May 15, 2016: The U.S. Department of Defense released a detailed report two days ago describing China’s growing military power and how this is being used to assert claims to the entire South China Sea. China quickly denounced the report by insisting that China was only defending itself by resuming traditional control of off-shore areas. While this plays well inside China the historical record and international agreements do not. Throughout history the most common cause of wars was territorial disputes like this. Chinese leaders know this but they need an external threat to distract a population angered by government misbehavior. Mainly this is about corruption which has led to a lot of incompetent officials, extensive pollution and growing abuse by the many security agencies a communist police state needs to survive. Most Chinese don’t really care if communists run the country as long as they do it competently and efficiently. The communist government that has been in charge since the late 1940s is seen as a failure by many Chinese and that, understandably, has the government concerned (for its own survival).

The American report describes how China believes it can gain control of the South China Sea. Currently American and Chinese warships are literally facing off as the United States challenges Chinese claims. China believes it can handle American warship visits to the South China Sea without triggering a disastrous (especially for China) war. This is being done by quietly mobilizing a growing fleet of civilian cargo and fishing vessels. These unarmed ships are used, usually in groups, to block the moment of unwelcome foreign commercial or military ships. This Chinese “naval militia” has a numerical advantage because the U.S. Navy only has 55 warships assigned to the West Pacific while the China has 116 warships assigned to its southern (mainly the South China Sea) fleet plus 200 large (over 500 tons) seagoing coast guard vessels in the area. Increasingly China is calling in the naval militia, which it maintains with subsidies (for building new fishing boats) and assurances that the navy will assist Chinese fishermen in gaining access to foreign fishing areas and exclusive use of fishing grounds in international waters. There appear to be over a hundred civilian ships (mostly ocean going fishing trawlers) associated with this militia program, which openly functions as a government supported organization and has headquarters in southern China.

It’s not just the American fleet China has to worry about, there is also international sanctions. China is no longer openly ignoring the deliberations of the Permanent Court of Arbitration regarding Filipino accusations that China is acting illegally with its claims in the South China Sea. In part that’s because a growing number of Western nations are openly agreeing that any Court of Arbitration ruling will be binding and must be enforced. That means many nations now say they will support any penalties levied against China. This is something China cannot ignore. The court will deliver its final ruling by June and China is dismayed to discover that all its economic bribes and military threats are not diminishing the growing international condemnation. The Philippines, America, Australia, Japan and South Korea were quick to openly oppose the Chinese claims. Other nations in the area (Taiwan, Indonesia, Vietnam, Malaysia and India) held back for a while but are now also in open opposition.

Meanwhile China continues to make threatening gestures. In May 2016 Chinese warships in the South China Sea were seen practicing detailed exercises for halting merchant ships and boarding them. In one part of the exercise the intercepting destroyer fired its guns, as it would to force a ship that refused orders to halt and be boarded. This is all part of a trend that is not going anywhere good.

North Korea

China is making it very clear to North Korean leaders that China is not happy with North Korean misbehavior. The most recent example of that is the appearance, on state controlled mass media, of commentators explaining why the current North Korean government will collapse within 10-15 years because of its chronic mismanagement of the economy. Meanwhile North Korea is upset because China is making it easier for defecting North Koreans to get out of China and to South Korea. If this continues (and China has been vague about that so far) it will undo the success Kim Jong Un has had in reducing the number of North Koreans getting to South Korea. In 2011, the year before Kim Jong Un took power, 2,706 North Koreans made it to South Korea. By 2015 energetic new measures (more border guards, more executions of border guards caught taking bribes, more land mines, more shoot to kill orders, more cell phone detectors) ordered by Kim Jong Un had reduced that by over half to 1,276. Worse, opinion surveys in South Korea found that most of those who fled, risking their lives in the process, did it to escape growing hunger and poverty, not to embrace a democratic form of government. Democracy is an alien concept to North Koreans while alternatives to hunger and extreme poverty are not. This makes it clear to North Korean rulers that their failure to provide food and jobs is why their subjects are fleeing. So North Korea blames China for its problems (by not cooperating in preventing North Koreans from escaping North Korea). At the same time China continues to allow North Korea to use China as a conduit for smuggling in banned (by international sanctions) components for its illegal ballistic missile and nuclear weapons programs. There is big money involved here in the form of bribes and much larger fees North Korea must pay to get banned goods in via China. Cutting off this trade is one of the last important things China can threaten to withdraw if North Korea does not set itself right by adopting economic reforms (a true market economy) that worked so well in China. Doing more to curb corruption would help as well but few North Korean leaders are interested in this sort of change.

