China in the Shadows

[ProdigyofZen]

Re: China in the Shadows

You give the Chinese far, far too much credit. The explosions, while possibly triggered by some sort of accident, were enabled by an environment that exists due to corners being cut to line the pockets of certain people. You need look no further than the diethylene glycol-laced cough syrup, the melamine-laced baby formula, and the "gutter" oil. What kind of accidents could have caused such peculiar ingredients to be used in the making of those consumables?

Never ascribe to malice that which can be explained through incompetence.

[Milton Kuo]

Re: China in the Shadows

Never ascribe to malice that which can be explained through incompetence.

To be certain, the intent behind using diethylene glycol, melamine, and gutter oil was not to harm the people unwittingly consuming it. It was hoped that the substances would be a less expensive substitute for glycerol, milk protein, and butter. But there is some sort of malice in failing to explain that a substitute was made; that consumers are not getting what they think they're buying.

This holds true for all of the counterfeiting in China, too.

[Chris Coles]

Re: China in the Shadows

To be certain, the intent behind using diethylene glycol, melamine, and gutter oil was not to harm the people unwittingly consuming it. It was hoped that the substances would be a less expensive substitute for glycerol, milk protein, and butter. But there is some sort of malice in failing to explain that a substitute was made; that consumers are not getting what they think they're buying.

This holds true for all of the counterfeiting in China, too.

Then the question remains; are there ANY honest businesses in China? For example, I have a possible book that will need to be produced in that region for the enjoyment of the people of the region; are there any honest publishers in China, I must add; NOT owned by existing Western interests?

[don]

Re: China in the Shadows

Then the question remains; are there ANY honest businesses in China?

How Tethered to China are the Wall Street Banks?


By Pam Martens and Russ Martens: September 2, 2015

Shanghai’s Bull Statue on Its Bund Waterfront (left); Bull Statue in Lower Manhattan (right)

The Dow Jones Industrial Average plunged 469.6 points yesterday for a loss of 2.84 percent but Wall Street banks and trading firms took a far heavier bruising. Business media have been placing the blame for global stock market convulsions on China’s slowing economy, devaluation of its currency and seemingly unstoppable selloffs in its wildly inflated stock market. There would seem to be much more to this story than we know so far to explain the outsized fall in Wall Street bank stocks.

Yesterday, with the Dow losing 2.84 percent, the major names on Wall Street fared as follows: Citigroup, down 4.75 percent; Bank of America, down 4.65 percent; Wells Fargo, down 4.39 percent; JPMorgan Chase, down 4.13 percent; Morgan Stanley, down 3.86 percent; and Goldman Sachs, down 3.44 percent. The Blackstone Group, a private equity firm with significant involvement in China, lost 5.26 percent.

These outsized losses versus the Dow’s performance are becoming the norm among the Wall Street banks. In just three trading sessions on Thursday, August 20, Friday, August 21 and Monday, August 24, JPMorgan Chase lost 10.87 percent of its market cap or $27.18 billion. Despite JPMorgan CEO Jamie Dimon’s serial reminders of the bank’s “fortress balance sheet,” the market is unconvinced. One has to ask why.

One explanation making the rounds on Wall Street is that even if some of these Wall Street mega banks don’t have a lot of direct exposure to China, they do have a lot of direct exposure to loans they have made to countries and corporate customers who depend on China for earnings. China is the largest buyer of industrial commodities in the world and its economic slowdown and attendant collapse in commodity prices – from oils to metals to agricultural products – is making repayment of loans to banks look riskier.

The major Wall Street banks also have Prime Brokerage relationships with the major hedge funds, a fancy way of saying they provide margin and loans of securities for risky trading. A growing number of hedge funds have been taking a pounding as trading becomes more erratic.

Adding to the worries is the fact that more than 300 companies based in China trade in U.S. markets as American Depository Receipts (ADRs). Approximately 100 companies in China trade on U.S. stock exchanges with another estimated 200 trading over-the-counter in the United States. In 2014, Thomson Reuters estimated that the market capitalization of Chinese companies listed on just the New York Stock Exchange and Nasdaq Stock Market totaled more than $1.4 trillion. That’s a serious amount of money and there are concerns that U.S. market makers could take losses attempting to make a two-sided market in the shares during days when prices are whipsawing.

Another concern is that there may be Wall Street bank exposure to China that is off the radar screen. In February, Rolling Stone’s Spencer Woodman reported that a number of big Wall Street names like JPMorgan, Citigroup, UBS, and Merrill Lynch (the investment bank and stock brokerage arm of Bank of America) were underwriting bonds for real estate firms in China that were involved in forced evictions and relocations of Chinese residents in order to build large development projects. Woodman references a 2012 Amnesty International report which found that some forced evictions “resulted in deaths, beatings, harassment and imprisonment of residents who have been forced from their homes across the country in both rural and urban areas.”
Woodman reports further:

“Amid this heated debate, several overseas bond-selling documents show that some of America’s largest banks, including JPMorgan Chase, have helped to raise money for Chinese real estate companies that have expended considerable resources on demolishing buildings and ‘relocating’ people for their recent projects in China. (It’s important to note that the revelations in these documents do not necessarily point to the level of the injustices in the Amnesty report.) Two bond-selling documents, both marked ‘Strictly Confidential’ but uploaded to the website of Singapore’s stock exchange, state that, in 2012 alone, a company with bond sales facilitated by banks like JPMorgan Chase and Citigroup called Kaisa Holdings devoted more than $1 billion RMB, or $160 million USD, to ‘demolition and resettlement’ costs relating to its real estate projects. Other overseas bond documents show that in recent years, Bank of America and JPMorgan Chase helped to sell bonds for a Shanghai-based real estate firm called Future Holdings, which spent $131 million RMB on demolition and resettlement costs in 2011. Dispelling any notion that Future Holdings and Kaisa Holdings might be engaging in some sort of happy form of human relocation, both documents use similar language to make clear that disputes with original inhabitants of land they buy might cause ‘protests or legal or other proceedings.’”

