Russia Today — May 11, 2013

The Chinese military is making preparations for the inaugural flight test of its newly designed unmanned combat vehicle, bringing the Asian powerhouse into the stealth technology race, Chinese media report.

China’s first unmanned aerial vehicle (UAV), known as the Lijian (‘sharp sword‘), is designed jointly by the Hongdu Aviation Industry Group and Shenyang Aviation Corporation. The project was launched in 2009 and the drone’s first ground test was conducted on December 13 last year.

The Lijian, which makes China the third country to possess stealth drone capabilities, is now ready for flight testing, China Aviation News reported on Friday.

The Chinese UAV is designed for use by the PLA Air Force and Navy Air Force for combat missions, China Aviation News reported. It may also be used for tracking and reconnaissance along China’s lengthy and occasionally contentious border.

Beijing’s ambitious efforts at developing its drone capabilities have not escaped the attention of Taiwan, which has quarreled with Beijing in the past over questions of sovereignty and national identity.

“Taiwan should be concerned about China’s development of large numbers of sophisticated military UAVs,” Ian Easton, a research fellow at the Project 2049 Institute, told the Taipei Times.

China’s stealth drone is third such unmanned combat vehicle in existence, after the X-47 designed by the United States, and the nEUROn, a collaborative effort of various EU companies.

The nEUROn was launched in 2005 following an order by the French Defense Procurement Agency. The program is a collaborative effort between French, Italian, Swedish, Spanish, Greek and Swiss defense companies.

The US Pentagon’s X-47 stealth drone, designed by Northrop Grumman, began as part of DARPA’s J-UCAS program, and is now part of the US Navy’s UCAS-D (Unmanned Combat Air System Demonstration) program. The X-47 is still undergoing flight testing.

The unveiling of the prototype places the People’s Republic of China ahead of several nations in the development of stealth drone technology.

India, Iran, Israel, Italy, Sweden and Russia also have their own stealth UAV programs

Source

Russia Today — April 18, 2013

In exchange for advantageous trade tariffs, Iceland may be able to give China the Arctic influence it’s been seeking, as it supports the world’s second largest economy’s bid to join the Arctic Council.

After entering a free trade agreement on Monday, the remote and recession-crippled Iceland is brokering Chinese Arctic access.

Olafur Ragnar Grimsson, President of Iceland, advocates in favor of oil companies and countries without direct territorial claims to the Arctic, and believes they should have a voice in the region’s future.

“We realize that there are other nations in Asia and Europe that have legitimate concerns and enterprises in the Arctic and it’s important to involve them in a co-operative effort,” Grimsson said.

China doesn’t border the Arctic seas, but is still seeking a permanent observer status on the Arctic Council, an eight nation body with territorial claims to the region, including Iceland. China’s application is expected to be accepted when a decision is made next month.

The Arctic Council members are the US, Canada, Denmark, Finland, Norway, Russia, Sweden, and Iceland.

Iceland provides a unique opportunity for China, as its proximity to the melting Arctic circle (1,000 km) could open up new potential trade routes, and possibly natural resource exploration -gas, oil, diamonds, gold, and iron- all resources any up-and-coming superpower should have its sights on.

If enough ice melts to create a viable shipping route, it would cut about 6,400 kilometers (4,000 miles) and two weeks off the voyage from Shanghai to northern European ports.

China has hunkered down heavy investment in the Arctic region, from Russian oil ventures with Rosneft to iron-ore extraction projects in Greenland. China has flirted with the idea of sinking $2.3 billion dollars into Greenland to trade 15 million tons of iron ore per year.

”It’s attractive also for all the resources but China is already a major shipping nation … and Chinese companies are now very eagerly awaiting policy signals from the Chinese government on what kind of priorities they will give to the Arctic,” said Leiv Lunde, director of the Oslo-based Fridtjof Nansen Institute, who was in Shanghai Monday attending an Arctic issues conference.

China recently completed its largest embassy in Reykjavik, which can reportedly house 500 people, and demonstrates China’s serious interest in the area.

The 30,000 km free trade agreement

30,000 kilometers (19,000 miles) of tumultuous waters, ice caps, and snowy landmasses stand between Iceland and Shanghai, but this didn’t deter Icelandic Prime Minister Johanna Sigurdardottir and Chinese President Xi in their trade negotiations.

