The deadliest unrest in years in China’s western region of Xinjiang was carried out by a gang engaged in “religious extremist activities”, state media reported, saying the group had been busy buying weapons and raising money.
Beijing initially called last week’s incident in which 35 people were killed a “terrorist attack”.
Xinjiang is home to the mainly Muslim Uighur people who speak a Turkic language. Many deeply resent what they call Chinese government restrictions on their culture, language and religion. Beijing accuses extremists of separatism.
The animosity between the majority Han Chinese and the Uighurs poses a major challenge for China’s Communist Party leaders. President Xi Jinping, who took office in March, has called for the unity of all ethnic groups in China.
According to reports on the government website of Xinjiang and the state news agency Xinhua, last week’s attacks occurred after police arrested a member of the gang.
The next day the same gang went on a rampage in the remote township of Lukqun, about 200 km (120 miles) southeast of Xinjiang’s capital of Urumqi.
The group attacked a police station, shops and a construction site. Twenty-four civilians, both Uighur and Han Chinese, and police were killed, along with 11 gang members.
“Since February, Ahmatniyaz Siddiq and others were engaged in religious extremist activities, listening to violent terrorist recordings,” said the reports.
“They formed a violent terrorist group of 17 members, and since mid-June were raising money, and buying knives, gasoline and other tools for crime.”
Last week’s killings marked the deadliest unrest since July 2009, when nearly 200 people were killed in riots pitting Uighurs against ethnic Chinese in the region’s capital Urumqi.
“Terrorist organizations should be aware that the Chinese nation and its people are determined to safeguard the country’s territorial integrity and national unity against all enemies,” Xinhua said in a separate commentary on Sunday.
“Any attempt to sabotage will eventually fail.”
Two days after the deadly attack, more than a hundred people, riding motorbikes and wielding knives, attacked a police station in Xinjiang, state media reported.
Source: Reuters “China says ‘religious extremists’ behind Xinjiang attack”
China’s troubled Xinjiang hit by more violence: state media dated June 29
China: Three Further Terrorist Attacks in Xinjiang dated June 29
China: Xinjiang Serial Terrorist Attacks Death Toll Rises to 35 dated June 27
China agreed to hold formal talks with Southeast Asian nations on a plan to ease maritime tensions on Sunday as the Philippines accused it of causing “increasing militarization” of the South China Sea, one of Asia’s naval flashpoints.
The rebuke by Philippine Foreign Minister Albert del Rosario at a regional summit in Brunei came a day after China’s state media warned of an inevitable “counterstrike” against the Philippines if it continued to provoke Beijing.
Friction between China and the Philippines over disputed territories has surged since last year due to several naval stand-offs as China asserts its vast claims over the oil and gas rich sea.
The heated rhetoric came as both China and the 10-member Association of Southeast Asian Nations (ASEAN) claimed progress in efforts to agree a mechanism aimed at defusing naval tensions.
China agreed to hold “official consultations” on a proposed Code of Conduct (CoC) governing naval actions at a meeting with ASEAN in China in September, a step that Thailand’s foreign minister hailed as “very significant”.
The two sides had already agreed to hold the foreign ministers’ meeting, which will follow a special ASEAN ministers’ gathering on the South China Sea issue in Thailand in August.
“We agreed to maritime cooperation to make our surrounding sea a sea of peace, friendship and cooperation,” Chinese Foreign Minister Wang Yi told reporters in Brunei.
But Wang stressed that any progress on agreeing the new framework would be dependent on countries following a confidence-building “declaration of conduct” agreed in 2002 which it accuses the Philippines of violating.
“Both China and other coastal states in the South China Sea are making efforts for a stable South China Sea. I believe any activity taken by individual claimant countries to go against the trend will not enjoy the support of the majority of countries and will not succeed either.”
“MASSIVE” PRESENCE CONDEMNED
In the latest stand-off, the Philippines accused China of encroaching on its territory after three Chinese ships converged just 5 nautical miles from a small reef where the Philippines maintains a small military force.
