A show of force

Fears are growing over the hold China’s well-equipped army has on foreign policy 
By Kathrin Hille

When the US announced its decision last week to help Taiwan upgrade its fleet of ageing fighter aircraft, the response was swift and sharp.
China should take “smart and devious revenge”, advised Major General Luo Yuan, deputy secretary-general of the academy of military sciences.
He went on to demand “a tooth for a tooth from those who violate China’s interests”, suggesting his country learn from Russia and deploy missiles against America.
The biblical language and the cold war references make it difficult not to perceive China’s military as a belligerent force bent on confronting the US.
In the past two years, a series of fierce outbursts from men in uniform, combined with constant friction with neighbours, and the People’s Liberation Army’s rapidly growing capabilities, have triggered complaints about an assertive, even aggressive, Beijing.
Many outside China believe that the PLA is behind this push.
“Is the military now driving China’s foreign policy?” asked Iskander Rehman, an Indian security analyst, in an article this year.
The answer is yes and no.
But the balance may still shift, with substantial implications for the Asia-Pacific region and beyond.
“To be sure, the PLA as a bureaucratic actor lobbies for its preferences within the Chinese system,” says Professor Taylor Fravel of the Massachusetts Institute of Technology.
“However, speaking in general terms, there is no evidence that the PLA has sought to change policy at the strategic level.”
The defining moment for the theory of a hawkish, increasingly powerful PLA setting the foreign policy agenda came in January when the air force conducted the first flight test of its domestically developed stealth fighter – just as Robert Gates, then US defence secretary, headed into a meeting with President Hu Jintao. Many analysts interpreted the timing as a snub by a military keen to demonstrate its growing capabilities to a country it sees as its main adversary.
Mr Gates said later that he believed Mr Hu had been unaware of the test.
“Over the last several years we ave seen some signs of... a disconnect between the military and the civilian leadership,” Mr Gates said.
Such suspicions attract particularly strong attention as Mr Hu and members of the Communist party’s senior leadership prepare to hand power to the next generation late next year.
Xi Jinping, the man expected to replace the president, has much closer ties to the top brass.
Admiral Mike Mullen, who retires this week as chairman of the US joint chiefs of staff, was given a similarly embarrassing reception in Beijing at a press conference with his counterpart in July.
Standing next to Adm Mullen but not looking at him, Gen Chen Bingde called US naval exercises in the disputed waters of the South China Sea “extremely inappropriate”.
These incidents attract particular attention as the PLA harvests the fruits of more than a decade of modernisation, driven by mostly double-digit percentage rises in spending.
The navy tested its first aircraft carrier, a refurbished Soviet-built vessel, at sea for the first time last month. Washington believes Beijing is also developing an indigenous carrier, with two vessels under construction. The PLA could put one into operation by 2015 and deploy multiple carriers by 2020, according to the Pentagon’s annual assessment of China’s military power.
The PLA has begun deploying a land-based “carrier killer” ballistic missile with which it could deter US forces from entering what Beijing sees as its near seas – especially the South China Sea, an area rich in resources and vital sea lanes where China has territorial disputes with neighbours.
Most importantly, it would limit US ability to protect Taiwan.
“By the latter half of the current decade, China will likely be able to project and sustain a modest-size force, perhaps several battalions of ground forces or a naval flotilla of up to a dozen ships, in low-intensity operations far from China,” said the Pentagon last month.
“This evolution will lay the foundation for a force able to accomplish a broader set of regional and global objectives.”
What those objectives might be is the subject of fierce debate.
Beijing insists it will never pose a threat to anyone and does not seek hegemony.
But the past year has left many of its neighbours left feeling the opposite.
Vietnam and the Philippines have complained about incidents in which they said Chinese ships had harassed boats engaged in fishing, surveying and exploration in the South China Sea.
This follows frequent arrests of Vietnamese and Malaysian fishermen, huge exercises by the Chinese navy and a dispute with Tokyo after a ship collision close to Japan's Senkaku islands.
On the other hand, Beijing refused to condemn Pyongyang over the March 2010 sinking of a South Korean frigate, and the shelling of a South Korean island eight months later, actions perceived by other nations as provocation by the north.
But it blasted the US and Seoul for joint exercises in the Yellow Sea conducted in response to the frigate incident.
Despite the hawkish comments from military figures that accompanied these moves, a closer look shows Beijing is juggling many forces in its handling of the different conflicts – and the PLA is not necessarily the dominant one.
While the army has stepped up South China Sea patrols, it has not been involved in the high-profile maritime incidents.
Security experts identify some of the institutions that perform coastguard functions as main actors in disputes in the South China Sea and around the Senkakus.
There are at least five bodies involved in enforcing maritime security: the coastguard, part of the border control department of the People’s Armed Police; the maritime safety administration under the ministry of transport; the fisheries law enforcement command under the ministry of agriculture; the general administration of customs; and the maritime surveillance unit under the state oceanographic administration.
“They are competing for funds and attention – and in addition there are internal, regional rivalries,” says Linda Jakobson of the Lowy Institute, an Australian think-tank.
While the South China divisions of these five institutions are believed to have ties with, or even share facilities with, the navy, experts say there is no evidence of direct military involvement in any of the incidents.
“The [navy] does not want to be in the business of detaining civilians from other countries or shadowing commercial seismic survey vessels,” says Prof Fravel.
“They see their mission as defending Chinese territory, such as the contested islands, or defeating other naval forces, especially those of the United States.”
The sense of that mission has clearly evolved.
As early as 2000, the Chinese magazine, Modern Navy, noted that the definition of the country’s maritime rights and interests was shifting from simply protecting its coast to safeguarding its resources and sea lanes. Wu Shengli, commander of the navy, has defended his force’s missions farther from home, pointing in 2009 to the need to protect economic lifelines, which now include many more assets far from its shores.
The military rarely moves from such arguments to attempting to develop a consistent foreign policy line, however.
One of the most important national security debates has surrounded the question of whether to base South China Sea claims on an ambiguous dotted line that appears on all Chinese maps, circling the entire area; or to switch to claiming “land structures” – anything from islands to coral reefs – and the waters immediately around them, a move towards international law that would make Beijing’s position easier for rival claimants to understand.
The more hawkish coastguard opposes changes because they would make it impossible to claim some areas.
The foreign policy apparatus favours a switch because it could strengthen China’s credentials as a responsible stakeholder in the international system and eventually facilitate dispute resolution through negotiations.
The PLA, by contrast, has kept out of the debate.
Scenarios under which the civilian leadership would lose control of the military therefore have no basis in reality.
Even though Mao Zedong, who coined the phrase that “the [Communist] party controls the gun”, died more than 30 years ago, the armed forces remain subordinate to the party.
The PLA’s relationship with later political leaders was much less close than with Mao and Deng Xiaoping, who had earned the generals’ respect in combat during the revolution, but presidents Jiang Zemin and Hu Jintao managed to establish a good working relationship with them...
Long-term PLA observers say one reason is that these leaders have ensured the army receives the funds and equipment it needs to modernise and professionalise.
Another is the flexible, pragmatic nature of China’s version of the political commissar system designed to keep the military under control.
After realising that civilian commissars were not popular with the soldiers, the party moved early on to put political work in the hands of professionally accomplished officers.
Even when the military does meddle, analysts argue this is not a new phenomenon but simply more visible as levels of debate and friction increase throughout society, magnified by a more commercially driven press and a vibrant internet.
“In this new media environment, other bureaucratic players and interest groups can become first movers to establish a narrative to which governments must respond,” says Prof Alastair Iain Johnston of Harvard University.
In one such case, the foreign ministry initially voiced only “concern” over plans for joint manoeuvres by the US and South Korea in the Yellow Sea last year.
But it toughened its line following a statement by Gen Ma Xiaotian, deputy chief of the general staff, that China was “extremely opposed” to such exercises.
“It seems that the [foreign ministry] felt it could not be outflanked by the PLA on this issue, and no one at the top was willing to discipline Ma,” says Prof Johnston.
Similar forces are at work with military scholars such as Maj Gen Luo.
The Global Times, a tabloid owned by the People’s Daily, the Communist party mouthpiece, regularly quotes him and other PLA professors.
“The Chinese public is increasingly chauvinistic, so the angry generals sell,” says an editor at the paper.
As many of them are retired, and PLA pensions are relatively low, appearances on television are a welcome source of additional income.
Foreign defence officials in Beijing say their commentary has contributed to the impression of a new assertiveness driven by the military.
Some of them, for example, have used the term “core interests” to describe a wide range of areas including the South China Sea, which has caused alarm abroad.
But observers agree that they do not even speak for the PLA, let alone the country’s leadership.
“Having us is quite convenient for the government,” says one retired general who frequently airs hawkish views on state television.
“Many people feel the same way we do, but then the government can disown us when needed – and, I tell you, they shut us up frequently.”