“China is willing to increase exchanges and mutual understanding with Iceland and boost bilateral cooperation in sectors such as clean and renewable energy and fisheries,” Chinese President Xi said.

The free trade pact will lower tariffs and will boost seafood exports from Iceland to China.

“It also signals the deepening of our relationship, especially our economic relationship which has been lifted to a new height,” Xi said during talks following a formal welcome ceremony at the Great Hall of the People in Beijing.

“The Free Trade Agreement (FTA) and the joint declaration inked yesterday between the two nations bear great significance in pushing forward bilateral relations,” said Xi.

Trade between the two countries rose 21.1% last year to $180 million, according to the Chinese Ministry of Foreign Trade.

Cozying up to China

The move towards China, and not the EU is a political move of independence away from the EU.

Iceland began its EU membership application in early 2010 but in 2012, due to overwhelming opposition and election season, the Icelandic Parliamentary committee suspended ascension talks with the EU. Almost two thirds of Icelanders oppose membership and less than 25% support entrance, according to the most recent islander poll. However, ministers keep hinting at the need to join up with their neighboring economic heavyweight.

The Icelandic economy is still in recovery after the banking bubble burst in 2008. Banks declared bankruptcy instead of getting a bailout, and started from scratch, a unique path to financial stability, that seems to be working for Iceland, as growth slowly recuperates.

When the 2008 economic crisis hit, Iceland shocked economic pundits and let its three largest banks fail, and defaulted on $85 billion. The stock market dipped 90%, unemployment jumped to 10%, and most the inflation rate topped at 18%. Now that the market has stabilized, they are looking far and wide to expand their export industry.

Source

Bloomberg — April 15, 2013

A surge in bird flu cases in China increases the pandemic potential of the H7N9 strain, according to a Beijing-based supplier of influenza vaccines to the Chinese government.

Sinovac Biotech Ltd. (SVA), the first company to win regulatory approval for a swine flu shot in 2009, is preparing to make immunizations against the new virus that’s infected dozens of people in China and killed 13. The Nasdaq-traded company will hold off producing the shots until it’s received an order from the state, said Chief Executive Officer Yin Weidong.

Flu labs around the world are developing vaccine seed strains to serve as a template for bulk immunization production, should it be required. While there is no evidence that H7N9 is spreading easily among people, it hasn’t been detected in humans before, so they have no natural immunity. That raises global public health concerns, researchers at the Centers for Disease Control and Prevention in Atlanta said last week.

“The risk of this becoming a pandemic is increasing,” Yin said in an interview at the company’s headquarters in the Chinese capital, where a second H7N9 infection was reported today.

Over the past two months, 61 H7N9 cases and 13 deaths have been reported by health authorities, mostly in China’s eastern provinces. About half the infections occurred this month, suggesting the pace of transmission is increasing.

The H5N1 bird flu strain, which killed at least 371 people in Asia and Africa over the past decade, hasn’t acquired the ability to spread easily among people. In 2009, a novel swine flu virus, known as H1N1, touched off the first influenza pandemic in 41 years, showing how diseases of livestock can spill over into human populations, causing a contagion.

Bigger Threat

“This is a much more serious outbreak than H5N1, which from 2003 until now only infected 43 people in China,” Yin said.

Sinovac has notified its suppliers that it may need to order additional fertilized chicken eggs to produce H7N9 vaccine, Yin said. The company doesn’t usually require the eggs in the second half of the year, when the bulk of Sinovac’s seasonal-flu vaccine has been produced, he said.

Under an agreement with China’s Food and Drug Administration, a Sinovac vaccine for pandemic flu doesn’t need to undergo clinical testing because its production methods have already been approved and the pandemic flu vaccine would represent only a change in the viral strain, he said.

Ready in July

Based on typical vaccine development and production schedules, a batch could be ready for commercial use by late July, Yin said, adding that he is urging the World Health Organization and its affiliated labs to expedite the preparation of seed strains.

Sinovac has the capacity to produce about 30 million to 40 million doses of flu vaccine annually, said Yin, who founded the company in 2001 to make immunizations for hepatitis. The price to the Chinese government is about 20 yuan ($3.23) a piece, he added.