Also in February of this year, the Wall Street Journal reported on the multi-year, ongoing investigation of JPMorgan Chase by the SEC and U.S. Justice Department over its hiring of relatives of Chinese government officials in a program known internally as “Sons and Daughters.” One email printed in the article quotes Fang Fang, JPMorgan’s former chief executive of China investment banking, describing a conversation he had at a 2008 dinner with a Chinese commerce ministry official who was appealing to Fang Fang to help save his son from being laid off at the bank. The email reads:

“The father indicated to me repeatedly that he is willing to go extra miles to help JPM [JPMorgan stock symbol] in whatever way we think he can. And I do have a few cases where I think we can leverage the father’s connection.”

[Chris Coles]

Re: China in the Shadows

How Tethered to China are the Wall Street Banks?


By Pam Martens and Russ Martens: September 2, 2015
Also in February of this year, the Wall Street Journal reported on the multi-year, ongoing investigation of JPMorgan Chase by the SEC and U.S. Justice Department over its hiring of relatives of Chinese government officials in a program known internally as “Sons and Daughters.” One email printed in the article quotes Fang Fang, JPMorgan’s former chief executive of China investment banking, describing a conversation he had at a 2008 dinner with a Chinese commerce ministry official who was appealing to Fang Fang to help save his son from being laid off at the bank. The email reads:

“The father indicated to me repeatedly that he is willing to go extra miles to help JPM [JPMorgan stock symbol] in whatever way we think he can. And I do have a few cases where I think we can leverage the father’s connection.”

Thanks Don; but that still does not answer the question; instead reinforces it.

[Chris Coles]

Re: China in the Shadows

How Tethered to China are the Wall Street Banks?


By Pam Martens and Russ Martens: September 2, 2015
Also in February of this year, the Wall Street Journal reported on the multi-year, ongoing investigation of JPMorgan Chase by the SEC and U.S. Justice Department over its hiring of relatives of Chinese government officials in a program known internally as “Sons and Daughters.” One email printed in the article quotes Fang Fang, JPMorgan’s former chief executive of China investment banking, describing a conversation he had at a 2008 dinner with a Chinese commerce ministry official who was appealing to Fang Fang to help save his son from being laid off at the bank. The email reads:

“The father indicated to me repeatedly that he is willing to go extra miles to help JPM [JPMorgan stock symbol] in whatever way we think he can. And I do have a few cases where I think we can leverage the father’s connection.”

Thanks Don; but that still does not answer the question; instead reinforces it.

[touchring]

Re: China in the Shadows

Thanks Don; but that still does not answer the question; instead reinforces it.

My impression is that aside from C, US banks (JPM, WFC, BAC) have very small exposure to the China market as compared to London listed banks like HSBC and Standard Chartered.

[don]

Re: China in the Shadows

Thanks Don; but that still does not answer the question; instead reinforces it.

Chris: thought it was more of a sketch, riffing off the high losses, than a path to any hard conclusion.

any thoughts on where those losses are coming from?

[don]

Warning: Hyperbolic Chamber Dead Ahead

Was Escobar denied a toy gun as a kid? Is his car festooned with Ridin' the Silk Road bumper stickers. Is there a child in the car?

Say hello to China’s new toys: Escobar

BY PEPE ESCOBAR

China’s aggression is destabilizing its neighbors in the South China Sea. China never stops cheating on world trade. China’s stock market is a trap for investors. China’s devaluation of the yuan is a dirty trick. China is imploding. President Xi Jinping does not have any credibility left. And China is a major threat because the Pentagon said so.

Whatever.

Cue to clear blue skies over Beijing – engineered with a hefty dose of political will. Lots of glittering toys – aerial and terrestrial. Guests from all over the world (absent the predictable Western suspects). A made-for-TV spectacular dwarfing the Oscars (no teary-eyed acceptance speeches!) What’s not to like?

And then, there it was, strutting its lethal stuff on the Tiananmen catwalk: the Dongfeng-21D. A cracking land-based anti-ship ballistic missile capable of destroying one of those multibillion-dollar US aircraft carriers with a single hit.

No wonder China’s parade celebrating the end of WWII had to be demonized to oblivion.

China’s “say hello to my new toys” show had plenty of co-stars. The DF-5B – an ICBM designed to carry nuclear warheads. The DF-26 intermediate range ballistic missile (IRBM), a.k.a. the Guam Killer, as in capable of wreaking havoc over the notorious U.S. Pacific Ocean base. The HQ-9, China’s third generation surface-to-air missile system. Lots of cool drones. Here’s a (partial) rundown of the greatest hits, and a few misses such as the J-31, China’s fight generation stealth fighter.

The screenplay included priceless dialogue. As in Xi Jinping zooming past the troops, shouting, “Hello comrades! You’ve worked hard!” — to the unison response, “Hello leader! We serve the people!”

No wardrobe fails as Xi’s wife, glamour queen Peng Liyuan, once again ripped, with a tsunami of online shoppers instantly able to snap up her drop-dead red parade outfit on Taobao, China’s answer to eBay.

And then there were those rows and rows of impeccably groomed soldiers saluting Xi with “Follow the Party! Fight to win! Forge exemplary conduct!” What sort of exemplary conduct will apply to 300.000 of their colleagues — soon to be demobilized as Xi revamps the PLA — is open to speculation.

The downsizing of the army to the benefit of allocating equal resources to army, navy and air force is part of Xi’s centralized power manner of governing — as he leads no less than eight extremely high-level policy-making committees, from military reform and cyber-security to short-term financial policy and macro economic planning.

It’s Xi vs. Reuters

China’s V-Day parade specifically celebrated “the 70th anniversary of China’s victory in the War of Resistance Against Japanese Aggression.”

Predictably none of Japan’s TV networks – NHK included – showed the parade live. Japan’s Prime Minister Shinzo Abe, officially invited, snubbed it – in line with the White House and what the State Department ordered the European minions. Here I examined how the juvenihilist Western snubbing poses as “diplomacy.”