BACKGROUND NEWS 
On a beautiful day in late May, a grandson of Mao Zedong, the Chinese dictator, got married.
But much of the attention was focused not on the bride and groom but on the couple’s powerful matchmakers.
One was General Liu Yuan, political commissar at one of the military’s most important departments.
The other was Bo Xicheng, brother of Bo Xilai, the prominent party chief of the south-western city of Chongqing.
Both are princelings – sons of party leaders of the first hour.
Gen Liu surprised guests with a political speech calling for the offspring of Communist royalty to be friends and stick together – the latest in a series of high-profile moves observers read as a sign he is campaigning for a seat on the central military commission, the apex of the military leadership.
At its 18th congress next October, the party will not only appoint a new overall leadership but also military leaders.
Although some rules have been established, the succession process remains so opaque that every round raises the question of whether the army – just like any other group or faction – will gain or lose power.
With eight of the CMC’s 12 members due to retire next year, the forthcoming succession promises particularly big changes in this regard.
What makes it more interesting is that Xi Jinping, the man expected to take over from Hu Jintao as president of the Chinese state, general secretary of the party and head of the CMC, is believed to be friends with some princeling generals.
These include Gen Liu and Ma Xiaotian, deputy chief of the general staff.
Both are seen as strong contenders for membership or even senior posts in the CMC.
Gen Ma, currently in charge of military intelligence and diplomacy, is expected to become air force commander while Gen Liu could head up the general political department.
What binds these princelings together is shared experiences: their fathers fought in the revolution alongside Mao but later fell victim to his constant political campaigns.
Mr Xi has gone on the record praising some of Mao’s ideological teachings, rather unusual nowadays, as has Gen Liu.
Gen Liu and Gen Ma are known as hawks in foreign and security policy.
How all this might translate into policy once Mr Xi is in the top job is hard to tell.
But a leader who counts some of the top brass as close friends would mark a sharp departure from Mr Hu and his arm’s length relationship with the military.

China 'shadow-boxing' US at sea: Philippines' Ramos

Former Filipino President Fidel Ramos speaks at the Heritage Foundation in Washington 

WASHINGTON (AFP) — Philippine ex-president Fidel Ramos said Wednesday that China's recent assertiveness over sea disputes was motivated by a desire to challenge US power, as he predicted more tensions to come. 

On a visit to Washington, Ramos described China and the United States as "shadow-boxing" over the South China Sea and East China Sea where Beijing has growing friction with countries including the Philippines, Vietnam and Japan. 

"China's proximate aim, it seems to me, is to limit American freedom of access" and "erode the credibility of Washington's security guarantees to the East Asian states, including and especially the Philippines," Ramos, who was president from 1992 to 1998, said at the Heritage Foundation think-tank. 

"We, where we come from, expect South China Sea tensions to continue because the root cause is really China's perceived need to break out from under the strategic dominance of the Western allies," Ramos said. However, Ramos said he did not expect military confrontation due to the vast US military superiority over China. 

He called for governments to shift away spending from the military to fighting "real enemies" such as poverty. Ramos was visiting Washington as part of 60th anniversary commemorations of the Mutual Defense Treaty between Washington and its former colony. 

Elsewhere in the region, the United States also has security pacts with Australia, Japan, South Korea and Thailand. 

Ramos welcomed the role of the US military in Asia, saying it had provided security to Asia and allowed it to grow economically. 

Amid the tension with China, Philippine President Benigno Aquino has allocated 11 billion pesos ($252 million) to upgrade his country's navy, whose flagship vessel dates from World War II.

‘Time for China to Strike Back’

"China should strike the Philippines and Vietnam, the two ‘noisiest troublemakers,’ to strike fear into other claimants"

By Jason Miks

Chinese scout captured in the 1979 Sino-Vietnamese War

Anti-China protesters in Hanoi, Vietnam
Southeast Asian nations are like ‘mosquitos’ that need to be taught a lesson, according to the Global Times, which is published by the official Chinese Communist Party’s People’s Daily.
‘The Philippines, pretending to be weak and innocent, declared that mosquitoes are not wary of the power of the Chinese elephant,’ a writer using the pseudonym Long Tao (meaning ‘way of the dragon’) says.
‘The elephant should stay restrained if mosquitoes behave themselves well. But it seems like we have a completely different story now given the mosquitoes even invited an eagle (the United States) to come to their ambitious party. I believe the constant military drill and infringement provide no better excuse for China to strike back.’
The warning comes as tensions have increased over the disputed waters of the South China Sea, which China, the Philippines, Vietnam and others claim parts of.
This summer, Vietnam and the Philippines both called for outside assistance in the face of what they argued was increasing Chinese aggression, including harassment of its fishing vessels and the deliberate cutting of cables in the waters that belong to PetroVietnam.
‘It’s very amusing to see some of the countries vow to threaten or even confront China with force just because the US announced that it has “returned to Asia,”’ Long wrote.
‘The tension of war is escalating second by second but the initiative is not in our hand. China should take part in the exploitation of oil and gas in South China Sea… For those who infringe upon our sovereignty to steal the oil, we need to warn them politely, and then take action if they don’t respond.’
The last statement could also be taken to mean India.
New Delhi isn’t a claimant of territory in the South China Sea, but has announced it intends to jointly develop oil and gas in the resource rich region with Vietnam.
According to June Teufel Dreyer, a professor at the University of Miami and a China specialist, the article is significant not just because of what it says about China’s intentions in the South China Sea, but also the indications over top-level politics in China.
‘The author’s pseudonym comes from the Six Secret Military Teachings,’ she says.
‘I’ve been told that one of them is that he who wishes to establish military predominance must kill top-level dissenters.
‘I’m assuming Long Tao’s message is metaphorical: dump the people who insist on the “peaceful” part of “peaceful rise.” That he feels that the time has come for China to stop hiding its assets, as Deng Xiaoping advised, and to assert itself internationally. This would seem to have direct relevance to the leadership succession question now playing itself out in Beijing.’
‘The sentence about “the right time for us to… strike first before things gradually get out of hand” reminded me eerily of Mao’s “east wind prevailing over the west wind” with the message that if we don’t seize the moment, the winds may change against us,’ she adds.
Asked what will likely happen next, Dreyer says she expects the next few days will see an official-level effort to soothe the situation, such as a placatory statement from the Foreign Affairs Ministry to the effect that China has always and continues to wish to settle disputes peacefully, although there may also be a show of force in the form of patrol vessels in the area.
‘I doubt that the Vietnamese will take any action, and I’m positive that the only thing Manila will do is complain to the US,’ she says.
But could China be shooting itself in the foot with such talk?
‘The risk for China in continued strident pronouncements – and as you know, many others have been from high-ranking people including PLA flag officers – is that several members of ASEAN may seek closer defense ties with India and Japan. The Vietnamese and Indonesian militaries are large and quite well-equipped. As is the Indian military, which is very worried about China.’

Asian Bloc Agrees to Counter China Threat

By YOREE KOH
TOKYO—Japanese defense officials and their Southeast Asian counterparts agreed this week on the need to deepen regional cooperation amid concerns about China's growing assertiveness in the South China Sea, as Tokyo again signaled its willingness to play a bigger role with its neighbors.
The relationship between Japan and the members of the Association of Southeast Asian Nations has "matured from dialogues to one where Japan plays a more specific cooperative role" on a range of regional security issues, Japanese Vice Minister of Defense Kimito Nakae said Thursday in Tokyo, the day after meeting with senior defense officials from the 10 Asean nations.
Mr. Nakae was speaking at the opening of a seminar on common security issues held the day after the annual defense meeting.
Attended by representatives of Japan and Asean countries, which include the Philippines, Vietnam, Indonesia and Thailand, the seminar this year prominently featured maritime issues.
At the meeting, Asean nation officials underlined the need to establish a common understanding on the interpretation of international law regarding freedom of navigation, and to implement a formal, binding code of conduct to keep disputes in check.
Several countries, such as Vietnam and the Philippines, have territorial claims that conflict with China's in the South China Sea, which some geologists suspect covers oil and gas reserves.
Bolstering the possibility of establishing a wider multilateral strategic framework, Mr. Nakae said resolving the maritime problem requires stronger cooperation from Japan, the U.S. and others.
China's growing naval confidence was the primary subject discussed by a panel of regional security experts during the session on "efforts to strengthen maritime security in the region."
"Chinese naval activism will not likely be a temporary phenomenon, but will be a permanent feature of Asian politics in the years to come," said one panelist, Toshi Yoshihara, a professor of Asia-Pacific studies at the U.S. Naval War College.
"Maritime Asia is going to be a busy place. It is going to be a busy theater as China fulfills what it believes is its rightful maritime prerogative."
Earlier this week, Japan and the Philippines tightened military and security ties, elevating the bilateral relationship to a "strategic partnership" in a joint statement signed by Prime Minister Yoshihiko Noda and Philippine President Benigno Aquino III in Tokyo.