The company’s egg-based manufacturing process can supply vaccines with or without an aluminum-based chemical additive, called an adjuvant, which heightens the immune response. It is also able to make vaccines based on either whole or split viruses, Yin said.

Source

Chinese colonel says latest bird flu virus is U.S. biological weapon

The American Flu

Bill Gertz — Washington Free Beacon April 9, 2013

A Chinese Air Force officer on Saturday accused the U.S. government of creating the new strain of bird flu now afflicting parts of China as a biological warfare attack.

People’s Liberation Army Sr. Col. Dai Xu said the United States released the H7N9 bird flu virus into China in an act of biological warfare, according to a posting on his blog on Saturday.

The charge was first reported in the state-run Guangzhou newspaper Southern Metropolis Daily and then picked up by several news outlets in Asia.

State Department spokesman Jason Rebholz dismissed the claim. “There is absolutely no truth to these allegations,” he told the Washington Free Beacon.

Seven deaths from the bird flu outbreak were reported as of Tuesday in state-run Chinese media. As many as 24 people reportedly were infected by the disease in Shanghai, Jiangsu, Zhejiang, and Anhui.

Chinese authorities are trying to calm public fears of a major epidemic, claiming there is no evidence the virus can be transmitted between humans.

The government also is claiming that the outbreak is not related to the recent discovery of thousands of dead pigs floating in a river in China.

The accusation of U.S. biological warfare against China comes as the Pentagon is seeking closer military relations with China. Army Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, is set to travel to China for talks with Chinese military leaders later this month.

Dai is a military strategist who in the past has been outspoken in seeking to foment conflict between China and the United States. He told the Global Times in August that China should go to war over U.S. support for Japan’s claims to the disputed Senkaku Islands.

Writing on Sina Weibo, a Chinese microblogging site akin to Twitter, Dai stated that the new bird flu strain was designed as a biological weapon similar to severe acute respiratory syndrome (SARS), which he also claimed was developed as a U.S. bio-weapon, that affected the country in 2003.

According to Dai’s posting, the new flu outbreak should not be a cause for concern. “The national leadership should not pay too much attention to it,” the PLA lecturer at the National Defense University wrote. “Or else, it’ll be like in 2003 with SARS!”

“At that time, America was fighting in Iraq and feared that China would take advantage of the opportunity to take other actions,” he said. “This is why they used bio-psychological weapons against China. All of China fell into turmoil and that was exactly what the United States wanted. Now, the United States is using the same old trick. China should have learned its lesson and should calmly deal with the problem.”

Dai said that even if “a few may die” from the flu outbreak, it will not equal one-thousandth of the deaths caused by vehicle accidents in China.

Dai in the past has called for China to punish the United States for U.S. arms sales to rival Taiwan, by selling arms to U.S. enemies. “China recognizes that a few perfunctory protests will not have any effect,” Dai said in 2010. “China can’t directly sanction American arms companies since they did not do business with China … but China can sanction companies that are doing business with China directly, like Boeing or General Electric.”

Dai also has said the United States has used crises with North Korea and offers of cooperation on the issue as a plot to drive a wedge between Beijing and its fraternal communist ally.

Dai also has said U.S. efforts to counter Chinese espionage and intelligence-gathering were part of a U.S. “plot theory” of “western countries threatening others by [releasing] information gained through spying in order to damage the reputations of other countries.”

A State Department official said China notified the World Health Organization (WHO) on March 31 about its first detected human cases of H7N9 infection. Fourteen cases were confirmed by the WHO by April 5, of which six were fatal. The organization said there is no evidence of human-to-human transmission.

“U.S. Embassy Beijing and U.S. Consulate Shanghai are monitoring the situation, working closely with counterparts at the U.S. Centers for Disease Control, and the Beijing and Shanghai municipal governments,” the official said.

The colonel’s accusation provoked a widespread response on Chinese websites. One post in reaction joked that Dai’s comment about auto deaths must mean that the United States and Germany are responsible for a conspiracy to produce cars, according to a report in Hong Kong’s South China Morning Post.