This month the Philippines moved more troops and supplies to the reef, which is within its 200-nautical mile economic exclusion zone. China, which does not recognize the zone, condemned it as an “illegal occupation”.
Del Rosario said the “massive” presence of Chinese military and paramilitary ships at the Second Thomas shoal and at another reef called the Scarborough Shoal – the site of a tense standoff last year – was a threat to regional peace.
“The statement on counterstrike is an irresponsible one. We condemn any threats of use of force,” Del Rosario told reporters following a meeting of ASEAN foreign ministers.
He said the ministers had discussed China’s ongoing “illegal” occupation of the Scarborough Shoal, which is just 124 nautical miles of the Philippine coast.
The worsening dispute comes as Philippine-ally the United States, which says it has a national interest in freedom of navigation in the South China Sea, shifts its military attention back to Asia. Secretary of State John Kerry is due to arrive in Brunei on Monday to join the regional summit.
Critics say China is intent on cementing its claims over the sea through its superior and growing naval might, and has little interest in rushing to agree a code of conduct with ASEAN nations, four of which have competing claims.
Divisions among ASEAN over the maritime dispute burst into the open a year ago when a summit chaired by Chinese ally Cambodia failed to issue a closing communiqué for the first time in the group’s 45-year history.
Source: Reuters “China agrees South China Sea talks amid new row with Manila”
Data this week will add spice to speculation as to when the U.S. Federal Reserve will start scaling back its stimulus while reinforcing the realization that China is serious about shifting to a less frantic growth rate.
Fed policy makers have sent mixed messages since Chairman Ben Bernanke’s June 19 announcement that the central bank was on course to end its bond buying, now running at $85 billion a month, by mid-2014.
Several officials reassured markets last week that the phase-out of the central bank’s asset purchases would depend on the economic data, not the date.
But Fed Governor Jeremy Stein on Friday explicitly mentioned September as perhaps the time to decide whether to start heading for the exit. He also stressed the need to take a long view of the improvement in the economy.
That being the case, a projected increase of 166,000 U.S. non-farm payroll jobs in June and a dip in the jobless rate to 7.5 percent could be enough to cement the case for an early tapering of the Fed’s ‘quantitative easing’ (QE) program
But Brian Levitt, senior economist with OppenheimerFunds in New York, said the fact remained that U.S. growth was modest; given the pace of job creation, it could take a couple of years before unemployment approaches the 6.5 percent rate the Fed has tentatively set as the threshold for raising interest rates.
“It would be nice to see a few months in a row of over 200,000 jobs created before we start thinking about what an exit strategy for the Federal Reserve is going to look like, especially when you think that inflation by any measure is contained here in the United States,” Levitt said.
CHINA SWITCHES GEARS
Like the jobs report, the U.S. Institute of Supply Management’s June manufacturing survey will not be signaling a boom either: economists expect the index based on the survey to rise modestly to 50.5 from 49.0 in May.
At least the survey should point in a positive direction. By contrast, the index derived from China’s official poll of purchasing managers is likely to have fallen to the neutral level of 50 demarcating expansion from contraction.
A slower, more sustainable rate of growth in China would be good news for the world in the long run, but it makes life harder in the interim for central banks trying to steer a course through strong cross-currents.
Poland and Romania are forecast to cut interest rates this week, but Australia, Sweden, Britain and the European Central Bank are likely to keep policy on hold.
With interest rates near zero, communicating expectations is an increasingly important policy tool for central banks. Mark Carney, the ex-Bank of Canada chief who takes over at the Bank of England on Monday, is a firm proponent of forward guidance.
In the same vein, ECB President Mario Draghi is expected to repeat his soothing message from last week that the bank is a long way from abandoning its ultra-loose stance because economic recovery will be gradual and fragile.
While some economists still expect the ECB to cut rates again later in the year, attention is turning to how the bank can halt a decline in bank lending so companies can benefit more from very low interest rates and pick up the pace of hiring.
Figures for May are likely to show euro zone unemployment at a record high of 12.3 percent.