The War On Corruption

Tthe recent release of some of the 11 million documents stolen (via hacking) from a Panama based international law firm (Mossack Fonseca) is causing Chinese leaders major problems. So far these documents show that many Chinese did business with Mossack Fonseca, which assists wealthy people to set up overseas bank accounts and corporations whose owners are very difficult for most people (or even other governments) to identify. The small number of documents publicized so far has shown that a number of people closely related to senior Chinese officials (current and former members of the Politburo Standing Committee) were setting up these offshore accounts and corporations. This was particularly embarrassing because at the same time the “Panama Papers” hit the news China did the unprecedented and indicted Guo Boxiong, a relative (brother-in-law) of the current president (Xi Jinping), for corruption. Guo was retired but still engaged in corrupt activities which apparently were particularly intense when Guo was himself very senior official (a member of the Politburo).

While the government has made a big deal about its ever-expanding war on corruption it is very hostile to anyone doing so on their own. So the government ordered its huge media/Internet censorship bureaucracy to try and keep the Panama Papers from the Chinese people. This was only partially successful. The Panama Papers revelations were no surprise to anyone in or outside China. For example, China recently ordered its 150,000 state owned or operated companies to not cooperate with international efforts to curb corruption in international trade. Chinese firms have long been extremely flexible when it came to dealing with foreigners. But a lot of this flexibility involves activity that is corrupt (illegal) under Chinese law. State controlled companies account for over 20 percent of Chinese GDP and even more jobs. These operations make far less profit than privately owned firms and are seen as a form of make-work to keep unemployment down. Worse, these inefficient firms are often run by very corrupt and inept officials and not allowed to go bankrupt. This is a growing embarrassment to the government because the economy remains stalled and most of the problems seem to be related to the corruption. Despite government efforts to suppress this “incorrect thinking” the popular attitude is; “fix the corruption and you fix the economy.”

The Chinese government declared in early 2016 that the anti-corruption campaign would not only continue but intensify. In the past mainly lower ranking Chinese Communist Party members were prosecuted but by 2015 it became clear that if the corrupt senior party members were not shut down the widespread corruption would survive and thrive. So prosecutors were told that no one was immune and throughout 2015 some of the most senior government and Chinese Communist Party officials were being prosecuted. This was unprecedented and if the investigators are allowed to prosecute all they find to be dirty there will be a lot of new faces in the partly leadership by the end of 2016. Then came the Panama Papers. Chinese leaders hate surprises like this. One thing that was really no surprise was the need to do something dramatic about the crippling corruption in China. For example in early 2015 the former head of all security in China (Zhou Yongkang) was indicted for corruption Chinese and many foreigners were shocked. Zhou Yongkang got away with all this because he was also a member of the Politburo, the committee of five to nine (currently seven) senior officials from which the president of China is chosen. Membership in the Politburo is the pinnacle of the career of a Chinese official. Not all Politburo members are corrupt, at least not personally. But most have kin who are and these family members take economic advantage of that the fact that their husband, brother, father, uncle, cousin (or whatever) is a senior official. The kin then profit from corrupt dealings. Zhou Yongkang was rare in that he got personally involved with corrupt deals and that is forbidden by law and custom (at least among senior officials). The government anti-corruption campaign is also going after the dirty kin, although many of these are given the opportunity to surrender all their ill-gotten gains, confess everything and stay clean.