Luo Changping, deputy editor of Caijing, said most PLA soldiers would not support Dai’s comments and he urged the colonel to resign and apologize to those who have died from the current bird flu outbreak.

A defiant Dai then said in a new posting Sunday that “it is common knowledge that a group of people in China have been injected with mental toxin by the United States.”

“Now, a group of fake American devils are attacking me,” he wrote in another post. “I will not retreat even half a step.”

Analysts say the colonel’s remarks are a reflection of the growing xenophobic atmosphere within the Chinese military that views the United States as its main enemy.

Former State Department intelligence analyst John Tkacik said China’s military was largely to blame for mishandling the 2003 outbreak of SARS. Tkacik said there was speculation when the epidemic began that “the PLA suspects SARS had emanated from its own biological laboratories and was all the more eager to keep it secret.” China is known to have a covert biological arms program.

“Col. Dai Xu is a shameless liar when he accuses the United States of using bio weapons,” Tkacik told the Free Beacon. “He’s probably motivated by a desire to exculpate the PLA for their mishandling of the epidemic—no doubt most Chinese have happily forgotten the episode—as much as by a cynical xenophobia. But, that’s what passes for deep strategic thought at China’s National Defense University these days.”

The Pentagon has been trying with varying success to develop closer ties to the Chinese military as part of a strategy aimed at building trust. However, China’s military leaders believe the U.S. offers of closer ties are a ruse designed to contain China’s growing military buildup.

Defense Secretary Chuck Hagel spoke by phone with China’s Defense Minister Gen. Chang Wanquan on April 2. Chang is the No. 4 defense official after Chinese President Xi Jinping and two other generals who run the Central Military Commission, the Communist Party’s ultimate power organ.

“The leaders both expressed their intention to work together to continue to build a military-to-military relationship that serves the vision of both President Obama and President Xi,” Pentagon press secretary George Little said in a statement after the call.

“The secretary discussed the importance of focusing on areas of sustained dialogue, practical areas of cooperation, and risk reducing measures,” he said.

U.S. ties with China are strained due to China’s reluctance to rein in neighboring North Korea.

China provides North Korea with large amounts of fuel oil and other goods. However, Beijing has not taken steps to pressure Pyongyang using its economic leverage during the ongoing crisis.

The flu has lit up China’s thriving Internet, according to analysts. Over 945,600 microblog postings addressed the flu between April 8 and 9. Since the outbreak began some seven days ago, between 1.3 million and 3 million postings were put online on outlets including Sina Weibo and QQ Weibo.

Tens of thousands of users expressed doubts about the official Shanghai municipal government’s denial of any link between the dead pigs found floating last month in the region’s Huangpu River.

The proximity to the initial outbreak in Shanghai and the river has led to speculation that the pig deaths may have been linked to the flu virus jumping from animals to humans.

That speculation was fueled by reports that one of the victims of the flu was a pig butcher.

The avian flu strain is similar to an earlier outbreak with a significant difference: The current strain does not kill the birds it infects, making it more difficult to identify infected poultry.

The Shanghai government waited 20 days before announcing the first H7N9 infection on March 31.

Source

China’s PLA “sunk” a U.S. aircraft carrier during a war game in remote China using its DF-21D “Carrier Killer” missile, reports Taiwan paper Want China Times.

The China Times is a 63 year old Taiwanese paper slightly slanted toward unification, but with a solid reputation and accurate reporting.

The Times report originates with a Google Earth image published at SAORBOATS Argentinian internet forum.

The photo shows two big craters on a 600 foot platform deep in China’s Gobi desert that Chinese military testers used to simulate the flight deck of an aircraft carrier.

There has been talk of the DF-21 for years with estimates of its range, threat, and theater changing implications, but this could be the first known test of the rocket.

The Dong-Feng-21D ballistic missile is expected to ring China’s coast on its truck-mounted launcher, posing a significant threat to U.S. Naval forces in the region.

The 21D is particularly deadly in that it streaks to the atmosphere guided by satellites and possibly GPS enabled drones, and then drops faster than sound straight down on its target.

Lacking a horizontal flight path could make it much more difficult to defend against and with the Navy’s new carrier’s running at $13 billion plus per ship, losing one would be as great a financial blow as it would be psychological and tactical.