China's rival to Nobel peace prize is scrapped after one year

Authorities pull plug on Confucius prize marked by disorganisation and negative headlines 
By Jonathan Watts in Beijing

A girl holds the cash value of the first Confucius peace prize after receiving it on behalf of the recipient, Lien Chan, former Taiwan vice-president, in Beijing last December. 


A Chinese attempt to establish an alternative to the Nobel peace prize appeared to have flopped after just one award ceremony when the government confirmed on Thursday that the group overseeing the award had been disbanded.
The Confucius peace prize was launched last December in a riposte to the Nobel committee's honouring of the jailed Chinese dissident Liu Xiaobo, a decision that embarrassed and infuriated Beijing.
But less than nine months later the Association of Chinese Local Art, which initiated the prize, said it was cancelling the award in a statement posted on the website of the ministry of culture.
No explanation was given for the decision.
But the launch of the prize was marked by disorganisation and largely negative headlines, which may have prompted the authorities to pull the plug.
The prize was cobbled together three weeks after it was proposed in the wake of the Nobel committee's announcement that Liu would be the laureate in 2010.
The Chinese organisers claimed, however, they had been preparing for years to create an award to "promote world peace from an Eastern perspective" and the Confucius prize specifically.
An anonymous donor was said to have put up the first 100,000 yuan (£9,500) cash prize, which was awarded at an event scheduled one day before the Nobel ceremony in Oslo.
The nominees included Nelson Mandela, Bill Gates, Jimmy Carter and the Beijing-appointed Panchen Lama (the one chosen by the Dalai Lama was taken away by the authorities as a child and has not been seen for more than a decade).
The first winner -- the former Taiwanese vice-president Lien Chan -- failed to turn up to the chaotic inaugural ceremony.
His office appeared to be unaware that the event was taking place.
This generated a contrast with Liu, who was represented by an empty chair at the Nobel ceremony because he is in prison on subversion charges after promoting a more democratic form of government.
His wife is under tight supervision and frequent house arrest.
Beijing is furious at Liu's high-profile award and accuses hostile foreign forces of trying to undermine its economic success.
Some in the media compared China's rival award to the Nazi's creation of the German National Prize for Art and Science in 1935 in a fit of pique at a Nobel snub.
It is unclear whether a new award will replace the defunct Confucius prize.
To counter what it sees as an unfair international reputation, the government in Beijing has ramped up its attempts to project "soft power".
Along with Confucius institutes to promote Chinese culture, it has invested heavily in the foreign coverage of state-run media, such as the Xinhua news agency and China Central Television.

Chinese Stocks Plummet on News of Justice Department Inquiry

By AZAM AHMED

Robert Khuzami, the S.E.C.’s enforcement director.

Shares of some Chinese companies listed on exchanges in the United States tumbled on Thursday after a top American regulator said that the Justice Department was reviewing accounting irregularities at various companies based in China.

Chinese Internet companies were particularly hard hit, including Youku and Tudou, Chinese video posting sites, as well as Baidu, Sohu and Sina, also Internet stocks. 

The drop in share prices came after Reuters published an interview with Robert Khuzami, the enforcement chief at the Securities and Exchange Commission, who indicated that federal prosecutors were looking into possible accounting frauds. 

“There are parts of the Justice Department that are actively engaged in this area,” Mr. Khuzami said, according to Reuters. 

The S.E.C. confirmed his comments. 

The Justice Department declined to comment.

Youku’s American depository receipts closed down 18 percent, Tudou ended down 10 percent, Baidu fell 9 percent, Sohu dropped almost 5 percent and Sina fell nearly 10 percent. 

Not all United States-listed Chinese companies suffered — some stocks rose during the session, including LDK Solar’s American depository receipts, which rose more than 1 percent. 

An area of particular interest for regulators has been so-called reverse merger companies. 

These go public by purchasing the shares of defunct public companies and assuming their tickers. 

In recent months, such companies have been criticized by researchers who claim to have found repeated instances of fraud in their accounting. 

The Securities and Exchange Commission has halted trading in more than a dozen such stocks this year, often after auditors have resigned over accounting irregularities. 

While some Chinese companies have fired auditors, others have restated earnings or owned up to lying about assets. 

These admissions have cost billions of dollars in market value and harmed other reverse-merger companies that have not been accused of any wrongdoing. 

The share prices of a number of reverse merger companies fell sharply on Thursday, including AgFeed Industries and China Auto Logistics. 

The steep losses in stocks have also prompted a wave of shareholder lawsuits against companies, auditors and even the banks that ushered these companies to market. 

One in every four federal securities class-action lawsuits filed this year relates to such firms, according to a study published this summer by the Securities Class Action Clearinghouse at Stanford Law School and Cornerstone Research in Boston. 

One recent high profile example is Sino-Forest, whose share price was decimated after Muddy Waters Research charged that it was falsely claiming assets and that it amounted to a Ponzi scheme. 

China MediaExpress and Duoyuan Global Water are other reverse-merger companies whose stock prices have tumbled this year after accusations of fraud. 

Reverse mergers have enabled companies to tap the American capital markets without having to undergo the arduous process of an initial offering. 

But as more and more of these companies come under fire from bloggers and investors betting against their share prices, the government has started to take a closer look at them. 

The S.E.C. has sent a steady stream of warnings to investors about the risks associated with investing in such companies. 

Exchanges have delisted the companies that have fallen under scrutiny or failed to file disclosures and statements in a timely manner. 

But while the S.E.C. has been vocal about its investigation of these firms, it was unclear until the interview with Mr. Khuzami whether the Justice Department was looking into these allegations as well.

US man charged over bid to give China defense info

A US man once employed as a guard at a US consulate in China has been charged with trying to pass defense information
WASHINGTON (AFP) — A US man once employed as a guard at a US consulate in China has been charged with attempting to pass defense information to the government in Beijing, the US Justice Department said Wednesday.
The new charge came in a superseding indictment for Bryan Underwood, 31, atop previous charges of making false statements to US officials.
According to the Justice Department statement, from about March to August, Underwood "knowingly and unlawfully attempted to communicate photographs and other information relating to the national defense to representatives of the People's Republic of China (PRC)."
The statement did not specify the city in which Underwood had worked.
Underwood made the attempts "with the intent and reason to believe that these materials would be used to the injury of the United States and to the advantage of a foreign nation," US officials said.
The superseding indictment returned by a federal grand jury in Washington on Wednesday comes after initial charges were made against him on August 31.
Underwood had been scheduled to appear at a status hearing earlier this month, and when he failed to present himself in court, FBI agents located him in Los Angeles and arrested him on September 24.
He now also faces charges of failing to appear in court in accordance with the terms of his release.
If convicted, Underwood faces a maximum potential sentence of life in prison.
"Our national security depends upon our ability to keep our most sensitive information confidential," US attorney Ronald Machen said in a statement, adding his lying to US officials to allegedly cover up his actions was a "betrayal" of US interests.

China warns neighbours over US backing

By Kathrin Hille in Beijing

China has warned Asian countries against provoking it under the cover of US military power, highlighting Beijing’s concern over moves from its neighbours and the US to contain its rise.
“Certain countries think as long as they can balance China with the help of US military power, they are free to do whatever they want,” said the People’s Daily, the mouthpiece of the ruling Communist party, in an editorial on Wednesday.
The piece came just one day after Japan and the Philippines pledged to boost maritime security ties and called for the protection of freedom of navigation and the peaceful settlement of disputes in the South China Sea, the resource-rich area which is home to vital sea lanes to all of east Asia but also subject to several territorial disputes involving China.
A joint statement by Yoshihiko Noda, Japan’s prime minister, and Benigno Aquino, president of the Philippines, said that maintaining peace and stability in the area was a “common interest to the international community”.
Chinese observers said the statement sounded like an unwelcome echo of remarks by Hillary Clinton, US secretary of state, last year in which she called stability in the South China Sea a national interest of the US. In Beijing it would have been seen as just the latest in a series of moves aimed at countering China’s growing regional power.
Australia and the US are negotiating how to step up security co-operation including plans to give the US military more access to Australian bases.
Leon Panetta, US secretary of defence, has said the strengthening of the security ties would send a “clear signal to “those that would threaten us”, and analysts believe the moves target China.
Some members of the Association of Southeast Asian Nations (Asean) have lobbied the US to keep up its security presence in Asia driven by concerns over China’s growing military clout.
In June, Robert Gates, then US secretary of defence, pledged that Washington would send more ships to the region.
Late last year, Japan ordered a refocusing of its self-defence forces, citing concern over China.
Beijing is trying to reassure its neighbours about its intentions.
Earlier this month it published a white paper titled “China’s Peaceful Development”.
“We don’t deny that some Asian countries have a certain feeling of insecurity in the face of China’s rapid rise, particularly that the development of China’s military power will destroy the balance long meticulously maintained by the US,” said the People’s Daily editorial.
“But today’s Asia has changed. […] no country wants to give back their ticket for the high speed train of China’s economic development.”
It said Asia needed a “new security architecture” in which China was “bound to occupy an important position” but China would not be provoked and did non intend to force other countries into alliances centred on it.

