distance themselves from their long time allies the United States and Japan. South Korea is currently trying to balance its traditional alliance with the US and its new cooperation with China. Currently, Korea and China are becoming major economic partners and this has led to a more strained relationship between the Washington and Seoul.
Personally I don't blame the Koreans for trying to ally with China, because if you look from their point of view you can see that American influence in the region is shrinking while the Chinese are growing ever more powerful. It is only natural that the South Koreans would want to switch to the apparent stronger side.
I just bring this up to show how gradually China is gaining strength and slowly it is even able to split our own historic, well established alliances. This is the old strategy of divide and conquer. China currently is dividing us, and very regrettably it will soon conquer us.

Peg the Yuan

Bloomberg is reporting that the Group of Seven Industrialized Nations has decided to stop the "charm offensive" against China and get serious about forcing the PRC to stop pegging the Yuan to the dollar. Currently China pegs the Yuan at around 8.3 to the dollar no matter the current financial situation. This means that at a time when the dollar is depreciating the Yuan is made to artificially depreciate with the old greenback.
Europe is especially hurt by this policy because this means that while the Euro is rising companies are less willing to import expensive European goods, thus settling on cheaper US and even less expensive Chinese goods. The United States is hurt as well because even with a depreciating dollar it cannot make any headway in its trade balance with China. This is a major reason why the US currently has a skyrocketing trade deficit in general and with China in particular.
The foreign ministers have said that they are running out of patience with China, and unless the Yuan is allowed to be traded freely without any conditions, they threaten to impose tariffs on Chinese goods. I only have to say that it’s about time they stop pampering China.

Another topic I want to comment on is that I have been reading how many people are defending the anti-Japanese protests in China. Are you people smoking hash? Because you have to realize that these protests are not spontaneous, but are government organized through the Chinese university system. Does anyone really believe that China would allow protests to happen without the party’s permission? This is China's way of throwing another monkey ranch at the West. Its motive here is to simply stop Japan from becoming a permanent member of the UN Security Counsel. When time comes to vote to allow Japan to take a seat China will use these staged protests to veto Japan's bid. They know that US wants Japan on the council, and by preventing this, the PRC undermines American power at the UN.
If China is really serious, let it apologize for the atrocities it currently commits every day. Even better let them release actual protestors that are held in Chinese slave labor camps just for disagreeing with the communist party.

The Five T's

In a good article for the WorldTribune.com John Metzler has done a wonderful job describing the recent attempt by China to reach an agreement with India on their long standing border dispute. His whole premise is based on five t's: Territory, Tibet, Trade, Technology and Tokyo.
Territory obviously being the settlement about both countries long standing territorial disputes. Tibet is getting India to recognize that Tibet is a part of China, and to stop the Indian aid that is given to Tibetan dissidents. Trade is obviously increasing the economic cooperation of the two Asian giants, which currently stands at $13 billion and is expected to reach $30 billion in 2010. Technology is China wishing to use India’s strong software industry in conjunction with its own strong hardware base to control the world technology market, in what the Chinese Premier Wen said would be the "Asian Century".
The final T is for Tokyo and that relates to Japan’s hopes of becoming a permanent member of the UN Security Council. China hopes to derail the Japanese attempt at achieving a permanent Council seat with the help of India and other of its allies. The main reason for not wanting Japan on the Security Council is not Japans history as the PRC would like everyone to think, but instead it believes that a seat for Japan would be a victory for the United States and China can't have that.

WMCs' (Weapons of Mass Censure)

A study done by Harvard, Cambridge, and University of Toronto has found that China is the world's most sophisticated internet filtering regime. This report states that China uses filters to block certain keywords and entire web sites (yours truly hopes he is one of those sites).
Even more interesting is how China is using American technology to censor the internet. The two companies that were singled out for assisting China were Cisco Systems and Google.
It is also important to understand that China is the main proliferators of internet censuring technology. That combined with the fact that it acts as the regional internet access provider for neighboring countries like North Korea, Uzbekistan, and Kyrgyzstan proves that China is not out there for the improvement of the world, but instead for ensuring the power of dictatorial regimes.
It is now up to the rest of the world to stop the spread of WMCs’, and to push China to let its people enjoy the entire World Wide Web and not what the communist party wants them to see.

PLA's Buildup

Yesterday, the Washington Post reported on the ever increasing buildup of Chinese forces. The most interesting part of the article is how the buildup is not quantitative but instead this is a qualitative buildup. This can be seen by reports of how China is cutting 300,000 more troops from its military in the latest round of force reductions. After the latest cut the PLA stands at a little over 2 million people, which still keeps them as the largest military in the world. However, these cuts let them better train the troops that are left thus making them more dangerous then the larger force that they had before.
Another interesting point of the article was that China had almost completed its initial goal of deterring US entry into any conflict it might have with Taiwan. By building up its naval, air, and missile forces it has ensured that the US would think twice before entering any conflict with China. This has apparently been their goal since 1996 when the United States Navy sent two carrier battle groups to support Taiwan during a huge Chinese defense exercise in the area.
Now the next goal of the PLA is to be able to successfully execute a quick invasion of Taiwan so that the US will have no time to respond.

The Chinese on Japan's UN Bid

Japan has recently been pushing for itself to be admitted into the UN Security council, but its biggest obstacle is the threat of China vetoing its bid. For Japan to take a permanent seat in the security counsel, it would require for an amendment of the UN constitution, and that would need an approval or an abstinence from China. However, China has been hinting that it will veto unless Japan gives a sincere apology for invading China during World War II. I agree with China, but would like to say that the PRC should offer a sincere apology for invading Tibet and the murder of students at Tiananmen Square demonstrations. Since China is such a fighter for human rights it is only appropriate that it set a good example itself.
Although, somehow I doubt that China will ever admit to any wrong doings on its part.