But Defense analyst Roger Cliff points out to The Diplomat that the DF-21 faces a greater challenge than what it faced in the Gobi.

“The thing to keep in mind is that, in order for China to successfully attack a U.S. navy ship with a ballistic missile,” Cliff told The Diplomat,  “it must first detect the ship, identify it as a U.S. warship of a type that it wishes to attack … [then] over-the-horizon radars used to detect ships can be jammed, spoofed, or destroyed; smoke and other obscurants can be deployed … and when the missile locks on to the target its seeker can be jammed or spoofed.”

Which is good news for U.S. troops as they’re now facing a greater number of deployments to the region than at any time since WWII.

Source

A barrage of malicious cyber-attacks against computer networks in the United States and other countries over several years has been sourced by a private US security firm to a single building on the fringes of Shanghai, which, it says, is occupied by the Chinese military.

A 60-page report released by Mandiant, a Virginia-based firm that specialises in cyber-espionage, concludes that hundreds or perhaps thousands of English-speaking Chinese computer experts toil daily inside the anonymous-looking 12-storey building in the Pudong district of Shanghai. ‘Unit 61398’, as it is known, hacks into foreign networks on behalf of the People’s Liberation Army (PLA), Mandiant alleges.

“The nature of Unit 61398’s work is considered by China to be a state secret; however, we believe it engages in harmful computer network operations,” the security firm said in the report, which drew instant rebukes from the Chinese government. “It is time to acknowledge the threat that is originating in China, and we wanted to do our part to arm and prepare security professionals to combat that threat effectively.”

The company asserted that the unit, one of several in China believed to be involved in invading overseas computer systems, had “stolen hundreds of terabytes of data from at least 141 organisations across a diverse set of industries beginning as early as 2006”.  While most of the activity targeted corporations in the United States are smaller number is located in Canada and Britain, it said.

Cyber-espionage is becoming an increasingly urgent worry in Washington.  The concern is not just that China, as well any number of other countries, is successfully stealing corporate information – for example merger plans, design blueprints, pricing documents or negotiating strategies – but that it is developing the capacity to sabotage physical infrastructure networks in the US like gas pipelines or power grids.

“In the cold war, we were focused every day on the nuclear command centres around Moscow,” one senior defence official was cited as saying by the New York Times, which first revealed the contents of the Mandiant report. “Today, it’s fair to say that we worry as much about the computer servers in Shanghai.”

President Barack Obama included a call to arms to confront the cyber-threat in his State of the Union address last week.  “We know foreign countries and companies swipe our corporate secrets,” he said. “Now our enemies are also seeking the ability to sabotage our power grid, our financial institutions, our air-traffic control systems. We cannot look back years from now and wonder why we did nothing.”

Beijing continues to deny sanctioning such activity. “Hacking attacks are transnational and anonymous,” foreign ministry spokesman Hong Lei said.  “Determining their origins are extremely difficult. We don’t know how the evidence in this so-called report can be tenable.” When BBC journalists approached the building they were briefly detained and forced to relinquish their footage.

Unit 61398 has been known both to private cyber-security firms as well as US intelligence for a while and is sometimes referred as the ‘Comment Crew’ because it has been known to infiltrate online forums and leave comments.  The Mandiant report does not name any victims but says that the 141 companies already infiltrated span 20 major industries.

American companies known to have been targeted by Comment Crew, however, include Coca Cola at a time when it was considering a take-over of a Chinese juice company and RSA, a technology company that creates computer codes to protect confidential corporate and government databases. Alarm bells sounded last September when a unit of Telvent which supplies equipment enabling utility companies remotely to operate valves and switches on gas and oil networks had been invaded by unidentified cyber-intruders.

Responding to the report, White House spokeswoman Caitlin Hayden reiterated only that the United States “has substantial and growing concerns about the threats to U.S. economic and national security posed by cyber intrusions, including the theft of commercial information.” 

The Mandiant report acknowledges that while it has traced assorted cyber-intrusions to servers precisely in the rather run-down district of Pudong where the building occupied by Unit 61398 stands, it cannot be certain they are actually within its walls.  But to suppose they are not is barely plausible, the firm says.