The People’s Daily was not off the mark when it stressed the parade, “will give Chinese people the opportunity to reacquaint themselves with the invaluable lessons that history teaches and serve as a tremendous fillip to the confidence of 1.3 billion people in looking at the country’s future.”

That was a quite Chinese way to imply that what happened decades ago, as part of the “century of humiliation,” when China was weak and divided, won’t happen again. And those gleaming toys exist for that purpose.

Even more crucial is what Xi said: “That war inflicted over 100 million military and civilian casualties. China suffered over 35 million casualties and the Soviet Union lost over 27 million lives. War is like a mirror. Looking at it helps us better understand the value of peace.”

Once again, in a very Chinese way, Xi did not have to dwell on the fact that only the Atlanticists are allowed to celebrate the victory over fascism and Nazism. When Russia does it — as in the May 9 parade in Moscow — or China does it this Thursday in Beijing, they are branded as “militaristic,” “nationalistic,” or simply “a threat.”

Xi also said that the world today badly needs a sense of global community, and mutual respect and prosperity. Tell that to the exceptionalists. He emphasized China will remain committed to “peaceful development” – the official motto before Xi’s own “Chinese Dream.” And once again, he made it clear, “China will never seek hegemony or expansion. It will never inflict its past suffering on any other nation.”

Perhaps the leader of the soon-to-be top economy on the planet was … lying? Were these sweet words masking a “threat”? Leave it to Reuters to enlighten the whole planet: “For Xi, the parade is a welcome distraction from the country’s plunging stock markets, slowing economy and recent blasts at a chemical warehouse that killed at least 160 people.”

The dogs of fear/envy/resentment predictably barked as the Chinese victory parade gloriously passed.


Enough already - the Escobar Antidote lies straight ahead, where people disappear by the minute everywhere:


As Shanghai Stock Market Tanks, China Makes Mass Arrests: ‘You Could Disappear at any Time’

By Pam Martens and Russ Martens: September 3, 2015

The Shanghai stock exchange, which has been creating global stock market convulsions while trimming 39 percent off its value since June, will be closed for the next two days. The Chinese holiday started on Thursday in Beijing with a big parade and show of military might to commemorate the 70thanniversary of V-Day and the defeat of Japan in World War II.

The massive military pageantry and display of weaponry was widely seen as a move by President Xi Jinping to reassert his authoritarian rule in the wake of a sputtering domestic economy, $5 trillion in value shaved off the stock market in a matter of months, and the need to devalue the country’s currency on August 11 in a bid to boost exports.

Tragically, what has received far less attention than melting China stocks is the mass arrests of dissidents, human rights activists, attorneys and religious leaders. More recently, the government has begun to “detain” journalists and finance executives in an apparent attempt to scapegoat them for the stock market’s selloff.

The mass arrests began in July, the same time the China stock market started to crater in earnest. Last evening, the Financial Times had this to say about the disappearance of Li Yifei, a prominent hedge fund chief at Man Group China.

“The whereabouts of Ms Li remained unclear on Wednesday. Her husband, Wang Chaoyong, told the Financial Times that her meetings with financial market authorities in Beijing had concluded, and ‘she will take a break for a while.’ ”

Bloomberg Business had previously reported that Li Yifei was being held by the police as part of a larger roundup of persons they wanted to interview regarding the stock market rout.

The reaction to these authoritarian sweeps has worsened the stock market situation in China. Volume on the Shanghai market, according to the Financial Times, has skidded from $200 billion on the heaviest days in June to just $66 billion this past Tuesday.

On Tuesday afternoon, a Wall Street Journal reporter was interviewed by phone from Beijing on the business channel, CNBC. He said “waves” of arrests were taking place. That interview followed an article in the Wall Street Journal on Monday, which appeared with no byline (perhaps for the safety of the Beijing-based reporter) that shed more light on the arrests:

“Chinese police on the weekend began rounding up the usual suspects, which in this case are journalists, brokers and analysts who have been reporting stock-market news. Naturally, the culprits soon confessed their noncrimes on national television. A reporter for the financial publication Caijing was shown on China Central Television on Monday admitting that he had written an article with ‘great negative impact on the market.’ His offense was reporting that authorities might scale back official share-buying, which is what they soon did. On Sunday China’s Ministry of Public Security announced the arrest of nearly 200 people for spreading rumors about stocks and other incidents.”

Also on Tuesday, David Saperstein, the U.S. Ambassador-at-large for religious freedom, publicly demanded that China release attorney Zhang Kai and religious leaders who had been swept up by the government the very day before Saperstein had been scheduled to meet with them. In an interview with the Associated Press, Saperstein called the state actions “outrageous,” particularly since he had been invited to China to observe religious freedom in the country.

Christianity is growing rapidly in some regions of China and strong religious leaders or movements are seen as a threat to communist party rule. Religious leaders had been protesting the state’s removal of crosses from the tops of churches.

On July 22, the New York Times reported that over 200 human rights lawyers and their associates had been detained. Using the same humiliating tactic as used recently against the financial journalist, The Times reports that some of the “lawyers have been paraded on television making humiliating confessions or portrayed as rabble-rousing thugs.” One of the lawyers who was later released, Zhang Lei, told The Times: “This feels like the biggest attack we’ve ever experienced. It looks like they’re acting by the law, but hardly any of the lawyers who disappeared have been allowed to see their own lawyers. Over 200 brought in for questioning and warnings — I’ve never seen anything like it before.”

U.S. Ambassador to the United Nations, Samantha Power, is also demanding the release of female prisoners in China, including Wang Yu, who was arrested with her husband in July.

According to a detailed interview that Wang Yu gave the Guardian prior to her detention and disappearance on July 9, people are being arrested, grabbed off the street, sent to mental hospitals or detention centers. She said: ‘You could disappear at any time.’

As a documentary made by the Guardian shows, one of Wang Yu’s cases involved the alleged rape of six underage girls by the headmaster of their school. Wang Yu took the case and organized a protest, handing out literature on child protection laws to pedestrians and people passing by in automobiles.