US urges China to respect Tibetans' rights

Two monks at the Kirti monastery has attempted to self-immolate in a call for religious freedom
WASHINGTON (AFP) — The United States urged China to respect the rights of Tibetans and address their grievances after two monks set themselves on fire, triggering a security clampdown.

The State Department also urged Beijing to allow journalists and diplomats to observe the situation in Sichuan province's Aba county, which has seen a string of protests and self-immolations by monks. 

The State Department said in a statement it was "seriously concerned" by attempts Monday by two monks at the Kirti monastery -- in China's southwest -- to self-immolate in an apparent call for religious freedom. Although both were reported to have survived and were taken to hospital, a witness contacted by AFP said one of the two appeared to have suffered very serious injuries and was "unlikely to have survived". 

"In light of the continuing underlying grievances of China's Tibetan population, we again urge Chinese leaders to respect the rights of Tibetans," the State Department said. 

It also called for Beijing "to address policies in Tibetan areas that have created tension, and to protect Tibetans' unique religious, cultural and linguistic identity." 

"We continue to urge the Chinese government to allow access to Tibetan areas of China for both journalists and diplomats," it said. 

Kirti monastery has been the scene of repeated protests against perceived religious repression, according to rights groups, and previous self-immolations in the region have triggered a heavy-handed crackdown. 

The two young monks reportedly cried out "long live the Dalai Lama" as they set themselves on fire, referring to the exiled Tibetan spiritual leader -- revered by many Tibetans but criticised by Beijing as a "splittist." Locals said Tuesday that police had cut Internet services and blocked roads near Kirti, also ordering groups of more than six people to break up. 

One man reached by telephone at a local pharmaceutical company told AFP that people could not send or receive text messages. 

Many Tibetans in China are angry about perceived religious repression, erosion of their culture, and also what they view as increasing domination by the country's majority Han ethnic group. 

China, however, says that Tibetan living standards have improved markedly with billions in Chinese investment. 

One of the two monks who set themselves ablaze was believed to be the brother of Phuntsog, a young Kirti monk whose self-immolation in March led to protests and a major security crackdown in the area. 

Phuntsog was the second monk at Kirti to set himself on fire since the anti-Chinese riots in Lhasa of March 2008, the bloodiest in Tibet in 20 years. 

"Since the self-immolation of young monk Phuntsog in March, Kirti monks have 'disappeared' and returned, broken by torture," said Mary Beth Markey of the International Campaign for Tibet, a rights group. "Suicide is seen as the worst kind of taking of life and prohibited according to Tibetan Buddhist principles, so their actions are a measure of the anguish these young monks feel." 

The latest protest followed the death of 29-year-old Tsewang Norbu, who set fire to himself and called for freedom at another Sichuan monastery last month. 

Campaigners said the 29-year-old at the Nyitso monastery drank petrol before setting himself alight. 

Police and soldiers surrounded the monastery after his death.

Rethinking Taiwan's Defense

Taipei can deter China with a strategy of access-denial around the island and guerrilla warfare on land. 
By DAN BLUMENTHAL

Taipei needs more fast-attack vessels.The Obama administration has fumbled in denying Taiwan the additional F-16s it badly needs and instead offering upgrades to the existing older fleet. 

Among other problems, this move sends the message that China can have a veto over U.S. arms sales to Taiwan as long as mainland officials object loudly enough. 

While President Obama's decision to deny Taiwan a credible air force adds to Taipei's defense burdens, all may not be lost. 

Washington and Taipei are hinting at combined work on a new Taiwan defense policy. 

Up until recently, Taiwan's military has tried to meet China's threat symmetrically. 

For example, its naval fleet is built around large capital ships such as destroyers. 

The Taiwan Army is still a heavy, lumbering force. 

Now Taiwanese and U.S. defense officials are talking about reshaping the island's military strategy to pit Taiwan's strengths against China's weaknesses. 

The Obama administration can help Taiwan build a force structure driven by a three-pronged strategy of asymmetry, combat credibility and survivability. 

Taipei can take a page out of Beijing's own "anti-access" strategy for dealing with the U.S. 

China has successfully built precision-guided forces, submarine and mining capabilities, and integrated air defenses (IADS) that can make American intervention in area's close to China a bloody affair. 

Similarly, Taiwan can create a "contested zone" for the People's Liberation Army (PLA) in and around the Taiwan Strait. 

To do so, it would need to invest more in mines, submarines, small fast-attack ships, integrated air defenses, and cruise and ballistic missiles. 

Beijing's scenarios for war with Taiwan envision a quick, decisive campaign that it hopes will bring the island to terms quickly. 

Its model is the aerospace component of NATO's 1990s strategy in Kosovo, i.e. coercion rather than occupation. 

It wants to pound the island with its missile and aerospace forces to bring it to its knees, but it will hesitate to bring in ground troops.

Taiwan can take advantage of Beijing's squeamishness about coming ashore by showing that the PLA cannot win without "boots on the ground." 

Taiwan needs to develop the credible combat capability to fight a war that exacts a high price in blood and treasure from Chinese forces. 

A premium should be placed on withstanding an onslaught of Chinese missiles through active and passive missile defenses, and an IADS system that can shoot down follow-on aircraft. 

There would also be a role for submarines and small-attack craft armed with anti-ship cruise missiles to break blockades and "swarm" Chinese ships headed to the island. 

Cruise and ballistic missiles would be needed to slow the movement of Chinese vessels and thin out air strikes. 

These capabilities need to be knit together with an excellent command control, communications and intelligence and surveillance network, to allow Taiwan's smaller ships and submarines, missiles and surviving aircraft to target any enemy forces in the Strait. 

While creating an anti-access battle network would be the main element of the strategy, Taiwan's ground forces need to change too. 

The army must not only prepare to repel an amphibious landing, but also show it can bleed the PLA dry should Chinese forces establish a beachhead. 

Mines, artillery and massive stocks of lethal munitions are required to make invasion a horrific proposition. The Taiwan armed forces need to employ small-unit, dispersed tactics to fight forces that make it to the island. 

Ground units should emphasize the use of snipers as well as a military cadre who can organize civil militia-like resistance by the population at the city and village level. 

Finally, Taiwan needs robust mobilization plans, including the stockpiling of food and fuel. 

While the new F-16s would also play a critical role in this new strategy—every military needs some capability to protect its airspace—Taipei should direct resources elsewhere until President Obama or his successor reverses this regrettable decision. 

Taiwan can focus its investments on smaller, more survivable naval platforms; more lethal, precision-guided munitions; and a ground force that can sustain its fighting capability over the long haul. 

If the Obama Administration is unwilling to sell Taiwan big-ticket weapons, it can still help Taiwan develop this "contested zone" strategy. 

The U.S. should ramp up ongoing military ties to provide know-how and sell Taiwan lower profile, high-value capabilities that help the island develop precision strike forces and a more mobile, lethal ground force. One day Taiwan will get the air force it needs. 

In the meantime it should start to build "no go" zones around the island that signal to China that war is not worth the price.

China Warns Asia Not to Hide Behind U.S. Security Umbrella

By Bloomberg News

Vietnam's anti-China poster: "Cutting China's bovine tongue"

Asian countries should be on guard against the “danger” of feeling they can “do whatever they want” because of the U.S. military presence in the region, the Chinese Communist Party’s People’s Daily said in a commentary.
The opinion piece said it was understandable that some Asian countries may be uncomfortable with China’s rise and emphasized that the government in Beijing was working for “peaceful solutions” to conflicts such as territorial disputes in the South China Sea.
The commentary comes as countries such as the Philippines and Vietnam are increasingly voicing concerns over China’s claims to the waters.
“Asia remains a fertile ground for a Cold War mentality,” the commentary said.
“Asia is advancing, will never return to the Cold War, and China must have an important role in the future of Asian security.”
Competing claims to the South China Sea threaten to sour ties between China and the Association of Southeast Asian Nations members Vietnam, the Philippines and Malaysia as the countries compete over oil, gas and fisheries resources.
China, citing historical evidence such as pottery shards, claims a tongue-shaped swath of the sea demarked by nine dashes that extends hundreds of miles south from Hainan Island to the equatorial waters off the coast of Borneo.
The U.S. set off China’s ire in 2010 when Secretary of State Hillary Clinton, speaking at a regional summit in Hanoi, called resolving the competing claims to the sea “a leading diplomatic priority.”
That drew a rebuke from Chinese Foreign Minister Yang Jiechi, who said internationalizing the incident with U.S. involvement “can only make matters worse and more difficult to solve.”
Huang Jing, a professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore, said the commentary may offer a hint that China is actually willing to compromise with southeast Asian nations on the South China Sea in a bid to stave off deeper U.S. involvement.
One compromise could be giving up a claim to the entire sea demarcated by the nine-dash line, Huang said. Instead, China would focus its claims on the waters surrounding the reefs and shoals, which may placate Malaysia and the Philippines, he said.
“China knows it doesn’t have any ground to claim the nine-dash line,” Huang said.
“If China doesn’t clarify its position it gives America more of an excuse or more justification to intervene.” Today’s commentary was attributed to Zhong Sheng, a play on words that sounds like “voice of China.” Commentaries on topics that take a nationalist line, including one on Sept. 23 criticizing the U.S. decision to sell arms to Taiwan, often carry the same name.
Zhong Sheng likely represents a group of “hardliners,” Huang said.

