September 3, 2011: The U.S. recently released its annual report on Chinese military power, and the main point was that growing Chinese military capabilities were being used to coerce or covertly attack other countries. Chinese neighbors agreed with this, as did more distant targets (of Chinese Cyber War attacks). China promptly denounced the American analysis as “baseless.” But the reality is otherwise. The growing Chinese navy is increasingly showing up to enforce Chinese claims over disputed islands, and large areas of (according to the rest of the world) international waters. China’s neighbors are increasing their naval capabilities (more ships, aircraft and weapons) and getting cozy with the United States (which has the largest fleet on the planet.)

During the recent fighting in Libya, the rebels complained of encountering government troops armed with new Chinese weapons. Accusations were made that China was selling weapons to the Kaddafi dictatorship despite a UN embargo. A little investigating found that this was indeed the case, and that Chinese arms merchants had approached the Libyan government earlier in the year, offering to sneak the weapons in via Algeria and South Africa. The last shipments appear to have arrived in July. Back then, there were reports of smugglers moving truckloads of weapons across the Algerian border into Libya.

In response to Chinese spy ships operating in the area, India is increasing its military forces in its Andaman (off the Burmese coast), Nicobar (near Indonesia) and Lakshadweep (off the southwest Indian coast) Islands. This means increasing maritime and electronic surveillance capabilities on the islands, as Chinese naval forces are expected to be a more frequent sight around these islands. Indian politicians are complaining about the expense of all these security measures (including creating and deploying new units on the Chinese border). But popular fear of growing Chinese military power forces the politicians to come up with the money.

The Chinese government has apparently leaned on some of the most prominent hacker groups to advise their members and followers to avoid hacking Chinese targets, and to be more discreet (don’t get caught) when attacking foreign targets. Those who are not skilled enough to avoid getting caught, are advised to not attack foreign corporations and governments at all. China has long maintained remarkable control over its own hackers, organizing many of them into a semi-official cyber-militia and permitting, and even encouraging, a lot of illegal hacking against foreign targets. The hacker organizations also served as a recruiting pool for government and military Cyber War organizations. But despite all the precautions, a lot of the subsequent Cyber War and espionage operations were traced back to China. This has caused a growing crescendo of accusations and threats from foreign nations. While China denies everything, it has now told its hackers to cool it, or else. That means something in China, where “enemies of the state” are still sent to labor camps or executed. Unfortunately, given the size and nature of the hacker underground (even in China), the cease and desist orders could not be given in secret.

It’s also recently been revealed (via wikileaks) that Apple Corporation set up a major anti-counterfeiting effort operation three years ago. One of the main targets was China, where corrupt officials tolerate massive counterfeiting, despite government promises to stamp out the practice. The Apple investigation resulted in considerable detail about counterfeiting operations in China, and the extent of official and unofficial government involvement. The U.S. government used these details to put more pressure on China to shut down the rampant counterfeiting and government approved hacking.

While the Chinese government is making a big deal about investing in North Korea, via new “free trade zones,” Chinese government controlled business publications are putting out articles detailing why such efforts have little chance of success. North Korea is still considered, even by the Chinese, as too unstable an area for any major investments. This is known from the experience of Chinese traders and businessmen who have been operating (at great risk) in North Korea for decades.

Several years of growing inflation in China is causing more unrest. Government efforts to curb the rising prices, like by restricting credit to companies, is being undermined by corruption, which makes it possible for companies to get loans from overseas lenders. This demonstrates that the widespread corruption not only creates popular unrest, but limits the ability of the government to govern.

August 29, 2011:  A court sentenced a senior Buddhist monk to 11 years in jail for his role in allowing another monk to kill himself last March. The dead monk burned himself to death as a protest against Chinese persecutions of Tibetan Buddhists. Last month, another monk burned himself to death in protest.

August 26, 2011: Chinese web portal Sina.com, following government orders, announced that it had suspended several microblogs (the local equivalent of Twitter, which is banned in China) that had spread “misinformation.” What microblogs more frequently do is spread news the government wants to control (which is why Twitter cannot operate in China.) The Sina.com move generated a lot of protest by many other microbloggers. The government seeks to control Internet use to avoid stirring up unrest. But these censorship efforts often do just that.  The government is also increasing its use of blacklists of popular culture items, like foreign (especially American) songs that cannot be available on the Chinese Internet. Recent hits by Lady Gaga and Beyonce are typical of the forbidden sounds. The stuff gets through anyway, aided by increased demand because of blacklist status. If the government doesn’t like it, it must be good.

August 25, 2011: State run TV removed a video from its web site that showed (apparently by accident) a Cyber War tool (that can launch a DDOS attack on another site and shut it down temporarily.) The government denied that the Cyber War program was government property, but refused to comment further. The video first appeared on TV in July.

August 24, 2011:  The U.S. Department of Defense released its annual review of Chinese military power. Over the next week, China denounced the implications (that all this new Chinese military capabilities might be a problem.)

August 18, 2011: For the first time, Chinese PC shipments (18.5 million for this past April-June) exceeded those of the U.S. (17.7 million) for a three month period.