Parents of the young girls who had originally consented to their legal representation soon withdrew the consent, saying they were being monitored by the government and had been told not to speak to journalists or lawyers. Wang Yu said that cases like this are happening every minute and everywhere in China.

Yesterday, the Mail & Guardian reported that Wang Yu’s whereabouts remain a mystery.

On August 18, Reuters reported that Chinese government officials “had arrested about 15,000 people for crimes that ‘jeopardized Internet security,’ as the government moves to tighten controls on the Internet.”

Against this horrific backdrop, China’s authoritarian President Xi Jinping is slated to visit the United States late this month for a meeting with President Obama and state dinner at the White House. According to the Washington Post’s David Nakamura, a bipartisan group of 10 senators sent President Obama a letter in August calling on him to raise the issue of human rights abuses when Xi visits. The Post published the following excerpt from the letter:

“We expect that China’s recent actions in the East and South China Seas, economic and trade issues, climate change, as well as the recent cyber-attacks, will figure prominently in your discussions. While these issues deserve a full and robust exchange of views, so too do human rights. Under President Xi, there has been an extraordinary assault on rule of law and civil society in China.”

Given the delicacy with which President Obama is likely to broach this subject with Xi, a mass demonstration outside of the White House by human rights activists and lawyers in this country during the White House visit might send a more powerful message. Last year, U.S. consumers and businesses purchased $466.8 billion in goods from China. Should these human rights abuses continue, China should be made aware that consumers in the U.S. know how to check labels for country of origin.

We have an Ambassador-at-Large for Religious Freedom? Who knew . . . .

[don]

Re: Warning: Hyperbolic Chamber Dead Ahead

Showtime: China Reveals Two 'Carrier-Killer' Missiles
There was nothing subtle about the parade or its showcasing of Chinese military hardware."

Andrew S. Erickson
September 3, 2015

DF-21D anti-ship ballistic missile





Yesterday’s Beijing V-Day parade [4] addressed multiple audiences [5]. Among them, clearly—the U.S. Navy, the U.S. military writ large and their regional allied and partner counterparts. After years of foreign speculation and surprising skepticism [6] about an anti-ship ballistic missile (ASBM), China has for the first time officially revealed two variants: the DF-21D [7] and DF-26 [8].

There were other hardware firsts, with DF-16 medium-range ballistic missile (MRBM) [9] and YJ-12 anti-ship cruise missile (ASCM) [10] also revealed for the first time (the latter an air-launched missile on a display truck for parading purposes). The DF-5B ICBM officially confirmed as a “MIRV-ed nuclear missile” (分导核导弹), with multiple independently targetable reentry vehicles [11]that can greatly complicate its intercept by ballistic missile defenses. What makes these displays particularly significant: all the missiles on parade are currently in PLA service. That explains why China’s DF-41 ICBM [12] and YJ-18 ASCM [13] were nowhere to be found—they are not yet deployed. Otherwise, by raising concerns without demonstrating credible capabilities, China would risk reaping “the onus without the bonus.” A tremendous non-hardware-related announcement provided greater context: Xi Jinping’s statement in his speech at the parade, “I announce that China will reduce military personnel numbers by 300,000 [14].” But what is arguably most significant in hardware terms is that Beijing used this high-profile occasion to reveal not one but two different ASBMs—both already deployed by China’s Second Artillery Force (SAF).

Debuting Two New ASBMs Unmistakably

There was nothing subtle about the parade or its showcasing of Chinese military hardware. First, precise details of the weapons showcased and their formations were available on the Internet several days before the big event [15]. Second, all major missiles had large English-language designators stenciled in bright white—even the most ophthalmologically challenged foreign observes could not possibly miss the deterrent message.

The parade, together with official commentary, remains available on YouTube [16], and from behind China’s Great Firewall [17] for those who can’t access such foreign social media. As official Chinese-language commentary streamed on the state television channel CCTV-1, and sixteen DF-21D MRBMs rolled by in precise formation on their transporter-erector-launchers (TELs), the missile was described as an “assassin’s mace weapon” (杀手锏武器) with the ability to strike “targets on water” (水面目标). The set of sixteen DF-21Ds was further described as the “Conventional Missile Second Formation. DF-21D, road mobile anti ship ballistic missile, the assassin’s mace for maritime asymmetric warfare” (常规导弹第二方队, DF21丁是打击舰船目标的路基弹道导弹, 是我军海上非对称作战的杀手锏武器). The DF-21Ds appeared to have a longer, pointier nose cap than the DF-21C variants displayed in the previous parade.

Official commentary states that the longer-range DF-26 intermediate-range ballistic missile (IRBM) is “capable of nuclear and conventional strike” (核常兼备). This dual-payload term is particularly interesting, and the Janus-faced concept has clearly been contemplated by Chinese strategists and technicians alike for some time. In September 2006, in Xiamen, China, at the “10th Program for Science and National Security Studies Beijing Seminar on International Security” conference, I remember an unattributed paper on “核常兼备” appearing mysteriously on the publications table. That conference was co-sponsored by the Institute of Applied Physics and Computational Mathematics (IAPCM), a reclusive organization closely affiliated with China’s nuclear-weapons industry [18].

Official commentary elaborated that the DF-26 is “capable of targeting large- and medium-sized targets on water” (打击大中型水面目标). This “Guam Killer [19]” missile is credited with 3,000-4,000-km (1,800-2,500 mile) range, sufficient to strike U.S. bases on Guam. The set of sixteen DF-26 missiles was further described as the “Conventional-/Nuclear-capable formation. The DF-26 can perform medium-to-long-range precision attack on both land and large-to-medium-sized maritime targets. A new weapon for strategic deterrence” (核常兼备导弹方队, 东26能对陆上重要目标和海上大中型舰船实施中远程精确打击, 是我军战略威慑力量体系中的新型武器).