President Xi Jinping has been behind this latest anti-corruption push and his approval ratings with most Chinese have risen sharply as a result. Xi knows that these prosecutions are not popular with the government bureaucracy so he orders his anti-corruption operatives to first go after those who are not known to be big supporters of Xi or, like Zhou, are doing things that even other corrupt officials do not approve of. This encourages more loyalty to Xi by senior officials and tolerance for his unpopular anti-corruption program. Many Chinese believed that the government (run by the Communist Party) would never actually go after senior Communist Party members. Yet many Communist Party officials have been quite open about the danger to Communist Party rule in China if the rampant corruption within the Communist Party was not addressed. Now it has been and Communist Party members see the possibility of serious damage to the survival of Communist Party rule in China.

Fixing The Fatally Flawed Military

Chinese leaders are trying to address the corruption as it applies to the military. While China has failed many times to suppress corruption in the military, as had the preceding imperial governments for thousands of years, the current effort is different. Past anti-corruption campaigns in the military were done quietly since the biggest offenders were senior officials. But modern corruption in the military involves a lot more people because there is more money involved and a lot more people because of the greater need for technical experts. There is also mass media, which with the appearance of cell phones and the Internet proved impossible for even a police state to completely control. So China is exploiting the technical angle by using the mass media to expose the extent, and damage done, by corruption in the military. Chinese military corruption in the past is often well documented but it was never something the government wanted publicized. That has changed and the current media effort is providing lots of historical examples of how Chinese troops were defeated because they had been crippled by corruption. This sends an encouraging signal to most Chinese who understand that this is a rare public (if indirect) admission of how corruption cripples the economy in general and in ways that most Chinese suffer from.

Unfortunately the “strenuous efforts” to reduce corruption in the military have been going on since the 1990s and the corruption, while reduced, still exists and, according to secret police reports, the actual combat capabilities of the military are still crippled by corruption. While these reports are secret, the evidence of continued military corruption is not. Those in the military (or who recently left) as well as civilians working for or with the military have all seen the corruption in action and know it is still there. The government controlled mass media keeps visible examples (avoidable accidents and blatant theft or abuse of power) from being widely distributed but cell phones and the Internet get a lot of that stuff, especially when there are pictures and video available, wide attention. In response the government publicizes its anti-corruption measures in the military. This includes new measures like special anti-corruption inspection teams for making surprise visits to military organizations and seeking out obvious or hidden evidence of corruption. These teams have tremendous authority and cannot be overruled by officers of any rank. Then there is yet another ban on military involvement in commercial activity. These bans began in the 1990s but officers and troops kept finding ways to get around it. So additional bans are issued that, at the very least, mean military personnel have to break more laws (and face more punishment if caught) if they continue their bad behavior. Another anti-corruption measure directed at the military is the Communist Party efforts since 2013 to increase party control over the military. The latest example of this was the April announcement that from now on president Xi will also serve as the peacetime commander-in-chief of the military. Such command is expected in wartime, when the president (who is also head of the ruling Chinese Communist Party) takes direct control. The latest change means the president takes more direct control of planning and even day-to-day military operations. This takes up time but Xi sees it as worthwhile.

An important reason for continued corruption in the military is the dramatic growth in military spending. China continues to increase its military spending but now blames that on growing foreign (mainly American) resistance to Chinese efforts to take possession of the South China Sea. In the last decade the United States has cut defense spending about four percent (to the current $595 billion) while China’s more than doubled (to the current $214 billion). Russian spending nearly doubled (to $66 billion) after dropping sharply in the 1990s and rebounding slowly. In the meantime Saudi Arabia moved past Russia and is now spending $87 billion a year. India is spending more each year and at its current $54 billion has passed France ($51 billion) and is about to surpass Britain ($55 billion.) After more than a decade of cuts European spending went up over one percent in 2015, mainly because East European nations are spending a lot more to deal with a growing threat from Russia. Even Germany is now increasing spending to deal with the Russian threat. But China remains the fastest growing new military power, at least in terms of money spent.

