Crowd Management

China has admitted to killing villagers of Guangdong province’s Dongzhou village, northeast of Hong Kong, when policeman fired into a crowd of farmers in an attempt to calm the crowd of protestors. These protests are a frequent occurrence in China due to the growing resentment that many farmers feel to the government.

Chinese farmers have for a long time been the lowest rung of society in China, but with the communal farming introduced by the communist leadership, they have had to give up the land that was the only thing that they possessed of any value. Now the government with most of its interest in manufacturing and industry has left the farmers to fend for themselves against corrupt and greedy provincial officials.

This has resulted in many thousands of protests every year, which are always put down with murder, imprisonment, and torture. This time however some outside media picked it up and now the rest of the world is able to see the real PRC government at work.

Investment Keeps Coming In

China continues to attract large investment in its industry, which has translated into a red hot economy that is not only poised but in many experts eyes has already become the world’s leader in manufacturing. This year 450 out of the top 500 corporations invested in China. In addition, businessmen from 202 nations have poured 600 hundred billion dollars into the Chinese economy.

The large sums invested in the Chinese industry allow the PRC to keep the money that their domestic companies make and invest it into the Peoples Liberation Army. It is for this reason they can maintain large military spending that is required for the modernization program that the PLA is involved in without hurting the economy.

All the investment dollars that were poured into China will later come back to bite the West in the rear, in the form of a modern high-tech Chinese army.

America Funding its Own Downfall

Chen Dongqi, vice president of the Academy of Macroeconomic Research at the National Development and Reform Commission, predicts that China's economy will continue to increase its GDP at the red hot rate of 8.5%-9% next year. This will be a slowdown over the past three year growth of 9.5%. Although China is known for deliberately predicting lower growth rates in order to try not to draw to much attention to itself from people in competing countries (like the US).

The drop in the growth rate was attributed to an expected drop in the growth of China's trade surplus. Again, this has been predicted for the last several years, and we are still waiting to see a drop in the surplus’s growth rate (I’m not even talking about a drop in the actual surplus). The most important part about China's growth is that it is achieved thanks to its manufacturing industry, which in the end is a countries lifeline.

Many of my readers like to point to the growth of the Chinese economy in order to show that the PRC is not a threat to the US. They reason they give is that, “China needs the US more then the US needs China,” and following this logic we can expect that China would do nothing that would hurt its best customer.

While this was true years ago, today this assumption is wrong. Thanks to US investments, technology, and manufacturing China is now able to make everything it needs for its own market, which we should remember is more then four times greater then the entire US market.

The large Chinese market was the reason given to the American public for why we should trade with the PRC. It was sold to us that Americans would first help China get on its feet and later the Chinese were going to repay us by buying our goods.

Well they are certainly going to repay us by buying our goods, except those goods will be manufactured in China by Chinese companies, and the American public will be left jobless and in crisis.

Is Europe Next?

The Chinese and the European owned consortium Airbus are about to sign an agreement to let the Chinese assemble all of Airbus's single isle Airbus aircraft. Currently, five affiliates of China Aviation Industry Corp I (AVIC I) and AVIC II are involved in producing parts for Airbus aircraft.

The deal also includes the transfer of "high-technology wings for the A320 narrow-body jet to China from Britain within seven years." This transfer should allow the PRC to continue to gain expertise needed to insure their own industry will be able to soon compete with and eliminate their Western rivals.

Once again this is an example of China continuing with its plan not only to deindustrialize America, but also the rest of the West including Europe, which in any conflict could be called upon by the US as an ally.

No More Roaming in China

Once again the Chinese government is finding ways to maneuver around freedoms that are afforded by new technologies, like the cell phone. The Ministry of Information has announced that it will require all users of phone cards for mobiles to register with the government or face having their service cut.

The official reason given is that according to the Ministry of Information Industry, "China will require all mobile phone users to register in the near future in an effort to stem rampant telephone fraud and illegal text massaging...." Obviously, their real reason is that it will allow the PRC to monitor conversations that were previously impossible to track. Even in their own statement they said that the new rules would help to monitor “improper political commentary."

This of course comes at the same time as the UN announced that China is still one of the worst users of torture in the world (yes, even worse then the "evil" Americans). Overall this just is another peace of evidence of the fact that letting the PRC enter the free market is not helping the citizens of China, but instead is giving the communist government more incentive to stay in power.

The Great Textile Compromise

Forbes has a good article on the textile deal that the US and China had signed in early November. In this deal the US will lift emergency safeguards that it implemented earlier in the year in order to protect home and other foreign textile makers, from Chinese "competition", and in return China will limit growth in 21 textile categories until at least 2008.

While the rest of the media is making it seem like the deal was a victory for both China and the US, in reality it was an American economic defeat. As part of the deal imports from China will be allowed to grow by 10.0-15.0 pct in 2006, by 12.5-16.0 pct in 2007, and by 15.0-17.0 pct in 2008. What kind of victory is it when you still allow the other guy to increase their exports by 17% a year?

This is even worse then the deal that the Europeans agreed to in which imports are restricted to 8.0-12.5 pct a year growth, although that only covers 10 items unlike the 21 that the US agreed to.

So overall all this means is that the US agreed to a slower increase in the pace of the gradual deindustrialization of America. This in the end will lead to an ability for the Chinese to defeat the US without America putting up much of a fight.