“If he could do anything that would revive investment in the euro area, that would definitely help us internally and we would not need to depend so much on whether the Fed is going to end QE and what’s happening to Chinese economic growth,” said Bert Colijn, an economist in Brussels with the Conference Board, a business research group.
Colijn is worried that a sustained rise in bond yields, touched off by anticipation of Fed ‘tapering’, could halt the improvement in euro zone confidence, which has recovered to a 12-month high.
Seen in another light, though, the recent rise in euro zone periphery yields is a timely reminder to the likes of Spain and Italy that the ECB’s monetary generosity is merely buying time for them to make tough policy changes needed to revive growth.
“From the ECB’s perspective, a bit of pressure on southern Europe’s bond markets may be no bad thing if it acts as an incentive for governments to step up the pace of reform,” said Nicholas Spiro with Spiro Sovereign Strategy, a London consultancy.
The trick of striking a balance between short-term stimulus and long-term reform is why the efforts of Prime Minister Shinzo Abe to reverse two decades of stagnation and deflation in Japan – through the ‘three arrows’ of easy money, fiscal stimulus and structural reform – is attracting a lot of attention in Europe.
Andrew Milligan and Jeremy Lawson, economists at Standard Life in Edinburgh, say parts of the euro zone increasingly resemble Japan because of ageing populations and a lack of supply-side reforms. They worry in particular about Italy.
“While overall the West does not suffer from the scale of the difficulties that have plagued Japan, certain European countries, such as Italy, are much more vulnerable to going down the Japanese path than others,” they wrote in a report.
Like Italy, Japan will return to sustainable growth only if the government rams through structural reforms. In the meantime, though, the sugar rush from a more-aggressive monetary policy is bolstering business confidence, as Monday’s Bank of Japan ‘tankan’ survey is expected to show.
“With a weak currency providing continued tailwinds, the slowdown in the rest of Asia and uncertainties about Western growth have yet to dampen Japanese manufacturing optimism,” said Izumi Devalier, an economist with HSBC in Hong Kong.
Source: Reuters “The Fed and China churn already choppy waters”
China’s chief banking regulator said on Saturday that liquidity in China’s banking system is sufficient and pledged to control risks from local government debt, real estate and shadow banking.
Despite a cash squeeze that sent money-market interest rates soaring over the last two weeks, banks have more than enough reserves to meet settlement needs, Shang Fulin, chairman of the Chinese Banking Regulatory Commission (CBRC), said at a financial forum on Saturday.
“Over the last few days, due to multiple factors, the problem of tight liquidity has appeared in the market. But overall, liquidity in our banking system really isn’t scarce,” Shang said at a speech to the Lujiazui Forum in Shanghai
Shang said total excess reserves in China’s banking system totaled 1.5 trillion, which he said was more than double the amount necessary for normal payment and settlement needs.
On the issue of banks’ asset quality and, in particular, banks’ exposure to local government debt and the real estate market, Shang acknowledged risks but said they were manageable.
“Recently, some international organizations and industry insiders have expressed worry about a slowdown in China’s economic growth, local government debt, the real estate market, and related areas,” Shang said.
“Currently everyone is fully aware of the risks. As long as we take proper risk control measures, these risks are controllable,” Shang said.
On local debt, Shang pledged to closely monitor and control the growth in local borrowing and “alleviate hidden risks”.
Outstanding bank loans to local government financing vehicles totaled 9.59 trillion yuan at the end of the first quarter, Shang said.
Amid the cash squeeze earlier this month, CBRC repeated previous orders to banks to report all forms of local government debt exposure to regulators, including funds channeled through wealth management products (WMP).
The central bank, which had let short-term borrowing costs spike to record highs to drive home a message to banks that they could no longer count on cheap cash to fund riskier operations, said it would ensure policy supported a slowing economy.
On the topic of WMPs, which have exploded in recent years as households and firms have searched for higher-yielding alternatives to traditional deposits, Shang said the development was positive but also highlighted risks.
