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Business Last Updated: Jan 7, 2021 - 11:21:59 AM

China: The Largely Lethal Long View
By Strategy Page, January 7, 2021
Jan 7, 2021 - 11:21:09 AM

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The Chinese economy is back in action after nearly a year of covid19 disruptions. Schools, theaters and businesses are open without restriction. China is still blocking efforts by international health agencies (like WHO) to study the emergence of covid19 in China, as well as concealing the actual damage the virus did. Like other East Asian nations China kept its infection rate low. That had little to do with being a communist police state because democracies like Taiwan, Singapore, Japan and South Korea produced verified results that showed how a disciplined response can keep covid19 infections and deaths and very low levels. China claims it suffered fewer deaths per capita and much less economic disruption than Western nations. The lower economic disruption is obvious. The death rate is less so because the government is not cooperating.

While exact Chinese covid19 infections and deaths data cannot be verified, the low losses in Taiwan and South Korea can be. China, claiming three deaths per million, admits it was not as effective as Taiwan (0.3 deaths per million) but did better than South Korea (20 deaths per million) Japan (29) or Singapore (6). The world average is 240 deaths per million and Western nations average a thousand dead per million. Reports from China indicate that Chinese covid19 deaths were much higher than reported. Even with that most Chinese were confident enough to go back to work, and large public gatherings like mass transit or movie theaters. To maintain this covid19 advantage China still sharply restricts Chinese from travelling outside the country and quickly quarantines any areas where more covid19 appears. The lower infection and death rates are the result of populations accustomed to acting in a unified and precise manner when confronting an emergency. It’s a cultural thing, which is one reason why for the last few thousand years East Asia contained most of the world population.

China claims that its GDP growth will be at least ten percent in 2021. Even many Chinese doubt that, although owners of large corporations who speak out get shut up quickly. This happened recently when Jack Ma, worth $50 billion because he founded Alibaba (the Chinese Amazon and much more) criticized the accuracy of Chinese economic data. Ma is undergoing re-education and if that does not work, he could be accused of criminal activities, imprisoned for a long period and have his assets seized by the state. That does not change the fact that falsified economic data has long been a problem and even the government admits that this must be fixed. But that is the job of CCP (Chinese Communist Party) leaders, not successful entrepreneurs like Jack Ma. The communist catchphrase “all power to the state” is still taken seriously in China.

The CCP is having less success getting foreign nations to cooperate. As a result, more nations are banning Chinese Internet-based products like communications apps. The U.S. and India recently banned widely used Chinses apps like TikTok. WeChat and finance related apps like AliPay. India and a growing number of Western nations are doing likewise. The reason is that Internet security analysts are discovering more and more evidence that these Chinese apps, usually at the order of their government, are used for espionage and worse. Chinese telecommunications companies, including suppliers of 5G cellphone equipment, are being banned in many countries.


Iran is accepting a Chinese offer of massive economic investment, some of it more profitable for China than Iran. Overall, the Chinese connection is a major plus for Iran because China also helps protect Iran diplomatically and in the UN. For that, the Chinese expect to be compensated and the Iranians are willing to pay. As a result, China will be more aggressive in helping Iran skirt the trade sanctions reimposed by the Americans in 2018. At the same time China expects to establish a major economic presence in the Middle East, starting with Iran. China takes the long view and sees Iran as reviving its historical role of a regional economic and military superpower. China understands that this will require the current Iranian religious dictatorship will have to go. China never comes out and says this, but in China it is understood and in Iran it is seen as the price to pay for much-needed economic and diplomatic aid.


South Korea has done better with economic recovery this year than the north. Earlier in the year, when covid19 first hit, it was believed that South Korean GDP would shrink less than two percent in 2020 and there would be robust normal growth in 2021. By mid-2020 it the GDP decline appeared worse. But the rest of 2020 has seen GDP growth and the total GDP loss for 2020 will be about one percent. There will be enough GDP growth in 2021 to cover the 2020 damage. For about half of 2020 the South Korean economy was in recession and a 16.6 percent drop in exports during the second quarter was disturbing because exports are crucial to economic growth and export customers were not increasing orders. China recovered faster than expected and the U.S. is finishing the year with strong GDP growth. These are the major trade partners for South Korea.