Chinese to become world's biggest polluters

China's carbon emissions for each member of its population could overtake that of Britain as early as the end of next year, it has been revealed. 
By Peter Foster

Chinese are set to become the world's biggest per capita polluters
The prediction comes in a report which shows that the country's carbon footprint is expanding far faster than predicted.
A combination of an infrastructure building spree and the ramping up of carbon-intensive industries after the 2008 financial crisis means China is now being catapulted into the ranks of developed world countries when it comes to per person CO2 emissions.
China already emits more carbon per person than France and Spain and on current trends will surpass the United States in per person emissions as early as 2017, according to the report conducted by the Netherlands Environmental Assessment agency and sponsored by the European Commission.
"Due to its rapid economic development, per capita emissions in China are quickly approaching levels common in the industrialised countries," wrote the authors of the report, Long-Term Trend in Global CO2 Emissions.
"If the current trends in emissions by China and the industrialised countries including the US would continue for another seven years, China will overtake the US by 2017 as highest per capita emitter among the 25 largest emitting countries."
The 40-page report, based on recent results from the Emissions Database for Global Atmospheric Research (EDGAR) and latest statistics for energy use and other activities, is the most up-to-date assessment of China's position in global emissions tables.
China overtook the United States as the world largest producer of greenhouse gases in 2007, but has defended its emissions levels by arguing that its carbon footprint was reasonable for a developing country when calculated on a per person basis.
Analysts said the new data reflected not only China's spiralling emissions, but also the fact that, as the emissions of EU countries continued to fall, China was converging with the developed world more quickly than had been previously appreciated.
Michael Jacobs, a former special adviser to Gordon Brown on climate change and now a visiting professor at the London School of Economics, said the findings would force China to begin to accept it could no longer be treated as a developing country when it came to climate change.
"China doesn't want to acknowledge that it's no longer 'just another developing country', but as its total and per capita emissions rise, it's inevitable that China will have to take a greater degree of responsibility both domestically and in the international arena," he said.
As recently as the 2008 Copenhagen Conference, British officials were working on the principle that China's emissions were half those of EU countries and a quarter of US levels.
However, those assumptions now appear highly conservative.
The sheer speed and scale of growth in China's carbon emissions threatens to call into question the credibility of the country as the de facto leader of the developing world in international climate negotiations, with India still only emitting 1.5 tons per person.
Mr Jacobs said China should be given credit for its efforts to increase its use of renewable energy – it has doubled its wind and solar power capacity every year for the past six years – but the report showed those efforts were being dwarfed by the scale of China's industrial boom.
A £400 billion stimulus package, plus billions more in soft loans that have surged into China's economy since 2008, has seen Chinese power generation – mostly from coal – rise by 11.6 per cent in 2010, with carbon-intensive steel and cement production up 9.6 and 15.1 per cent respectively.
As a result, China's emissions rose 10 per cent in 2010 to reach 6.8 tons per person – compared with 5.9 tons in France; 8.1 tons in the UK and 16.9 tons for the United States.
As recently as 2000, China was emitting just 2.9 tons per person.
"China has begun to take more aggressive action to slow down its emissions growth," said Mr Jacobs. "What obviously remains in question is whether those changes are happening at a pace sufficient to offset the growth in China's emissions.
"These figures are another warning signal that, while both China and Europe are now acting on climate change, it's not happening fast enough to deal with the global problem."
Jiang Kejun, of China's Energy Research Institute, the country's leading climate think tank and closely affiliated to the government, said predictions that China would pass the US in emissions by 2017 wrongly assumed that China's emissions would not begin to slow.
"The assumption that China will catch the US on per capita basis by 2017 does not take into account the impacts of the recent Five Year Plan and the massive investment in renewable technologies which will slow the rate of China's emissions growth relative to the US," he said.
He added that a significant proportion of China's emissions were also used in creating goods that were exported to US and European consumers, a fact not reflected in their per capita emissions.
The report, produced for the European Commission's in-house science service, the Joint Research Centre, found that industrialised countries "collectively remain on target" to meet the original Kyoto Protocol objective of reducing emissions by 5.2 per cent from 1990 levels.
However, despite those efforts, global carbon emissions continued to rise at record levels last year as a result of China's growth boom and worldwide economic stimulus.
"Continued growth in the developing nations and economic recovery in the industrialised countries are the main reasons for a record breaking 5.8 per cent increase in 2010 in global CO2 emissions an absolute maximum of 33.0 billion tons," the report's authors concluded.
"Increased energy end-use efficiency, nuclear energy and the growing contribution from renewable energy cannot yet compensate for the globally increasing demand for power and transport. This illustrates the large and joint effort still required for mitigating climate change."

Visa Furor Over Dalai Lama Visit to Africa

By PETER WONACOTT

The Dalai Lama in India on Friday


JOHANNESBURG—South Africa on Tuesday refused to say whether it would grant an entry visa to the Dalai Lama, whose plan to visit next week puts the country's leadership in a tight spot with its largest trading partner, China..
The visa application by the Tibetan spiritual leader, and a lobbying effort in his support by his potential hosts, the Desmond Tutu Peace Trust, arrive at an awkward time for South Africa, a continental power that has turned to Beijing to help boost a flagging economy.
On Tuesday, South Africa's Deputy President Kgalema Motlanthe embarked on a visit to China, in part to drum up Chinese investment.
It was with Beijing's backing this year that South Africa joined Brazil, Russia India and China in a trading club of emerging economies known as BRICS.
Mr. Motlanthe is visiting at the invitation of Vice President Xi Jinping, tipped to be China's next leader.
The visa's approval during Mr. Motlanthe's visit could spark an unwanted diplomatic row with China.
Beijing has objected to the Dalai Lama's overseas visits because of the publicity they bring to politically raw issues, such as a global campaign for Tibet's independence.
The Dalai Lama is hoping to attend a birthday celebration of fellow Nobel Peace laureate Desmond Tutu, who turns 80 on Oct. 7.
He is also scheduled to deliver the inaugural Desmond Tutu International Peace Lecture, according to organizers.
The Dalai Lama has made three attempts, beginning in June, before he was informed of his completed application last week, according to his Pretoria-based representative, Sonam Tenzing.
"We don't see any reason why the visa process should be so protracted," said Mr. Tenzing.
"If there hasn't been pressure from China, then the South African people need to know why this application is taking so long."
A spokesman for the Department of International Relations and Cooperation, Clayson Monyela, said South Africa only first received a complete application on Sept. 20.
He said the department wouldn't comment on the application before a decision was made.
An official at China's Embassy in Pretoria declined to comment on the visit.
The apparent delay has infuriated the spiritual leader's potential hosts.
"The lack of a decision on whether or not our government will allow His Holiness into the country is proving a major stumbling block for the organizers of the celebrations," the trust's chairwoman, Dumisa Ntsebeza wrote in a letter, dated Monday, to the Department of International Relations and Cooperation.
The letter also stated that Ms. Ntsebeza had discussed the Dalai Lama's visa request—and China's sensitivities on the matter—with President Jacob Zuma.
Officials in the president's office couldn't be reached for comment.
Some analysts say the Dalai Lama's visa could be granted after the deputy president's trip, which ends Friday, to avoid a diplomatic dustup with China.
But for many South Africans, the visit has become a test of whether trade with China will trump matters of sovereignty.
"I can't understand why China would object, and if they do, I don't understand why our government should be influenced by them," said Ela Gandhi, a trustee of Gandhi Development Trust in Durban and granddaughter of Indian spiritual leader Mahatma Gandhi.
Ms. Gandhi said her trust had planned to bestow a peace award on the Dalai Lama at a ceremony in Durban.
The Dalai Lama fled Chinese-controlled Tibet in 1959 to India, where he headed a government in exile until his retirement earlier this year.
These days, The Dalai Lama says he seeks only more religious autonomy for his homeland—not independence—but Beijing remains sensitive to criticism that may stir unrest.
On Monday, two monks in southwestern China set themselves on fire to protest restrictions on religious freedom.
It isn't the first time the Dalai Lama has run into visa trouble trying to visit South Africa.
In 2009—the year China became its largest trading partner—Pretoria blocked the Dalai Lama from attending a peace conference.
Before then, says Mr. Tenzing, the Dalai Lama had visited South Africa three times: 1996, 1999 and 2004. The Dalai Lama has often mixed the spiritual with the political.
On trips overseas—even those religious in nature—he has sought to meet foreign leaders who can help bring attention to the situation in Tibet.
Some have been willing to meet; others not so much.
In July, he met with President Barack Obama, which drew criticism from China.
During a trip to France in August, the Dalai Lama didn't meet French President Nicolas Sarkozy, who was on holiday.
Beijing had blasted a 2008 meeting with the French president and warned that trade ties could suffer.