“In reality, wealth management products are investment products. Wealth management products are not the same as savings. Investors have to bear investment risk. When banks do these products, are they clearly explaining the risks to investors?” Shang said.
Analysts have said that many WMP investors believe that many products carry an implicit guarantee from state-backed banks, even if no legal guarantee exists.
Bank-issued WMPs totaled 8.2 trillion yuan ($1.34 trillion) by the end of the first quarter, of which 70 percent were invested in the real economy.
Though Shang did not elaborate, the comments implied that the remaining 30 percent was invested in interbank assets, whose explosive growth was a key factor in the recent interbank liquidity squeeze.
On the real estate market, Shang downplayed the risk to the banking system, despite a three-year campaign by the central government to restrain housing prices.
Real estate loans totaled more than 13 trillion yuan by the end of April, of which mortgages comprised about 70 percent, Shang said.
“Chinese people are creditworthy. The non-performing loan ratio on mortgages is extremely low, far below 1 percent,” Shang said.
Source: Reuters “China bank regulator says liquidity ample, debt risks manageable”
China’s state media warned on Saturday that a “counterstrike” against the Philippines was inevitable if it continues to provoke Beijing in the South China Sea, potentially Asia’s biggest military troublespot.
The warning comes as ministers from both countries attend an Association of Southeast Asian Nations meeting in Brunei, starting Saturday, which hopes to reach a legally binding code of conduct to manage maritime conduct in disputed areas.
At stake are potentially massive offshore oil reserves. The seas also lie on shipping lanes and fishing grounds.
Both China and the Philippines have been locked in a decades-old territorial squabble over the South China Sea, with tensions flaring after the Philippines moved new soldiers and supplies last week to a disputed coral reef, prompting Beijing to condemn Manila’s “illegal occupation”.
The overseas edition of the People’s Daily, the official newspaper of the Chinese Communist Party, said in a front-page commentary that the Philippines had committed “seven sins” in the South China Sea.
These include the “illegal occupation” of the Spratly Islands, inviting foreign capital to engage in oil and gas development in the disputed waters and promoting the “internationalization” of the waters, said the commentary.
The Philippines has called on the United States to act as a “patron”, while ASEAN has become an “accomplice,” said the commentary, which does not amount to official policy but can reflect the government’s thinking.
“The Philippines, knowing that it’s weak, believes that ‘a crying child will have milk to drink’,” the People’s Daily said, accusing Manila of resorting to many “unscrupulous” tricks in the disputed waters.
Beijing’s assertion of sovereignty over a vast stretch of the South China Sea has set it directly against Vietnam and the Philippines, while Brunei, Taiwan and Malaysia also lay claim to other parts of the sea.
The 10-member ASEAN hopes to reach a legally binding Code of Conduct to manage maritime conduct in disputed areas. For now a watered-down “Declaration of Conduct” is in place.
On Thursday, China’s Foreign Minister Wang Yi warned that countries with territorial claims in the South China Sea that look for help from third parties will find their efforts “futile”, adding that the path of confrontation would be “doomed”.
Last week, China vowed to protect its sovereignty over the Second Thomas Shoal, known in China as the Ren’ai reef. The Philippines is accusing China of encroachment after three Chinese ships, including a naval frigate, converged just five nautical miles (nine km) from an old transport ship that Manila ran aground on a reef in 1999 to mark its territory.
Last year, China and the Philippines were locked in a tense two-month standoff at the Scarborough Shoal, which is only about 124 nautical miles off the Philippine coast. Chinese ships now control the shoal, often chasing away Filipino fishermen.
Source: Reuters “China media warns Philippines of ‘counterstrike’ in South China Sea”
Confrontation over the South China Sea ‘doomed’, China tells claimants dated June 27
South China Sea Dispute: Who Is Bullying Who? dated June 26
South China Sea Dispute: Chinese People’s Obsession dated June 24
South China Sea Dispute: Lucky China; Unlucky the Philippines dated June 21
More than a hundred people, riding motorbikes and wielding knifes, attacked a police station in China’s ethnically divided western region of Xinjiang, state media said on Saturday, in the latest unrest to hit the region in the past week.