The ASBMs’ Significance

China’s V-Day military parade has two major audiences: domestic and foreign. With regard to foreign audiences, an important part of its purpose is to reveal enough about Chinese capabilities to enhance deterrence and persuade potential adversaries to—at a minimum—treat Beijing’s concerns with the utmost care. To this end, Beijing showcased new weapon systems that have not been displayed publicly before. Likely due to not only the historic weight of the occasion, but also Xi’s need for tangible accomplishments to compensate for recent economic problems and ongoing risks in that regard, China leaned extra-far forward and displayed these armaments.

Mark Stokes of the Project 2049 Institute has offered further analysis, suggesting that all missiles displayed are operational at specific basing locations, and that China is keen to show them off for both internal and external purposes:

“The six [SAF] formations [in the parade] were led by a corps deputy leader-grade officer from each of the six SAF missile bases: Base 51 (DF-21D); Base 52 (DF-15B and DF-16); Base 53 (DH-10A); Base 54 (DF-26); Base 55 (DF-5B); and Base 56 (DF-31A). All these systems entered the operational inventory between 2010 and 2013—or perhaps even earlier in the case of the DF-5B and DF-31A, which was included in the 2009 parade. In 2009, representatives from the brigades equipped with the particular missile system led the formations. So it seems that China’s Central Military Commission wanted to raise the level of representation and spread the glory around to each missile base. Additionally, the parade gave some pretty good hints about which missile bases/brigades these various missile systems are assigned to. So I’d give the PLA some credit for progress in transparency.”

News of the DF-21D’s development has emerged over roughly two decades, and it has been analyzed extensively in open-source publications. Inspired by a continentalist desire to “use the land to control the sea [20]” (一陆之海), Beijing’s ASBM development was initially catalyzed by its inability to respond adequately to what it decried as unacceptable U.S. intervention in the 1995-96 Taiwan Strait Crisis, and what it misperceived as the intentional bombing of its embassy in Belgrade by the United States during the Kosovo War in 1999.

In developing the DF-21D, Chinese engineers drew quite heavily on concepts and technologies from the U.S. MGM-31B [21]Pershing II [21]theater ballistic missile fitted with maneuvering reentry vehicles (MaRV). [21] The highly accurate, terminally maneuvering American missile was similar enough to be highly useful for China’s purposes—although substantial modifications of its control surfaces, sensor interface and other aspects were almost certainly required to produce a missile capable of hitting a noncooperative moving sea-surface target. As ASBM efforts progressed, in a not uncommon instance of China being more transparent in Chinese, relevant Chinese-language publications multiplied [22] throughout the late 1990s, dipped in a classic “bathtub-shaped” pattern from 2004 to 2006 at a critical point in ASBM development and component testing [23], and rose sharply thereafter [24] as China headed towards initial deployment in small numbers beginning in 2010 [25].

According to its 2004 handbook, the SAF has thought seriously about at least five ways to use ASBMs against U.S. carrier strike groups [26], at least at the conceptual level:
– “Firepower harassment [strikes]” (火力袭扰), which involve hitting “carrier battle groups.”

– “Frontal firepower deterrence” (前方火力慑阻), which involves firing intimidation salvos in front of a CSG’s advance “to serve as a warning.”

– “Flank firepower expulsion” (翼侧火力驱赶), which combines interception of a CSG by PLAN forces with intimidation salvos “launched toward the enemy carrier battle group opposite our relatively threatened flank” designed to direct it away from the vulnerable areas where China feels most threatened.

– “Concentrated fire assault” (集火突击), which entails targeting the carrier as a center of flight operations:

“When many carrier-borne aircraft are used in continuous air strikes against our coast, in order to halt the powerful air raids, the enemy’s core carrier should be struck as with a ‘heavy hammer.’ The conventional missile forces should be a select group carrying sensitive penetrating submunitions and, using the ‘concentrated firepower assault’ method, a wide-coverage strike against the enemy’s core carrier should be executed, striving to destroy the enemy’s carrier-borne planes, the control tower [island] and other easily damaged and vital positions.”

– “Information assault” (信息攻击), which entails attacking the carrier strike group’s command and control system electromagnetically to disable it:

“Directed against the enemy’s command and control system or weak links in the Aegis system, conventional missiles carrying antiradiation submunitions or electromagnetic pulse (EMP) submunitions can be used when enemy radar is being used and their command systems are working, with antiradiation submunitions striking radar stations and EMP submunitions paralyzing the enemy’s command and control system.”

Obviously, the above suggests tremendous potential for dangerous misunderstanding and escalation!

According to the Pentagon’s 2015 annual PLA report, the CSS-5 Mod 5 (DF-21D) ASBM China has “fielded” in small numbers “gives the PLA the capability to attack ships in the western Pacific Ocean [27]” “within 900 nm [1,667 km] of the Chinese coastline.”

While much additional research is still needed, the DF-21D has already received detailed coverage. I, for one, was so interested that I published a book on it: Chinese Anti-Ship Ballistic Missile Development: Drivers, Trajectories, and Strategic Implications [28]. The more-recently-developed DF-26, by contrast, has received far less coverage thus far. It is long overdue for greater attention in the open-source analytical community.

None of this tells us how China’s ASBMs would perform in the unfortunate event of conflict. First, it remains unclear how well China would be able to target the DF-26, particularly towards the far end of its range. By parading the DF-21D and DF-26, Beijing is indicating that the missiles themselves have been tested carefully and accepted into military service as operational hardware. The reconnaissance strike complex that supports them, by contrast, remains a work in progress. But it is clearly being developed rapidly, with new satellites of multiple types devoted to remote sensing and other relevant missions being launched frequently. On August 27, for instance, China launched the Yaogan [29]-27 remote sensing satellite [29]. In fact, well over twenty-seven [30]Yaogan [30] satellites have been lofted [30], with some number of designators covering three-satellite triplets apparently optimized for triangulating surface ship location in a manner akin to that of the U.S. Naval Ocean Surveillance System [31]. Open-source analysts are still waiting for evidence of China testing an ASBM comprehensively against a noncooperative moving maritime target.