Tallying the Toll of U.S.-China Trade

Study Sees Americans Bearing High Economic Cost of Imports as Labor Market Struggles to Adapt 
By JUSTIN LAHART

Competition from China's imports in sectors such as toys is taking more of an economic toll in the U.S. than thought.

For years, economists have told Americans worried that cheap Chinese imports will kill jobs that the benefits of trade with China far outweigh its costs.
New research suggests the damage to the U.S. has been deeper than these economists have supposed.
The study, conducted by a team of three economists, doesn't challenge the traditional view that trade is ultimately good for the economy.
Workers who lose jobs do eventually find new work or retire, while the benefits from trade, such as lower prices, remain.
The problem is the speed at which China has surged as an exporter, overwhelming the normal process of adaptation.
The study rated every U.S. county for its manufacturers' exposure to competition from China, and found that regions most exposed to China tended not only to lose more manufacturing jobs, but also to see overall employment decline.
Areas with higher exposure also had larger increases in workers receiving unemployment insurance, food stamps and disability payments.
The authors calculate that the cost to the economy from the increased government payments amounts to one- to two-thirds of the gains from trade with China.
In other words, a big portion of the ways trade with China has helped the U.S.—such as by providing inexpensive Chinese goods to consumers—has been wiped out.
And that estimate doesn't include any economic losses experienced by people who lost their jobs.
"There are really huge adjustment costs to local communities that were far worse than people had appreciated," said David Autor of the Massachusetts Institute of Technology, who conducted the study with Gordon Hanson of the University of California, San Diego, and David Dorn of the Center for Monetary and Financial Studies in Madrid.
While Mr. Autor, who specializes in labor markets, receives some funding from the National Science Foundation, this research was conducted independently of any interest group.
The theory of comparative advantage, framed two centuries ago by British economist David Ricardo, says nations prosper by focusing on what they do best and trading with other countries that have different strengths.
But amid the surge in inexpensive imports over the past decade, some prominent economists have challenged that view.
In a 2004 article, the late Nobel Laureate Paul Samuelson argued that while trade may benefit some Americans, it does so by "decimating" the wages of blue-collar factory workers.
Princeton University economist and former Federal Reserve Board vice chairman Alan Blinder, once a champion of free trade, in recent years has argued that U.S. firms' increased outsourcing to low-wage countries puts millions of American jobs at risk.
Michael Spence, a Nobel Laureate economist at New York University, said the new finding reflected how prevailing theories of trade aren't up to the task of dealing with the breakneck pace of China and other developing economies.
Since the world has never seen such large countries grow so quickly, history isn't much of a guide.
"It's not like we can look to the past and ask ourselves what happened last time this happened, because there wasn't a last time," he said.
Because the surge in goods from China has swamped import growth from other low-wage countries, the researchers focused on Chinese imports.
They studied 722 clusters of interrelated counties covering the entire U.S.
Some communities were more exposed to China, because they produced goods such as small appliances where Chinese imports have surged.
Other regions were concentrated in industries like heavy machinery where Chinese competition has been slower to build.
A pattern emerged, with areas where factories were most exposed to Chinese import growth faring worse than the less exposed.
Between 2000 and 2007, a community at the 75th percentile—one with a greater exposure to Chinese import growth than 75% of all communities—saw a manufacturing employment decline of roughly one-third more than communities at the 25th percentile.
Factory job losses were just the beginning.
High-exposure areas tended to see employment outside manufacturing fare worse than in low-exposure areas.
With fewer high-paying factory jobs supporting the local economy, and a growing pool of former factory workers entering the labor market, nonmanufacturing wages in the high-exposure areas were depressed.
The economists also found that higher exposure to Chinese imports led to larger increases in unemployment insurance, food stamps, disability payments and other government benefits.
Those add up to big losses, they said, because the higher taxes the government must collect to pay for benefits, and the way benefits reduce people's incentive to work, makes the economy less efficient. Dartmouth College economist Douglas Irwin said the new research painted too bleak a picture.
There are important benefits of trade that aren't captured, he said, because nobody has figured out how to measure them.
For example, commodity-producing countries the U.S. exports to have been boosted by China's growth, creating greater demand in those nations for U.S. goods.
"But if we had more exports of (Caterpillar) heavy equipment to Australia, that's not being measured" as a gain from trade with China, he says.
It's also worth noting that many U.S. manufacturing jobs have been lost to factors such as the recession, outsourcing and technology, not Chinese imports.
The economists themselves were surprised by the results.
Research Mr. Hanson conducted in the 1990s, based on data from before China became such a global player, suggested trade's effect on the U.S. labor market was small.
"With the China study, I did not anticipate that a dozen years could make such a large difference in terms of the greater quantitative impact of trade," Mr. Hanson said.
The research is still awaiting peer review, but the economists have been presenting it at conferences.
In earlier versions, they calculated gains from trade with China were completely wiped out by the losses from the increased use of government benefits.
Some conference participants objected that the economists didn't weight appropriately how much of the rise in imports from China was due to growing American demand rather than low-cost Chinese goods winning out over higher-priced U.S. ones.
The three economists adopted a more conservative approach.

Trade With China Destroys American Jobs, Drags Down American Wages: Study

By Alexander Eichler

The explosion in Chinese exports in recent years has resulted in a flood of inexpensive goods for American consumers.
It may have also come at a large cost to American jobs and wages.
The U.S. has lost nearly 2.8 million jobs in the past decade as manufacturing in China has become cheap and plentiful, according to a recent report from the Economic Policy Institute.
The job losses have affected all 50 states and the District of Columbia, with California, Texas, New York and Illinois being especially hard hit.
With Chinese exports to the U.S. far outpacing American exports to China, U.S. manufacturing has suffered particularly, with 1.9 million jobs in that sector evaporating since 2001 as a result of the trade gap.
More than a third of the workers who lost manufacturing jobs ended up dropping out of the labor force, the EPI notes, while those who managed to find new jobs saw their average wages reduced by more than 10 percent.
The job losses of the past decade, though, are only the most recent chapter in a much longer story.
Since 1990, rising unemployment, falling wages and declining labor-force participation rates for individual counties all appear to be correlated with how much those counties are exposed to competition from China. This information comes from a recently published study conducted by three economists, who compared trade data for local U.S. markets on a county-by-county basis and found some alarming results.
Not only does trade with China push down wages and drive up unemployment, the study authors found, but it also takes a bite out of U.S. government revenue in the form of unemployment insurance and social-services assistance to laid-off workers.
These losses offset what has historically been seen as the major economic advantage from the U.S.-China trade relationship -- cheap goods for American consumers.
Even that is not as sure a prospect as it once was, since rising wages for Chinese workers may eventually drive the price of exports up.
Critics argue that China has pulled so far ahead of the U.S. in the exports game because it has taken steps to keep the value of its currency artificially low, thus making its own exports to the U.S. extremely cheap. China's low-valued currency is also believed to have played a role in creating the housing bubble that eventually triggered the financial crisis and Great Recession, and today it's seen as a factor keeping the global economy from recovering more quickly.
Even though China's trade boom has had ancillary benefits for some other countries -- notably Germany, which sells China the equipment it needs for manufacturing -- its harmful effects on the U.S. labor market have been greater than previously realized, according to the authors of the study on trade exposure. President Obama has come under criticism from the right and the left alike for not doing more to confront China on the alleged devaluation of its currency.
Next week, the Senate will consider a bill that proposes to forbid exports into the U.S. from any country found to be manipulating the value of its currency -- a measure that seems pointed at Chinese policymakers.