May 13, 2016: In another anti-corruption milestone the government revealed it had arrested Ling Jihua for corruption. Ling Jihua served Hu Jintao, the Chinese leader succeeded by the current president Xi. Ling Jihua was the equivalent of the American Presidential Chief of Staff. That is a very powerful position but Ling Jihua is accused of taking bribes, selling state secrets and general abuse of power. This is a big deal, especially if it results in prosecution, conviction and punishment.

May 5, 2016: Japan and Vietnam agreed to more cooperation in dealing with Chinese claims in the South China Sea. Japan will also provide more used ocean going patrol boats. Vietnam has already received six of these refurbished ships and found them very useful in keeping Chinese commercial ships from illegally entering Vietnamese waters.

April 26, 2016: A Japanese helicopter carrier visited the Philippines. This is the second time this month Japanese warships have paid a visit. This time it was the “Ise” one of a new class of Japanese warships. Ise was launched in 2009 and it is described as "helicopter-carrying destroyer". These are 188 meter (610 feet) long, 18,000 ton warships that operate up to 11 (mostly SH-60) helicopters from a full length flight deck. Although called a destroyer, it very much looks like an aircraft carrier. While its primary function is anti-submarine warfare, these ships also give Japan its first real power projection capability since 1945. These are the largest warships built in Japan since World War II. The Japanese constitution forbids it to have aircraft carriers, which is the main reason it is called a destroyer. That, and the desire to not make the neighbors anxious. East Asian nations still have bad memories about the last time Japan had lots of aircraft carriers. The Ise also has 16 Mk41 VLS (Vertical Launch System) cells for anti-aircraft and anti-ship missiles. There are also two 20mm Phalanx anti-missile cannon and two triple 12.75-inch torpedo mounts. There is a crew of 350 and a top speed of about 60 kilometers. Vertical takeoff jets like the Harrier and F-35B could also operate from the flight deck. There are two of these Hyuga class ships in service and larger ones planned. Ise remained in the Philippines for three days, taking part in some joint training with the Philippines Navy.

April 21, 2016: China and India have worked out and agreed to details of a hotline for commanders on both sides of the LAC (Line of Actual Control). Also known as the MacCartney-MacDonald Line the LAC is the unofficial border between India and China. The LAC is 4,057 kilometers long and is found in the Indian States of Ladakh, Kashmir, Uttarakhand, Himachal, and Arunachal. On the Chinese side it is mostly Tibet. China claims much territory that is now considered part of India. There have been hundreds of armed confrontations over the last few years as one side or the other accuses “foreign troops” of crossing the LAC. A hotline is nothing new for China. There has been one with North Korea since the 1950s. This enabled senior Chinese military leaders to pick up a phone and call their North Korean counterparts to quickly deal with any mutual problems. In 2008 China and the United States approved an agreement for a communications hotline followed in 2015 by a similar agreement between China and South Korea. A hotline like this is quicker and more accurate than waiting for the usual diplomatic channels to be used (and having to depend on the mass media in the meantime.)

April 17, 2016: For the first time a Chinese military aircraft (a four engine Y-8) landed on the newly built (on a recently created artificial island) air strip at Fiery Cross Reef. China claimed this was a humanitarian mission to transport a sick civilian to a hospital. Fiery Cross Reef is within Filipino territory as established by international treaty. Since 2014 China has rapidly gone from building platforms to bringing in dredging ships and piling up sand into new islands. Thus Hughes reef, which has had a 380 square meter (4,100 square feet) raised platform since 2004 is now being expanded (via dredging) to a 75,000 square meter (18 acre) island with an airstrip and buildings now under construction. Similar platform building and island creation is under way at other reefs (Johnson South, Gaven Reefs and Fiery Cross Reef) in the Spratlys. Chinese construction efforts accelerated in 2015 and continue.