Second, even if China’s ASBMs are completely functional at all stages of their “kill chain,” they could still be defeated completely by foreign countermeasures. Pointing out that the United States has significant countermeasures against China’s ASBM and other missiles, Harry Kazianis describes the DF-21D as more likely to be “a great complicator [32]” than a “game changer[33].”

Supporting China’s New Hardware

Looking forward, China’s new ASBMs are only as effective as the PLA’s ability to actually use them, in conjunction with related systems. With his unprecedented emphasis on ensuring that China’s military will be able to—if necessary—fight and win as its Party masters deem necessary, Xi is working to improve its ability to use newly acquired hardware effectively under realistic conditions. Achieving the necessary enhancement of command, control and integration requires major organizational reform—hence Xi’s announcement that 300,000 troops (likely mostly ground forces) need to be cut.

This will be the fourth round of PLA downsizing and restructuring, following previous efforts in 1985, 1997 and 2002. Each iteration enhanced effectiveness while freeing resources for further development. Yet ground force dominance was left largely untouched; changing that is now prioritized. The outline of reforms now under discussion was outlined in the Third Plenum “Decision to Deepen Reforms [34]” in November 2013—the first time military reform had its own section in such a document, and articulated at a conference Xi held that December.

How might PLA restructuring play out in practice? Clarion calls for major change in official PLA media [35] make it clear that military leaders must prepare to implement reforms expeditiously, but characteristically lack specifics as to where that will take the military. A less authoritative but analytically logical article in Duowei News [36] predicts that reforms will be announced and implemented vigorously after the military parade. It suggests that the PLA will be restructured top-to-bottom to achieve some of the benefits of a U.S.-style military organization, and that China’s current Seven Military Regions will be consolidated and reconfigured considerably. The ground forces will be downsized further and receive their own headquarters to become a subordinate service, while the Navy and Air Force will be expanded. The SAF, which controls land-based Chinese ballistic missiles, including its DF-21D and DF-26 ASBMs, will certainly not suffer any demotion in the process.

Andrew Erickson [37] is an Associate Professor at the U.S. Naval War College.


Links:
[1] http://www.nationalinterest.org/feat...missiles-13769
[2] http://www.nationalinterest.org/prof...rew-s-erickson
[3] http://twitter.com/share
[4] http://www.andrewerickson.com/2015/0...dated-version/
[5] http://fortune.com/2015/09/03/what-b...parade-starts/
[6] http://www.usni.org/magazines/procee...10-02/now-hear
[7] http://news.xinhuanet.com/english/ph...4584756_12.htm
[8] http://cache2.asset-cache.net/gc/486...eTSKqgEg%3D%3D
[9] http://www.popsci.com/chinas-newest-...-vj-day-parade
[10] http://nationalinterest.org/feature/...9s-radar-10446
[11] https://en.wikipedia.org/wiki/Multip...eentry_vehicle
[12] http://nationalinterest.org/feature/...allistic-10336
[13] http://ndupress.ndu.edu/Media/News/N...elopments.aspx
[14] http://en.people.cn/n/2015/0903/c90000-8945363.html
[15] http://www.kankanews.com/a/2015-08-31/0037070985.shtml
[16] https://www.youtube.com/watch?v=1BeUQlzAsgE
[17] http://news.163.com/15/0903/13/B2JDO...46BE.html?bdsj
[18] https://en.wikipedia.org/wiki/Instit...al_Mathematics
[19] http://asian-defence-news.blogspot.c...r-missile.html
[20] https://andrewserickson.files.wordpr...utumn-aspx.pdf
[21] http://www.jamestown.org/programs/ch...c#.Veg5QJ1Vikp
[22] http://www.andrewerickson.com/2011/0...what-it-means/
[23] http://www.jamestown.org/single/?no_...b#.Veg6d51Viko
[24] http://www.andrewerickson.com/wp-con...n_20070329.pdf
[25] http://www.chinasignpost.com/wp-cont...2010-12-26.pdf
[26] http://www.jamestown.org/single/?no_...1#.Veg7-J1Viko
[27] http://www.defense.gov/Portals/1/Doc...wer_Report.pdf
[28] http://www.andrewerickson.com/wp-con...stown_2013.pdf
[29] http://spaceflightnow.com/2015/08/27...ed-into-orbit/
[30] https://en.wikipedia.org/wiki/Yaogan
[31] https://en.wikipedia.org/wiki/Naval_...illance_System
[32] http://www.nationalinterest.org/blog...-us-navy-13765
[33] http://www.usni.org/magazines/procee...e-game-changer
[34] https://books.google.com/books?id=8r...%80%9D&f=false
[35] http://www.81.cn/jwgd/2015-09/01/content_6658726.htm
[36] http://china.dwnews.com/news/2015-08-28/59677757.html
[37] http://www.andrewerickson.com/
[38] https://commons.wikimedia.org/wiki/F...men_Square.jpg
[39] http://www.nationalinterest.org/tag/china
[40] http://www.nationalinterest.org/tag/military
[41] http://www.nationalinterest.org/tag/parade
[42] http://www.nationalinterest.org/topic/security
[43] http://www.nationalinterest.org/region/asia

[jk]

Re: Warning: Hyperbolic Chamber Dead Ahead

so reduce ground forces and increase emphasis on strategic depth of defense and force projection.

[don]

Re: Warning: Hyperbolic Chamber Dead Ahead

so reduce ground forces and increase emphasis on strategic depth of defense and force projection.

Yes, if they can get past their own MIC, inter-service rivalries, plus 300k newly unemployed soldiers.

[jk]

Re: Warning: Hyperbolic Chamber Dead Ahead

Yes, if they can get past their own MIC, inter-service rivalries, plus 300k newly unemployed soldiers.

i think the reduction of 300k soldiers is a very big deal, especially in light of the imbalance of young males and females. with the chinese economy slowing i don't know where or how they create enough jobs. but others here know a lot more than i about china and its economy. the little bit i know would imply that they must create a better social safety net to give their citizens the reassurance they need to spend more of their savings.