The workings of China's mafia state laid bare

By Peter Foster

The ancient right of Chinese to come to the capital and petition the "emperor" is once again under the spotlight here.
In the latest case, there has been an online outcry after a tourist from the central province of Henan was mistakenly beaten and dumped on a roadside after being picked by up "security guards" in Beijing.
His error?
Sharing a hotel dorm room with three other petitioners who – like many thousands aggrieved people in China – were trying to get to China’s top bureau for making complaints, the State Bureau for Letters and Calls, in the vain hope of getting justice.
What’s really amazing is how China’s state media reports the case as if this kind of extra-legality is a perfectly routine piece of news.
Which is to say, the "news" part comes from the mistaken identity of the tourist, not the fact that such people get beaten all the time.
The Xinhua story (here, in English) adds that the head of the local Letters and Calls bureau has been removed, a second official suspended and four others issued with warnings.
But it doesn’t seem exceptional that a local government should hire goons – “a Beijing security company” – to go round kidnapping its citizens, or make any mention of the three other, genuine petitioners who were also, we are left to presume, thrown into the van back to Henan, beaten and then dumped by the wayside. Presumably, they deserved it.
And while the boss of the Zhejiang Letters and Calls Bureau gets “removed from his post” – quite possibly to reappear in another position of equal rank – the other one escape with a suspension and the remaining four with a warning.
So when you read about rising levels of "social unrest" in China, this kind of business is part of the reason why.
According to Sun Liping at Tsinghua University there were 180,000 unrest incidents in China last year, which is almost double the number reported in 2005.
A great many of these relate to land-grab issues – the state grabbing land off citizens and paying scant compensation, and then flogging it on at market rate to turn massive profits, on which state government depends.
As the Wall Street Journal observes, with local governments scrambling to pay their debts after three years of credit splurge, these kinds of disputes are only likely to get more plentiful as the local governments milk their biggest cash cow – flipping stolen land – harder and harder.
Those dispossessed folk that try to go over the heads of local officials and seek redress in Beijing, can expect to be throw into the back of a Transit, get a good hiding and then be dumped at the roadside as a warning to others.
And no one will really bat an eyelid.
It’s hard to think of a more transparent demonstration of the workings of China’s mafia state.

China tensions rekindle Vietnam war debate

By Ian Timberlake

Vietnam has a competing claim with China over sovereignty of the potentially oil-rich Paracel and Spratly island groups

On the edge of Saigon lies a cemetery containing the graves of hundreds of South Vietnam's war dead

It took until 2004 for the government to recognise Vietnamese expatriates as an integral part of the nation

SAIGON -- Nearly four decades after the end of a war which divided Vietnam, a debate over national reconciliation between former foes has been rekindled by tensions with China.
Despite government policies designed to woo its wartime opponents -- many of whom fled abroad -- those linked to the old US-supported regime in South Vietnam still feel stigmatised by communist authorities.
But recent anger at Beijing's perceived aggression in South China Sea territory has led to unprecedented public recognition of southern fighters who stood up to the country's giant northern neighbour.
Vietnam, which has a competing claim with China over sovereignty of the potentially oil-rich Paracel and Spratly island groups, has objected to what it described as Chinese harassment of its ships in the disputed waters.
The issue has stoked nationalist sentiment and in July protesters in Hanoi -- the communist north's historic heartland -- held aloft the names of 74 South Vietnamese troops who died in a 1974 battle with Chinese forces in the Paracels.
It was the first time "there was a kind of honour" for soldiers from the south, said Nguyen Xuan Dien, a Hanoi scholar who joined the anti-China demonstrations, which were unusual in authoritarian Vietnam.
"I think that the state of Vietnam should have done that before the people," said Le Hieu Dang, 67, an underground communist agent in South Vietnam during the war who now works with the Ho Chi Minh City Fatherland Front, a coalition of state-linked social and other organisations.
Inspired by the action in Hanoi, he and other intellectuals in Ho Chi Minh City, formerly Saigon, held their own tribute to all Vietnamese "who died for the territorial integrity of the nation" in battles against China.
A South Vietnamese navy veteran of the Paracels battle said this recognition was "a very good signal". "These people died protecting the country, not protecting the Saigon regime."
On the edge of Saigon lies a cemetery containing the graves of hundreds of South Vietnam's war dead. Communist military units based on the burial ground after the war were removed in recent years and the public has been allowed to mourn in private.
But the site bears scant resemblance to an official war memorial -- occasional maintenance has not stopped tall grass from encroaching and while some graves are cared for and adorned with bright flowers, others are moss-covered and crumbling.
Nguyen Manh Hung, a former member of the Saigon government who fled to the United States on the war's final day in 1975, said authorities should turn the site into an official memorial that could attract former veterans.
"Whoever can pull this off and give a speech at the opening ceremony attended by respectable people on both sides of the conflict will have his place in history assured," said Hung of George Mason University in Washington.
He said the nation cannot be genuinely reconciled as long as those who fought for the South continue to be portrayed as unpatriotic "American lackeys", rather than fighters in what was "in a sense, a civil war".
The country was divided into the communist North and US-backed South from the end of French colonial rule in 1954 until April 30, 1975 when northern forces over-ran Saigon.
Hundreds of thousands risked their lives to escape on boats when the war ended.
They joined a Vietnamese diaspora that now numbers about four million, many of them in the US, Australia and Europe.
It took until 2004 for the government to recognise Vietnamese expatriates -- called "Viet Kieu" -- as an integral part of the nation.
As the country moves increasingly closer to its former American enemy, it has implemented policies aimed at wooing expatriate talent and capital including rights to property ownership, visa exemptions and dual nationality.
A government spokeswoman said the measures apply to "all overseas Vietnamese regardless of whether they have worked for the previous regime or not", adding that Viet Kieus contribute significantly to the country's development.
But Dang in Saigon said an unwritten law excludes those with links to the South Vietnamese government from Communist Party membership.
This effectively prevents them from working in anything but the lowest levels of the civil service or the numerous state-owned companies.
An open letter to the government signed last month by 38 foreign-based Vietnamese scientists and other experts said there remained "widespread suspicion and distrust" of them within Vietnam's leadership.
"The country and people of Vietnam are demanding that their leaders promote national strengths and unity amongst the entire people, inside and outside the country, to meet present dangers," it said, referring to China.
Dang said it is imperative for both sides to work to overcome their suspicions, otherwise "we cannot create the strength" to counter Beijing's power.
"The war has been over for more than 30 years but the national reconciliation issue is still considered a burning one," he said.

Journalist Is Detained in China for Article on Sex Slaves

By ANDREW JACOBS

Dungeon: A former fireman would enter his sex lair through this, one of seven security doors, to rape girls who were too weak to resist

Slavery: The complex in the central Chinese city of Luoyang where former fireman Li Hao kept women to use for sex
BEIJING — For a nation not yet inured to lurid and senseless crime, a report that a former civil servant in central China kept six women enslaved in an underground bunker — and that he killed two of them — was shocking enough.
But perhaps almost as disturbing, at least to some readers, was that the journalist who exposed the crime more than two weeks after the suspect’s arrest was detained by security agents who accused him of revealing state secrets.
After his release from questioning on Thursday, the reporter, Ji Xuguang, wrote an article that accused the authorities of trying to keep the public in the dark about a heinous crime that unfolded less than two miles from the city’s public security bureau.
“I was only thinking about how to make my story as accurate as possible and to satisfy the public’s right to know, but I soon discovered that I failed to address the most important issue — face,” wrote Mr. Ji, a reporter for Southern Metropolis Daily, one of the country’s most aggressively independent publications. “Before the truth becomes a state secret, the public and myself need answers.”
Still, much of the national media on Friday were mesmerized by the horrifying details of the case, which took place in the city of Luoyang, in Henan Province.
According to Mr. Ji’s account, the suspect, Li Hao, 34, kidnapped the women, ages 16 to 24, from the karaoke parlors where they worked and imprisoned them in a 215-square-foot dungeon he dug beneath a rented basement space.
Over the course of two years, Mr. Li repeatedly forced the women to have sex with him, Mr. Ji said. According to a police official who provided details to Mr. Ji, the suspect kept his captives perpetually starved so they would have little energy for escape, but he also gave them two computers on which they could “kill time” by watching movies and playing games.
Mr. Li, who is married with an infant son, lived elsewhere in the city.
Mr. Li’s arrest came on Sept. 6, when one of the women escaped and found her way to the police.
Mr. Ji said the rescued women were still in police custody on suspicion that they had a hand in the murders of the two women.
In his posting on Friday, Mr. Ji said he stumbled upon the story this week after spending a few days in Luoyang to investigate the murder of a local television reporter.
In his follow-up article, he said his questioners deemed the case a state secret because, he later learned, they feared that its revelation might tarnish Luoyang’s quest to become a “Civilized City” as part of a national competition.

Dalai Lama says China to have no say on successor

By Tenzin Tsering

The spiritual leader said he would lay out "clear guidelines to recognise the next Dalai Lama"DHARAMSHALA, India — Tibet's spiritual leader the Dalai Lama on Saturday said he will decide when he is "about 90" whether he should be reincarnated and added firmly that China should have no say in the matter. 

The Dalai Lama made the statement in a 4,200-word document issued after a gathering of leaders of the four schools of Tibetan Buddhism in the northern Indian hill town of Dharamshala. 

"When I am about 90, I will consult the high lamas of the Tibetan Buddhist traditions, the Tibetan public, and other concerned people who follow Tibetan Buddhism, and re-evaluate whether the institution of the Dalai Lama should continue or not," he said. 