Lev Navrozov

Here is the most recent article of Lev Navrozov, who currently is one of the heads of the not-for-profit Center for the Survival of Western Democracies, Inc. I know that this isn't one of his best articles but I highly recommend you read his archived columns. As far as I know he is currently the only person in the media that is warning of the Chinese threat. He is definitely the only person talking about the Chinese development of post-nuclear super weapons in seven fields, also known as Project 863 in China. These are weapons that are designed to be used to kill off specific opponents, and by the time that enemies know they have been attacked it is too late since no one is left to retaliate. For more information on this project including its history as a secret Russian program, I suggest you visit Mr. Navrozov's archives.

From China with Love: Part II

If you think that the United States is the only country worrying about its huge trade deficit with China then you should read this article from the Indian Express. This report brings to light the fact that China will soon become a net world exporter rather then currently being a net importer. By itself this is not too terrible, what is worrying is the fact that soon almost every country in the world will have a trade deficit with China. Just in the first two months of this year China has run a $10.9 billion surplus, which is up $3 billion from the same time last year when their surplus was $7.9 billion.
In the end, this translates into political power for the Chinese government, which can use the debts it is owned due to the deficits, to push ahead its ambitious agenda to make China the lone superpower of the world.

Is Taiwan the new Czechoslovakia?

This is the question that the entire world should think about very hard. The Telegraph is reporting that the Vatican is considering dropping its recognition of Taiwan and only recognizing the Peoples Republic of China. The negotiator of this deal Bishop Joseph Zen Ze-kiun was quoted saying:

"The Holy See has been thinking of giving up Taiwan. This is a difficult
[decision], but it has decided to do it. If the Holy See does not
establish [diplomatic] ties with China, Catholics there will not have real
freedom."

Don't look twice, you read it correctly the Vatican is “giving up Taiwan”, an entire independent nation, so that the Catholics in China will be allowed to worship freely. They are not asking for freedom of worship for everyone in China, only the freedom of the followers of Catholicism. Whatever happened to the Vatican standing up for freedoms of all people and not just the Catholics? The answer is probably that if those ideals ever existed in the first place, and I doubt that they did, then those ideals just died with the pope.

However, we should not blame the Vatican alone for most countries of the world, including the United States, are doing the same thing. Just look at last years Olympics when China threatened not to participate if the Taiwanese delegation marched under the Taiwanese flag and not the China Taipei flag.
What China is doing with Taiwan is eerily similar to what Germany did with Czechoslovakia.
Today, the world must stand up to China on the Taiwan issue, and recognize Taiwan as an independent nation. For if we don't, then history will repeat itself and after Taiwan becomes part of the mainland then China might try to grab other and maybe bigger things.

From China with Love

The Financial Times has put out a good article about a bill that is working through congress, which would apply a 27.5 percent tariff on all of China's exports to the United States. Although, as it looks now it will probably fail to pass due to large Republican and some Democratic opposition, it is still good to see that Congress is worrying about the US trade deficit with China.
The article also presented some good numbers like that US imports from China rose 37 percent in January and February, while during the same period US exports to China fell by 10 percent. The worst part of these numbers is that China's exports are not only growing in traditional areas like textiles and apparel, but in heavy industry areas like steel and chemicals. This is happening at the same time as the same industries are slowly dying out in America.
A major problem with controlling the trade deficit with China, is that since China has recently become a member of the World Trade Organization the US can't just slap on some tariffs. So the Congress and Senate are tying the tariffs in with Chinas unwillingness to stop pegging its currency to the US dollar. If the bill miraculously passes both houses then whatever China does, whether it frees its currency or not America should be better off in its economic war with China. So everyone keep your fingers crossed, but don't hold your breath over the passage of this bill.

In good news it seems that slowly the American military is waking up to the threat posed by the ever increasingly improved Chinese war machine.

Europe in Trouble?

The Europeans after courting China and criticizing US on its attempts to cut its trade deficit with the Middle Kingdom now are worried about China exporting textiles to Europe. Europe has just passed a bill that would warn them when the Chinese imports of textiles increase too much. This warning will trigger investigations and private consultations with China. What Europe forgets is how it criticizes the United States every time it tries to protect its domestic manufacturers, but now that European manufacturers are in danger it’s a whole different story.
This rush to get on top of Chinas textile exports is do to the abolishment of the world’s textile import system. Now that the quotas have been abolished sellers are obviously going with the super cheep Chinese textiles. This means that all the world producers that were used to having a guaranteed need for their textiles are being pushed out of business. It would be alright if this was happening in a fair system, but communists Chinas ability to use dictatorial government action to keep employees unorganized, uninformed, and highly underpaid allows it to destroy any competitor that it comes against.
Until China frees up its protectionist policies there should be no reason why the rest of the world should be stopped from protecting its manufacturers.

Death by China

A couple days ago Amnesty International came out with another interesting report. It was their annual numbers for executions around the world. Not surprising China is leading the world in another category. China took first place with 3,400 people executed in 2004. The United States came in fourth with 59, beaten out by Vietnam with 64 and Iran with "at least" 159 people executed. The numbers for most of the governments though are probably much higher, due to large numbers of illegal executions that are not reported to the UN. Large numbers of the people that are killed in China's war on dissidents, sorry I mean China's war on terrorism, are not reported in these stats. Neither does the UN count the deaths that occur in China's slave labor camps, where most political prisoners are held.
This is just another example of the "spectacular" human rights record of the new "reform" government in China.