[thriftyandboringinohio]

Re: Warning: Hyperbolic Chamber Dead Ahead

... they must create a better social safety net to give their citizens the reassurance they need to spend more of their savings.

+1 jk.

It's easy to overlook the large economic benefit of a generous social safety net.
It encourages people to take economic risks like investing, or starting companies, or changing careers.

When the wort-case scenario is well defined and acceptable, smart people will give it a go.
It's those very same best-and- brightest who won't take a chance without a social safety net. They see the unacceptable risk/reward ratio.

It's well worth the cost of the scoundrels who game the system to sit on their butts and eat for free.

[Chris Coles]

Re: Warning: Hyperbolic Chamber Dead Ahead

Was Escobar denied a toy gun as a kid? Is his car festooned with Ridin' the Silk Road bumper stickers. Is there a child in the car?

Say hello to China’s new toys: Escobar

BY PEPE ESCOBAR

China’s aggression is destabilizing its neighbors in the South China Sea. China never stops cheating on world trade. China’s stock market is a trap for investors. China’s devaluation of the yuan is a dirty trick. China is imploding. President Xi Jinping does not have any credibility left. And China is a major threat because the Pentagon said so.

Whatever.

Cue to clear blue skies over Beijing – engineered with a hefty dose of political will. Lots of glittering toys – aerial and terrestrial. Guests from all over the world (absent the predictable Western suspects). A made-for-TV spectacular dwarfing the Oscars (no teary-eyed acceptance speeches!) What’s not to like?

And then, there it was, strutting its lethal stuff on the Tiananmen catwalk: the Dongfeng-21D. A cracking land-based anti-ship ballistic missile capable of destroying one of those multibillion-dollar US aircraft carriers with a single hit.

No wonder China’s parade celebrating the end of WWII had to be demonized to oblivion.

China’s “say hello to my new toys” show had plenty of co-stars. The DF-5B – an ICBM designed to carry nuclear warheads. The DF-26 intermediate range ballistic missile (IRBM), a.k.a. the Guam Killer, as in capable of wreaking havoc over the notorious U.S. Pacific Ocean base. The HQ-9, China’s third generation surface-to-air missile system. Lots of cool drones. Here’s a (partial) rundown of the greatest hits, and a few misses such as the J-31, China’s fight generation stealth fighter.

The screenplay included priceless dialogue. As in Xi Jinping zooming past the troops, shouting, “Hello comrades! You’ve worked hard!” — to the unison response, “Hello leader! We serve the people!”

No wardrobe fails as Xi’s wife, glamour queen Peng Liyuan, once again ripped, with a tsunami of online shoppers instantly able to snap up her drop-dead red parade outfit on Taobao, China’s answer to eBay.

And then there were those rows and rows of impeccably groomed soldiers saluting Xi with “Follow the Party! Fight to win! Forge exemplary conduct!” What sort of exemplary conduct will apply to 300.000 of their colleagues — soon to be demobilized as Xi revamps the PLA — is open to speculation.

The downsizing of the army to the benefit of allocating equal resources to army, navy and air force is part of Xi’s centralized power manner of governing — as he leads no less than eight extremely high-level policy-making committees, from military reform and cyber-security to short-term financial policy and macro economic planning.

It’s Xi vs. Reuters

China’s V-Day parade specifically celebrated “the 70th anniversary of China’s victory in the War of Resistance Against Japanese Aggression.”

Predictably none of Japan’s TV networks – NHK included – showed the parade live. Japan’s Prime Minister Shinzo Abe, officially invited, snubbed it – in line with the White House and what the State Department ordered the European minions. Here I examined how the juvenihilist Western snubbing poses as “diplomacy.”

The People’s Daily was not off the mark when it stressed the parade, “will give Chinese people the opportunity to reacquaint themselves with the invaluable lessons that history teaches and serve as a tremendous fillip to the confidence of 1.3 billion people in looking at the country’s future.”

That was a quite Chinese way to imply that what happened decades ago, as part of the “century of humiliation,” when China was weak and divided, won’t happen again. And those gleaming toys exist for that purpose.

Even more crucial is what Xi said: “That war inflicted over 100 million military and civilian casualties. China suffered over 35 million casualties and the Soviet Union lost over 27 million lives. War is like a mirror. Looking at it helps us better understand the value of peace.”

Once again, in a very Chinese way, Xi did not have to dwell on the fact that only the Atlanticists are allowed to celebrate the victory over fascism and Nazism. When Russia does it — as in the May 9 parade in Moscow — or China does it this Thursday in Beijing, they are branded as “militaristic,” “nationalistic,” or simply “a threat.”

Xi also said that the world today badly needs a sense of global community, and mutual respect and prosperity. Tell that to the exceptionalists. He emphasized China will remain committed to “peaceful development” – the official motto before Xi’s own “Chinese Dream.” And once again, he made it clear, “China will never seek hegemony or expansion. It will never inflict its past suffering on any other nation.”

Perhaps the leader of the soon-to-be top economy on the planet was … lying? Were these sweet words masking a “threat”? Leave it to Reuters to enlighten the whole planet: “For Xi, the parade is a welcome distraction from the country’s plunging stock markets, slowing economy and recent blasts at a chemical warehouse that killed at least 160 people.”

The dogs of fear/envy/resentment predictably barked as the Chinese victory parade gloriously passed.


Enough already - the Escobar Antidote lies straight ahead, where people disappear by the minute everywhere:


As Shanghai Stock Market Tanks, China Makes Mass Arrests: ‘You Could Disappear at any Time’

By Pam Martens and Russ Martens: September 3, 2015

The Shanghai stock exchange, which has been creating global stock market convulsions while trimming 39 percent off its value since June, will be closed for the next two days. The Chinese holiday started on Thursday in Beijing with a big parade and show of military might to commemorate the 70thanniversary of V-Day and the defeat of Japan in World War II.