The attack in the remote desert city of Hotan, a heavily ethnic Uighur area, comes two days after the region’s deadliest unrest in four years that resulted in the deaths of 35 people. China called the incident a “terrorist attack”.
Xinjiang is home to the mainly Muslim Uighur people who speak a Turkic language. Many of them chafe at what they call Chinese government restrictions on their culture, language and religion. China says it grants Uighurs wide-ranging freedoms and accuses extremists of separatism.
The animosity between the majority Han Chinese and the Uighurs poses a major challenge for China’s Communist Party leaders. President Xi Jinping, who took office in March, has called for the unity of all ethnic groups in China.
In the latest incident, the Global Times – owned by Chinese Communist Party mouthpiece, the People’s Daily – said “troublemakers” gathered at religious venues before riding on motorcycles to attack a police station in the city’s Moyu county.
Authorities are counting the number of casualties and searching for suspects, the Global Times said.
In a separate incident, some 200 people attempted to “incite trouble” at a major shopping area in Hotan, the newspaper said. It said police defused the situation.
Yu Zhengsheng, a member of the Politburo Standing Committee, the party’s inner circle, pledged to step up “action to crack down upon terrorist groups and extremist organizations” at a meeting with government officials in the regional capital Urumqi, state news agency Xinhua said.
Chinese authorities have increased security in Urumqi, the Global Times said.
Photographs on Chinese microblogs showed dozens of military trucks with riot police patrolling the streets.
The increased security comes almost a week before the fourth anniversary of the July 2009 riots in Xinjiang that pitted Uighurs against ethnic Chinese, resulting in nearly 200 people being killed.
In a sign of the gravity of the situation, Xinjiang’s top party chief Zhang Chunxian said: “We should be clearly aware of the complex and acute nature of the long-term struggle against separatism,” according to the Xinjiang Daily, the official newspaper of the region.
“For those who dare to defy the law, the criminals who engage in violent terrorist activities have to be punished. We can’t tolerate them, we have to hold no punches,” the People’s Daily said in a front-page editorial.
Source: Reuters “China’s troubled Xinjiang hit by more violence: state media”
China had a long history of regarding itself as the center of the world due to its ignorance of the existence of the other parts of the world that were much larger and even stronger than it.
It paid dearly for such ignorance and arrogance in being bullied for more than a century by foreign powers.
When China defeated the United States in the Korean War due to General McArthur’s arrogance, Mao Zedong’s ego inflated. China again wanted to be the center of the world. Mao contended with the Soviet Union for leadership of the communist world and advocated world revolution to turn the whole world communist.
Mao launched the Great Leap Forward in order to surpass the United States and Soviet Union economically, but it backfired and resulted in one of the worst famines in human history.
However, Mao did not repent. Like Hitler, he still had lots of followers who were willing to fight bravely in order to rule the world.
Exploiting his popularity, he made Red Guard youngsters and rebel workers mad to carry out his Cultural Revolution in order to be world leader not economically but politically and ideologically.
As China was poor and weak, Mao’s ambition to rule the world did not bring much harm to people outside China. As a result, some people still regard Mao as an idealist. Some even believe that Mao advocated a mass line as he thought that it was vitally important to understand their views.
No, Mao wanted all Chinese people to obey his instructions and be his good pupils!
The Great Leader, Great Teacher, Great Commander and Great Helmsman did not want to understand your view. He wanted you to obey him blindly.
“Chairman Mao’s instructions must be implemented no matter you understand them or not!”
Mao was dead, but the Sinocentric cosmology revived by him remains popular among a large number of Maoists and leftists.
That is why when China becomes strong, books and articles advocating such cosmology have cropped up with a vengeance. Some of the books became best sellers.
In one best seller “China Is unhappy: The Great Era, the Grand Goal, and Our Internal Anxieties and External Challenges” (2009), Song Xiaojun, a retired PLA officer, tried to be more arrogant than Mao by calling America “an old cucumber painted green” instead of “paper tiger”.