North Korean economic problems are much worse and continue to multiply with covid19 adding to the sanctions related problems. North Korea is going through the worst economic crises since the famine years of the 1990s. North Korea closed its Chinese border early in the year and it largely remains closed. North Korea has little cash and even though China now allows sanctioned coal and weapons exports to openly leave North Korea. It is not enough. Overall Chinese trade with North Korea is down at least 80 percent for the year. That means less food and other essential items were imported. Because the government insists there are no problems, offers of aid from South Korea and the United States are turned down. China is desperate to avoid an economic collapse in North Korea because that will mean far more illegal migrants from there when the weather turns warmer. There is also the growing risk of unpredictable behavior by the North Korean leadership. South Korea is sealed off from the north by the DMZ while the 1,400-kilometer Chinese border remain porous despite increased efforts to increase security. China is connected to North Korea and cannot change that.

North Korean GDP is expected to shrink by over ten percent in 2020. What little cash available is going to food imports and not much of that is coming in. There is growing hunger in North Korea and it is visible. Chatter, video and photos still get out of the country and documents the growing lack of food. Foreign analysts estimate that at least 40 percent of North Koreans are going hungry. The government is trying to provide large scale deaths from starvation and so far, has succeeded. Periodic crackdowns are described as eliminating the illegal behavior. The illicit enterprises always return.


China has long noted, respected and sometimes feared the fighting abilities of the Japanese. That attitude became rather malignant because of damage the Japanese military did to China in the first half of the 20th century. Chinese still fear and loathe Japanese because of these depredations. In the early 21st stations these attitudes towards Japan enable China to realistically assess current Japanese military capabilities. China sees Japan as a major obstacle to Chinese domination of East Asia. The Japanese Navy is the second largest in East Asia, second only to China. Its combat ships are all of modern design with well trained and experienced crews. This force includes 30 destroyers, six equipped with the Aegis air defense system that can also intercept ballistic missiles. Two more Aegis destroyer are on the way. There are also four “helicopter destroyers” that look like small aircraft carriers, which is what they actually are. The post-World War II Japanese constitution prohibits Japan from having aircraft carriers but the “helicopter destroyers” are being modified to use the vertical takeoff F-35B stealth fighter.

Japan is making a big investment in these aircraft both for operating from land bases and from seagoing ones. Since 2017 Japan has had operational two 27,000 ton “destroyers” (DDH type ships) that look exactly like an aircraft carrier. These Izumo class ships can carry up to 28 helicopters or up to ten vertical takeoff aircraft (F-35B). The carriers are armed only with two 20mm Phalanx anti-missile cannon and launcher with sixteen ESSM missiles for anti-missile defense. The DDH have powerful engines capable of destroyer-like speeds of over fifty-four kilometers an hour. There are also more medical facilities than one would expect for a ship of this size. Izumo does have considerable cargo capacity, which is intended for moving disaster relief supplies quickly to where they are needed. Some of these cargo spaces can be converted to berthing spaces for troops, disaster relief personnel, or people rescued from disasters, as well as additional weapons and equipment needed to support F-35B fighter-bombers. Izumo can carry and operate at least ten of the vertical take-off F-35B stealth fighters once modifications were made to the flight deck to handle the extremely high temperatures the F-35B generates when taking off or landing vertically, like a helicopter. When the first DDH entered service in 2015 Japan made no mention of buying F-35Bs or modifying the LPH flight decks to handle the F-35B. The Izumos already have an elevator (to the hanger deck under the flight deck) powerful enough to carry an F-35B fighter.

Japan also has a submarine force of very quiet and lethal diesel-electric boats, most with AIP (air-independent propulsion) that allows submerged operations lasting several weeks. This submarine force is being expanded to 22 boats.

There are 16 smaller (frigate and corvette) surface warships plus 30 minesweepers, three landing ships and lots of support ships. The current frigates are six 2,600-ton ships delivered in the 1990s. In the 1980s, when these frigates were designed 11 were planned. With the end of the Cold War in 1991 the number was cut to six.

The South Korean Navy is developing into something similar to Japan and these two nations, plus the American Pacific Fleet are currently more than China can handle and that situation will not change for a while.

January 4, 2021: The Chinese military was publicly criticized by CCP leaders for not training effectively and tolerating low levels of readiness. This is an ancient Chinese tradition along with corruption in the military. For centuries Chinese government have been trying to eliminate these problems but have not made a lot of progress. To help with these anticorruption efforts, the CCP has imposed a system of parallel political officers working with unit commanders as low as company (a hundred or so troops) level. These replace chaplains that are so common in non-communist forces. The political officers are there to assure loyalty (to the CCP) and monitor effectiveness. These effectiveness reports are considered top secret and extremely valuable because they provide the most accurate measure of how loyal and effective the military is. While state-controlled mass media boasts of all the new weapons, equipment and capabilities Chinese troops have, the political officer reports are much less encouraging.