The massive military pageantry and display of weaponry was widely seen as a move by President Xi Jinping to reassert his authoritarian rule in the wake of a sputtering domestic economy, $5 trillion in value shaved off the stock market in a matter of months, and the need to devalue the country’s currency on August 11 in a bid to boost exports.

Tragically, what has received far less attention than melting China stocks is the mass arrests of dissidents, human rights activists, attorneys and religious leaders. More recently, the government has begun to “detain” journalists and finance executives in an apparent attempt to scapegoat them for the stock market’s selloff.

The mass arrests began in July, the same time the China stock market started to crater in earnest. Last evening, the Financial Times had this to say about the disappearance of Li Yifei, a prominent hedge fund chief at Man Group China.

“The whereabouts of Ms Li remained unclear on Wednesday. Her husband, Wang Chaoyong, told the Financial Times that her meetings with financial market authorities in Beijing had concluded, and ‘she will take a break for a while.’ ”

Bloomberg Business had previously reported that Li Yifei was being held by the police as part of a larger roundup of persons they wanted to interview regarding the stock market rout.

The reaction to these authoritarian sweeps has worsened the stock market situation in China. Volume on the Shanghai market, according to the Financial Times, has skidded from $200 billion on the heaviest days in June to just $66 billion this past Tuesday.

On Tuesday afternoon, a Wall Street Journal reporter was interviewed by phone from Beijing on the business channel, CNBC. He said “waves” of arrests were taking place. That interview followed an article in the Wall Street Journal on Monday, which appeared with no byline (perhaps for the safety of the Beijing-based reporter) that shed more light on the arrests:

“Chinese police on the weekend began rounding up the usual suspects, which in this case are journalists, brokers and analysts who have been reporting stock-market news. Naturally, the culprits soon confessed their noncrimes on national television. A reporter for the financial publication Caijing was shown on China Central Television on Monday admitting that he had written an article with ‘great negative impact on the market.’ His offense was reporting that authorities might scale back official share-buying, which is what they soon did. On Sunday China’s Ministry of Public Security announced the arrest of nearly 200 people for spreading rumors about stocks and other incidents.”

Also on Tuesday, David Saperstein, the U.S. Ambassador-at-large for religious freedom, publicly demanded that China release attorney Zhang Kai and religious leaders who had been swept up by the government the very day before Saperstein had been scheduled to meet with them. In an interview with the Associated Press, Saperstein called the state actions “outrageous,” particularly since he had been invited to China to observe religious freedom in the country.

Christianity is growing rapidly in some regions of China and strong religious leaders or movements are seen as a threat to communist party rule. Religious leaders had been protesting the state’s removal of crosses from the tops of churches.

On July 22, the New York Times reported that over 200 human rights lawyers and their associates had been detained. Using the same humiliating tactic as used recently against the financial journalist, The Times reports that some of the “lawyers have been paraded on television making humiliating confessions or portrayed as rabble-rousing thugs.” One of the lawyers who was later released, Zhang Lei, told The Times: “This feels like the biggest attack we’ve ever experienced. It looks like they’re acting by the law, but hardly any of the lawyers who disappeared have been allowed to see their own lawyers. Over 200 brought in for questioning and warnings — I’ve never seen anything like it before.”

U.S. Ambassador to the United Nations, Samantha Power, is also demanding the release of female prisoners in China, including Wang Yu, who was arrested with her husband in July.

According to a detailed interview that Wang Yu gave the Guardian prior to her detention and disappearance on July 9, people are being arrested, grabbed off the street, sent to mental hospitals or detention centers. She said: ‘You could disappear at any time.’

As a documentary made by the Guardian shows, one of Wang Yu’s cases involved the alleged rape of six underage girls by the headmaster of their school. Wang Yu took the case and organized a protest, handing out literature on child protection laws to pedestrians and people passing by in automobiles.

Parents of the young girls who had originally consented to their legal representation soon withdrew the consent, saying they were being monitored by the government and had been told not to speak to journalists or lawyers. Wang Yu said that cases like this are happening every minute and everywhere in China.

Yesterday, the Mail & Guardian reported that Wang Yu’s whereabouts remain a mystery.

On August 18, Reuters reported that Chinese government officials “had arrested about 15,000 people for crimes that ‘jeopardized Internet security,’ as the government moves to tighten controls on the Internet.”

Against this horrific backdrop, China’s authoritarian President Xi Jinping is slated to visit the United States late this month for a meeting with President Obama and state dinner at the White House. According to the Washington Post’s David Nakamura, a bipartisan group of 10 senators sent President Obama a letter in August calling on him to raise the issue of human rights abuses when Xi visits. The Post published the following excerpt from the letter:

“We expect that China’s recent actions in the East and South China Seas, economic and trade issues, climate change, as well as the recent cyber-attacks, will figure prominently in your discussions. While these issues deserve a full and robust exchange of views, so too do human rights. Under President Xi, there has been an extraordinary assault on rule of law and civil society in China.”

Given the delicacy with which President Obama is likely to broach this subject with Xi, a mass demonstration outside of the White House by human rights activists and lawyers in this country during the White House visit might send a more powerful message. Last year, U.S. consumers and businesses purchased $466.8 billion in goods from China. Should these human rights abuses continue, China should be made aware that consumers in the U.S. know how to check labels for country of origin.

We have an Ambassador-at-Large for Religious Freedom? Who knew . . . .

Thank you don; sets the debate into stone.

But that in turn opens another thought; is this a demonstration of open panic? If the nation was stable, there would be no need for any of this. To my mind, imprisoning dissent shows a lack of confidence in being able to control through force; where in their panic, they reinforce their own misunderstanding of the reasons for the dissent.

A peaceful nation must first and foremost; be at peace with itself; accepting dissent as honest debate about how to rule; in peace; peacefully. When a nation's leadership turns against its own; it is doomed.

History shows that you cannot rule a nation by applying force to achieve peace. Peace always stems from the rule of law; which law the people themselves have created; as their protection from government force. As things stand, I have now no option but to see China as a failed state; moreover, with no one able to point to an honest business with which to trade.