In another best seller “China Dream: Great Power Thinking and Strategic Posture in the Post-American Era” (2010), Liu Mingfu, a senior colonel and professor at China’s National Defense University, is so mad as to reject China’s “peaceful rise” advocated by Chinese leaders Hu Jintao and Xi Jinping and advocate China’s “military rise”.
With such cosmology popular among a large number of Maoists and leftists in China, what will happen when China has become as powerful as the United States and is ruled by a tyrant like Mao with the ambition to rule the world?
Danger of the Reemergence of a Tyrant
Under the current system of the CCP Dynasty, as there are no rules or standards with respect to the qualification of the candidates for succession to the top post, the number of succession contenders can be very large. Due to the preference to plucking a person from obscurity as succession candidate to ensure his gratitude to the one who chooses him, the chance is much bigger for a clever potential tyrant well versed in intrigues to win succession.
If such a tyrant has reemerged, there is no mechanism in China to remove him. With the support of those who advocate Sinocentric cosmology, he will seek world hegemony and like Mao has no scruple to fight a nuclear war.
Like Chinese people, world people may be forced to obey the tyrant’s instruction blindly.
China Has Just Removed a Potential Tyrant
Bo Xilai is precisely such a potential tyrant. What he did in Chongqing in ignoring the rule of law, persecuting defense lawyer and all those who dared to criticize him, torturing entrepreneurs and robbing them of their wealth proved that he would have absolutely been a tyrant if he had succeeded in replacing Xi Jinping and maneuvered to become the core of the CCP leadership
He was well qualified as a Hu Jintao’s successor, but he failed to be aware of his potential before Xi Jinping had been chosen as Hu Jintao’s successor because he never expected that personal moral integrity was so important for Jiang Zemin in selecting successor.
Bo can use his father’s influence in the powerful conservative faction to become the leader of that faction and has the faction as his power base. He believed that Jiang might allow him to substitute himself for Xi Jinping if he had turned a new leaf and made impressive achievements in running Chongqing. After all, Bo’s father did Jiang tremendous favors in helping Jiang establish himself as the core of CCP leadership.
Bo Xilai is born a playboy and has been chased by lots of beautiful women. He is not greedy for wealth, but is only fond of playing with women. However, one has to have some money to please women. Secretly, he got some money. What is wrong with that? “Who does not play with women when he is an official?” he thought. “Who will know that if it is a well-kept secret?” It left no trace if he avoided giving birth to any child in doing so. Besides, the women came to chase him instead of he chasing them. If they quarreled, he only needed to stop the quarrel and make them live in harmony. He knew how to do that. He was a skilled womanizer. There was nothing to worry. His wife was greedy, but she did that for his son. He did not blame her.
Who knows that he had played away the right of succession to benefit Xi Jinping. He did not mind if anyone else got the right. Losing that to Xi Jinping who looks so naïve! He just could not accept that. He decided to cease playing and achieve something to impress the elders in order to grab the succession and seize power. “Doesn’t Xi Jinping look like Hua Guofeng? Hua Guofeng was naïve and was soon replaced by Deng Xiaoping. So will Xi Jinping by me,” he thought.
He had proved himself really talented in running Chongqing. In addition, with a little effort, he became foreign and Chinese media’s favorite due to his handsome looks, charm, charisma, eloquence, perfect Putonghua and fluent English. He took all the limelight and cast Hu Jintao, Wen Jiabao and Xi Jinping all into the shade.
He had studied hard Mao Zedong’s works and Marxism-Leninism, but had no idea that in China, one had to have good mastery of the art for being an emperor to become the top leader. In the power struggle between him with the support of the powerful conservative faction and the various reformist factions, he was a miserable loser.
Quite interesting intrigues and tricks were played in the power struggle and made it one of the most fantastic stories in Chinese history. I cannot give the story here as it is too long. There is a detailed description of it in the second edition of my book “Tiananmen’s Tremendous Achievements”.
Therefore, I said in my post “South China Sea dispute: Who is bullying who?”, “The world can only be safe when China is a democracy!”