December 27, 2020: China launched another secret military satellite. The launcher was a LM 4C, which can put four tons into low orbit, which is what this secret flight accomplished. The secret satellite is believed to be another radar satellite, which China uses to detect American warships at sea and track them for attack by ballistic missiles with maneuverable radar homing warheads.

December 26, 2020: The Chinese Navy began sea trials for another of its new Type 75 amphibious assault ships. This comes four months after the first Type 75 began sea trials and will soon enter service. That will make two Type 75s. These are LHD (Landing ships with helicopters and a dock in the rear for launching smaller landing craft. Type 75s carry 30 helicopters and 900 troops, at about 40,000 tons they are similar to the eight 41,000-ton American Wasp class, which entered service between 1989 and 2009. One Wasp was recently destroyed during a shipyard fire. China is building at least eight Type 75s and all are expected to enter service between 2021 and 2025. These ships follow eight 25,000-ton Type 71 LPDs that entered service between 2007 and 2021. These were the first large amphibious assault ships China built. These are similar to the eleven (so far) American San Antonio class LPDs that entered service between 2006 and 2017. LPDs do not have a full carrier deck but carry landing craft for about 600 troops and four helicopters. So far China has shown it can build amphibious assault ships more quickly, at less cost and with fewer problems than the Americans. China plans to use its new amphibious assault ships in the South China Sea and anywhere else they may require some amphibious warfare capability.

December 25, 2020: China is angry at Afghanistan, which earlier this month arrested ten Chinese citizens and accused of being MSS (Ministry of State Security) seeking to establish links with Islamic terror groups in Afghanistan. China denied that and demanded an apology and repatriation of the ten Chinese. The Afghans refused and have been making public their evidence.

December 24, 2020: The government revealed that 17,989 officials, most of them lower and local level, were punished for violating frugality rules or poor performance. None of these acts were illegal, but they did reflect poorly on the CCP which is more important to the government than eliminating corruption at the top.

The anti-corruption effort continues to get a lot of media attention in China. That includes publishing statistics. Corruption investigations have been increasing every year but who gets investigated is still a corrupted process. The number of investigations continues to grow. There were 172,000 in 2013, 330,000 in 2015, and 527,000 in 2017. So far is appears there will be over 600,000 for 2018 and continued increasing at a slower, and less publicized, rate. While the number of investigations continues to grow the pattern of who is prosecuted and who is punished has not changed. About 90 percent of those investigated for corruption go on trial and only about five percent were punished. Only about 12 percent of those punished were “tigers” (senior officials) while the rest were “flies” (those with no power or clout to avoid prosecution). The government says (quietly, to foreign observers who know what is really going on) that it is really trying to discourage corruption, not create a lot of enemies in its own senior bureaucracy. There is a need to get maximum popular goodwill from each corruption prosecution. This means equally, or more urgent areas of corruption, like banking and finance, get less attention. It is obvious from the public records of prosecutions that a tiny percentage of those convicted account for most of the economic damage. That means fewer than a thousand corrupt “Tigers” were responsible for most of the several billion dollars known to be stolen. More difficult to calculate is the other damage done by the corrupt tigers. That includes allowing state owned banks to make lots of uncollectable loans, often to state owned companies that are not profitable and never will be while state owned.

Some tigers accused of corruption use bribes and intimidation to avoid punishment, although few are able to keep their jobs. The government prefers to make deals that avoid a trial or prison if the accused can provide evidence of other senior people who are guilty and not known to prosecutors. Those punished most severely are the ones responsible for something that got a lot of people killed. This often results in execution, especially if the offender is a civilian (usually a senior business executive). Another pattern noticed by foreigners (working from public records) is that “tigers” accused of corruption tend to be disproportionately people who had not supported leader-for-life Xi Jinping before he became head of the government and then permanent leader. Those who did support Xi Jinping for a long time and are caught up in a corruption investigation still tend to get punished, but in the form of quietly retiring and often allowed to keep much, if not all, of the wealth they stole. One area where this “friends of Xi Jinping” angle does not work so well is the military. The senior officers accused of corruption had fewer opportunities to support (or not) Xi Jinping, who came up through the civilian and Communist Party bureaucracy. Corruption in the military is an ancient tradition and there’s a lot more opportunities to steal now. Xi Jinping has made it his personal goal to break that tradition, or at least greatly erode the extent of corruption in the military and that means a lot of the accused “tigers” tend to be generals and admirals. For the senior leaders corruption in the military is important mainly because the current Chinese military pledges allegiance to the CCP (Chinese Communist Party), not China.