"On that basis we will take a decision," the 76-year-old spiritual leader, who is the 14th Dalai Lama, said. "Apart from the reincarnation recognised through such legitimate methods, no recognition or acceptance should be given to a candidate chosen for political ends by anyone, including those in the People's Republic of China," he added. 

Under Tibetan tradition, monks identify a young boy who shows signs he is a reincarnation of a late leader. The spiritual leader said he had decided to lay out "clear guidelines to recognise the next Dalai Lama" while he was still "physically and mentally fit" so that there was "no room for doubt or deception." 

"The person who reincarnates has sole legitimate authority over where and how he or she takes rebirth and how that reincarnation is to be recognised," he said. 

He said that if it was ultimately decided that there was a need for a 15th Dalai Lama to be recognised, responsibility for doing so would mainly lie with officers of the Dalai Lama's trust. 

"They should consult the various heads of the Tibetan Buddhist traditions," he said. 

The institution of the Dalai Lama has been in existence since 1642, according to the Dalai Lama's office. Former Tibetan prime minister in exile Samdong Rinpoche told reporters that the Dalai Lama's statement should "put to rest" all queries about the reincarnation procedure. 

Many predict China will simply appoint its own successor, raising the prospect of two Dalai Lamas -- one recognised by Beijing and the other chosen by exiles or with the blessing of the current Dalai Lama. 

This happened in 1995 when China rejected the Dalai Lama's choice to be the next Panchen Lama, the second-highest ranking Tibetan Buddhist, and picked its own reincarnation. 

The Chinese-raised Panchen Lama, Gyaincain Norbu, is now 21 and often extols Beijing's rule over Tibet. The Dalai Lama's selection, Gedhun Choekyi Nyima, has not been seen since 1995 after he was detained by China. 

The Dalai Lama had earlier signalled a willingness to break with custom by choosing a successor before his death or among exiles outside Tibet. 

He had also said he might be open to electing the next Dalai Lama. 

The Dalai Lama fled Tibet following a failed uprising against Chinese rule in 1959. 

He later founded the government in exile in Dharamshala after being offered refuge by India. 

China vilifies the Dalai Lama as a "separatist" who incites violence in Tibet, while the Dalai Lama insists his sole focus is a peaceful campaign for greater autonomy for his homeland.

Blame-China Chorus Grows as Solyndra Falls

Energy Can’t Compete With China Subsidies
By William McQuillen

Workers move pallets of solar panels at SolarWorld's factory in Hillsboro, Oregon. “We can compete with any company from any country in the world, but it becomes difficult to compete with the communist government of China,” said Ben Santarris, a SolarWorld spokesman. “The subsidies run across every aspect of a company’s life.”
Solar modules are shown at the Southern California Edison (SCE) solar array in Porterville, California.
The collapse of Solyndra LLC has renewed demands from U.S. lawmakers and union leaders that the Obama administration pursue unfair-trade complaints against China for out-sized subsidies to its clean-energy companies.
“The American solar industry is facing unparalleled challenges, and without the leadership of your administration this industry may disappear,” Senator Ron Wyden, an Oregon Democrat, said in a Sept. 8 letter urging President Barack Obama to file a complaint against China with the World Trade Organization. Wyden wrote two days after Solyndra, which received $535 million in loan guarantees from the Energy Department, filed for bankruptcy protection.
China provided $30 billion in credit to its biggest solar manufacturers last year, about 20 times the U.S. effort, Jonathan Silver, executive director of the Energy Department’s loan program, told a congressional panel Sept. 14.
China “frequently provides both zero-cost financing, occasionally free land and other kinds of incentives and subsidies” to its wind and solar companies, Silver said.
Silver called for the U.S. “to take on this challenge” for a global market that will be “worth trillions of dollars.”
He didn’t join critics such as Wyden and the United Steelworkers union who say China’s subsidies should be challenged as unfair.


‘Trade War’ 
“We should not sit back and say we are afraid to start a trade war,” Thomas Conway, international vice president for the Pittsburgh-based United Steelworkers said in an interview.
“We are in a trade war, and we are losing.”
The 1.2 million-member union petitioned the administration last year to investigate China’s aid to clean-energy companies.
The U.S. Trade Representative’s Office responded by filing a complaint in December with the WTO saying China violated rules of the Geneva-based trade arbiter.
China’s Special Fund for Wind Power Manufacturing required recipients of aid to use Chinese- made parts and amounted to a prohibited subsidy, the U.S. said.
Before the WTO acted on the complaint, China made it moot by ending that aid in June, according to the U.S. Solyndra Chief Executive Officer Brian Harrison and Chief Financial Officer W.A. Stover today invoked their constitutional right against self-incrimination and refused to testify at a hearing of the House Energy and Commerce Committee investigation panel.
California state officials applied Sept. 2 for U.S. Trade Adjustment Assistance for 1,100 former Solyndra employees.
The aid is available to workers whose jobs are lost to overseas competition.
The Labor Department said it is weighing the application.


‘Failed Business Model’ 
Republican Senator Orrin Hatch of Utah questioned the request, saying the high cost of Solyndra’s solar devices compared with its U.S. competitors undermined the rationale that the company was done in by Chinese competition.
“If you cannot even out-compete U.S. companies, it wasn’t foreign competition that ruined your business, it was simply a failed business model,” Hatch said in a statement Sept. 20.
Solyndra built a $733 million manufacturing plant on the bet that demand for its product would increase.
Last year it received a warning from its auditor questioning whether it would remain a “going concern” and withdrew plans for an initial public offering.


Production Costs 
Solyndra was producing panels at a cost of $4 a watt and selling them for $3.24 a watt, according to a filing with the Securities and Exchange Commission before the public offering was canceled.
The administration hasn’t taken action on the union’s complaints about other wind-power subsidies or aid to the solar industry.
The Steelworkers cited China for providing export credits, preferences in bidding and forced transfers of technology and said China discriminated against companies based in other nations. 
“The environment-friendly green-technology policies introduced by the Chinese government are for the purpose of energy protection and ensuring sustainable development, which are in conformity with WTO rules,” Wang Baodong, the spokesman for the Chinese Embassy in Washington, said in October.
Wang said yesterday that the debate over subsidies “is not a new issue.”
Officials from the U.S. Trade Representative’s office didn’t return e-mails or calls seeking comment on the status of the remaining complaints.


‘Challenged Aggressively’ 
China’s violations “should be challenged aggressively,” Scott Paul, executive director of the Alliance for American Manufacturing in Washington, with members such as U.S. Steel Corp., said in an interview. Without U.S. efforts to challenge unfair trade, it “would be an uphill battle.”
Erin DiPietro, a spokeswoman for Pittsburgh-based U.S. Steel, referred questions to the trade group. Solyndra of Fremont, California, ceased operations on Aug. 31, the third U.S. solar manufacturer in a month to fail in the face of lower-cost Chinese panels and weak global demand.
The other two, Evergreen Solar Inc. (ESLR) and SpectraWatt Inc., hadn’t received U.S. guarantees.
Not all U.S. companies complain about competition from low-wage nations such as China.
MEMC Electronic Materials Inc. of St. Peters, Missouri, exports most of its polisilicon used for solar panels to China, contributing to an 83 percent increase in U.S. solar-product exports to $5.63 billion last year. American Superconductor Corp. of Devens, Massachusetts, generated most of its revenue last year selling electrical systems to China’s wind-turbine manufacturers.


First Solar 
First Solar Inc. (FSLR) of Tempe, Arizona, the world’s largest thin-film solar producer, fell 9 percent in New York trading yesterday, the most in almost two years, after saying it’s in talks to sell a 550-megawatt project in California that failed to win a U.S. loan guarantee.
Alan Bernheimer, a spokesman for the company, referred calls about competition from China to the Solar Energy Industries Association.
Clean-energy companies that failed should be “a wake-up call” that the U.S. needs to do more to aid manufacturing, Rhone Resch, president of the Washington-based solar association, said in an interview.
The U.S. Trade Representative’s office should make sure China hasn’t gone too far, he said.


‘Held Accountable’ 
“It is very important that the petition be fully investigated, and if China is found to break the rules, they need to be held accountable,” Resch said.
Elizabeth Salerno, director of industry data and analysis for the American Wind Energy Association in Washington, which has 2,500 member companies globally, declined to speak about Chinese competition. She said the U.S. needs consistent energy policies that would attract international investment.
Operators of U.S. solar and wind factories and installations that face Chinese competition often have their own international connections.
SolarWorld USA, which is lobbying lawmakers such as Wyden to help protect its 1,300 jobs in Oregon, is owned by SolarWorld AG (SWV) of Bonn, the biggest German maker of solar modules.
The company said Sept. 2 that it was cutting almost 200 jobs at its facility in Camarillo, California.
“We can compete with any company from any country in the world, but it becomes difficult to compete with the communist government of China,” Ben Santarris, a spokesman for SolarWorld USA, said in an interview.
“The subsidies run across every aspect of a company’s life.”