This is no accident because the government is concentrating on corruption prosecutions in areas that most Chinese are angry about and that impacts them the most. This means medical care, pollution, and anything that resonates with most Chinese is under constant scrutiny. What that means is that the government is using opinion surveys (another essential of economic freedom) to determine what areas should get the most attention from anti-corruption efforts. For example, air and other forms of pollution are a big problem and most Chinese encounter it regularly. The pollution is believed to cause over a million premature deaths a year and the censors have been unable to keep Chinese from knowing this, or discussing it. Senior officials can buy expensive air filtration systems for their homes and offices, but they and their families could not completely escape the dirty air. Going after any corruption that is related to pollution is a higher priority and right after that comes medical care (where corruption is currently rampant).

December 22, 2020: China is having a growing problem with suppressing details about its misbehavior during the first few months after covcid19 appeared in Wuhan in September. China is also trying to dismiss the evidence of its pressuring WHO (the World Health Organization) to cooperate in the deception. It isn’t working. China did not decide until the end of 2019 to suppress details of how the virus first appeared in Wuhan and the first government response was to ignore the warnings from doctors and medical researchers. But those Chinese were already calling on colleagues worldwide to assist. China could not eliminate all that evidence and has adopted a policy of deny, deny, deny.

December 20, 2020: Satellite photos reveal that China is building a large drydock at its newly expanded Yulin naval base in the south (Hainan Island). The Yulin base has been there since 1955 but after 2000 China decided to expand it and by 2006 satellite photos showed new tunnels into coastal mountains that submarines could be sheltered in. Yulin was recently revealed to be the main base for China’s aircraft carriers as well as SSBNs (ballistic missile carrying subs). These days Yulin is the main base for operations in the South China Sea, which it is adjacent to. The new drydock is able to handle Chinese carriers. Without that the carriers would have to go back to northern China to find a drydock large enough for them.

December 11, 2020: Japan is providing assistance to upgrade the Indonesian coast guard. This will help Indonesia to deal with aggressive Chinese illegal fishing off the Indonesian coast. The first item of Japanese aid is the delivery of a used fisheries patrol ship, the Hakurei Maru. This is a 731-ton coast guard vessel was built in 1993 and for over two decades patrolled distant Japanese fishing grounds.

December 7, 2020: The Philippines is building a naval air base in the north (Central Luzon) to provide easier surveillance of the offshore Benham Rise, which Chinese ships have been investigating. Back in 2018 the government changed its policy on allowing foreign research vessels to study the Benham Rise, 250 kilometers off the east coast of the Philippines. In 2012 the UN agreed that the resource rich Benham Rise was indeed part of the Philippines coastal waters and the name was then changed to the Philippines Rise. This offshore entity is basically an underwater volcano that did not turn into an island. It is a large (250 kilometers square) plateau that is in an area where most of the water is 5,000 meters deep. But the rise is mostly 3,000 meters high and a “peak” rises out of that plateau and reaches to within 50 meters of the surface. The rise is a rich fishing area but also may have underwater oil and gas deposits. China has never made a claim on the Benham/Philippines Rise but that could change if the payoff were large enough. China had asked permission to send a research ship to study the area and at first the Philippines agreed. But the public reaction was hostile to that, given the Chinese aggression off the west coast in the South China Sea. Because of that reaction the Philippines withdrew that permission and banned any foreign research vessels from studying the Philippines Rise unless they received specific permission. Foreign fishing vessels are banned from the Philippines Rise as well.

The Philippines is also angry about how dealing with the post-covid19 economic recovery is that it is being exploited by China, who offers large investments in return for less official criticism about Chinese asserting their ownership of the South China Sea. Otherwise, China has, like other threats to the Philippines, been less active this year because of covid19.

December 6, 2020: India has gone public with its support for Burmese army leaders complaining about “foreign support” the tribal rebels are receiving. The Burmese generals won’t come right out and name China but the Indians will.

For several months now India has been accusing China of tolerating an Indian tribal rebel group ( Ulfa-I) basing themselves in Yunnan province. While China has tolerated some Burmese Wa State rebel activities in China (Guangxi province), those are mostly of a commercial nature. Burmese rebels buy a lot of weapons and other stuff in China and ship (or smuggle) it into Burma. Guangxi does not border India, Yunnan does and China has claims on large portions of India that border Yunnan.

In northern Burma it is no secret that China has done little to curb Chinese weapons dealers from selling all manner of military small arms to tribal rebels and getting it across the border into Burma. That cannot be done without the acquiescence of the Chinese government. In this way the Chinese are sending a message to the Burmese generals, who the Chinese see as equally responsible for the violence in the north, sometimes right on the Chinese border. Both the rebels and the army are often using Chinese weapons and ammo against each other. There are not a lot of casualties and most of them are from army convoys being ambushed or the army firing into pro-rebel villages to drive the civilians, and any rebels, out and into the bush. The army does not have enough troops to occupy all the territory they push tribal rebels, and civilians, out of. Often the rebels, if not the civilians (at least not right away) come back and resume attacking convoys and patrols.

Burma has long obtained most of its weapons from China. That was because until 2011 Burma had been a military dictatorship for over 40 years and few nations would sell to them. This made Burma one of China’s top three export customers. Pakistan was the largest, getting 55 percent of weapons exports while Burma got about seven percent. Because of all that international pressure to end the dictatorship, Burma could not afford the most modern weapons or be picky about what they bought. The Burmese Air Force is a good example. Except for a few dozen modern fighters (Mig-29s and Su-30s) from Russia and six JF-17s from China, the rest of the air force consisted of much older aircraft. The navy does a little better because Burma has local shipyards that can build warships, at least those up to about 3,000 tons (frigates). Three frigates have been built and two imported from China by 2012. Three corvettes 1,100-ton corvettes were also built locally. For the locally built ships, weapons and electronics must be imported. Burma has also built a lot of smaller (500 tons or less) patrol ships, some armed with missiles. Three ships of this type were bought from China in the 1990s to give Burmese ship builders models for locally built versions. This includes twenty 250-ton armed patrol ships to replace older ones purchased from China and many smaller patrol boats built in Burma during the 1990s. The navy also has one sub, a 1988 vintage Kilo class Russian boat purchased from India after refurbishment.

The army has few expensive systems. Even the tank force is mostly Chinese made tanks that China stopped using in the 1980s and the only users left are nations that cannot afford to buy a lot of modern replacements. What is important to the army is lots of loyal infantry armed with Chinese small arms and other infantry weapons and equipment.

December 2, 2020: South Korea is spending $49 billion on defense during 2021. That’s a 5.2 percent increase over 2020. In 2019 South Korea spent $43 billion on its military. That was nearly as much as Japan, which has a much larger economy. The 2018 South Korea budget had the largest increase (6.9 percent) in the defense budget since 2009. Although North Korea openly complains about how unfair and unfriendly these increases are, they are a direct result of the increasing threat from North Korea. The annual South Korean defense budget is more than a third larger than the annual GDP of North Korea, which spends about a third of GDP on defense compared to less than three percent in South Korea.

November 28, 2020: A U.S. Navy destroyer used a SM-3 Block IIA anti-missile missile to intercept an air-launched ICBM type target over the Pacific. This new version of the SM-3 anti-missile missile was developed jointly by the U.S. and Japan. For nearly a decade the U.S. Aegis developer has been working with Japanese firms to develop technology for Aegis to detect and intercept IRBM and then ICBM warheads. What makes ICBM warheads more difficult to intercept is that these warheads are released from the last stage of the missile higher up before plunging earthwards towards their targets. The higher up a ballistic missile travels the faster its warhead goes on the way down. The Japanese believed it was possible to adjust the Aegis software to detect these faster warheads and using an improved SM-3 final stage that could detect and intercept that faster incoming target. The November test proved that all this worked.

November 26, 2020: In the south (Burmese border) there is a dispute over where China can build their new “smuggler control” border fence next to Burma’s Shan State. The fence is apparently going to eventually cover the entire Burmese border. The Chinese began erecting the fence on the border without informing Burma and when the Burmese troops noted the activity and reported it there was an interesting reaction. The local Burmese commander border guards sent a letter to the Chinese commander of the area where the fence was going. The letter pointed out that the 1961 Burma-China treaty that defined where the border was and who could do what near it. The treaty specified that neither side could build anything within ten meters (32 feet) of the actual border. The Chinese halted work on the fence while Chinese diplomatic officials were consulted. There have been similar incidents like this over the past few years. China tends to regard treaties as suggestions, not rules.

Source:Ocnus.net 2021

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