Source

China’s State Copuncil approved plans to take part in the building of a high-speed railway line in Iran, two people familiar with the matter said.

The project will cost at least $1 billion and the companies participating haven’t yet been set, said the two people, who asked not to be identified because they weren’t authorized to speak publicly about the matter.

China’s decision comes as the U.S., the European Union and their allies have tightened sanctions on Iran for a nuclear program they argue is meant to develop atomic bombs. Iran maintains its program is peaceful.

China and Iran have maintained “normal business cooperation,” Foreign Ministry spokesman Hong Lei told a briefing in Beijing today. China is the biggest buyer of Iranian crude oil.

Current sanctions are costing Iran about $98.9 million a day in lost oil sales, data compiled by Bloomberg show. Iran is to resume stalled multilateral discussions on its nuclear program with the U.S., U.K. France, Germany, Russia and China on Feb. 26 in Kazakhstan. The last round of negotiations between Iran and the group, known as P5+1, failed to yield results.

The U.S. imposed new sanctions earlier this month that would keep importers from paying for oil with dollars and euros.

Source

To many it is unclear whether China is incorporated in the New World Order or a real competitor to Anglo-American Imperialism. 

There is little doubt that the Money Power co-opted the leadership of the Land of the Dragon a long time ago.

History shows that the Money Power has several tools to motivate peoples in the right direction. Their fingerprints are all over China.

In his excellent analysis of the power brokers in China, St. John Bartholomew reminds us that Marxism is a Money Power operation and that Mao did their bidding. Mao was apparently educated at Yale’s department in China. Yale’s Skull and Bones were very active in Asia and Mao was probably a member. Most American diplomats sent to him were so too.

According to Bartholomew, the triads, China’s mafia-style secret societies, were built up by Masons to combat the Qing dynasty that ruled China until the 19th century and resisted the Opium the British needed to sell to China because they had nothing else to exchange for its vast riches.

The membership list of the Trilateral Commission, the Rockefeller confab similar to the Atlantic Bilderbergers, is littered with Chinese names.

MONEY SUPPLY

Continues …

China is wiping the floor with the United States on the global economic stage, and most Americans are so clueless that they have absolutely no idea what is happening.  The number one global economic superpower is in an advanced state of decline, and the number two global economic superpower is becoming stronger with each passing day.  Unless something truly dramatic happens, it is only a matter of time before China overtakes America and become the dominant economic force on the planet.  In fact, China is already exercising economic superiority over the United States in a whole host of ways.  China produces more goods than we do, China does more total trade in goods with the rest of the world than we do, China produces more cars than we do, China produces more gold than we do, China consumes more energy than we do, China produces more coal than we do and China produces more steel than we do.  Every single year, we buy far more from them than they buy from us, and this has made them exceedingly wealthy.  Our politicians regularly make trips over to China to beg them to lend us back some of the money that they have taken from us.  Today, we owe China more than a trillion dollars and the Chinese are sitting on the biggest pile of foreign currency reserves that the world has ever seen.  All of this wealth has fundamentally transformed the nation of China over the past couple of decades.  Just check out the startling photographs of China from space in this article that show how China dramatically changed between 1992 and 2010.  As China continues to become stronger and as America continues to become weaker, will our children some day wake up in a world where the Chinese are telling them what to do?

China became the number one exporter of goods back in 2009, but now China has reached another milestone on the road to global economic dominance.

When you total up all exports of goods and all imports of goods, China now conducts more total trade in goods with the rest of the globe than the United States does.

China’s emerging role as the dominant player in global trade is shaking things up all over the planet.  The following is a brief excerpt from a recent Bloomberg article…

China’s growing influence in global commerce threatens to disrupt regional trading blocs as it becomes the most important commercial partner for some countries. Germany may export twice as much to China by the end of the decade as it does to France, estimated Goldman Sachs Group Inc.’s Jim O’Neill.

“For so many countries around the world, China is becoming rapidly the most important bilateral trade partner,” O’Neill, chairman of Goldman Sachs’s asset management division and the economist who bound Brazil to Russia, India and China to form the BRIC investing strategy, said in a telephone interview. “At this kind of pace by the end of the decade many European countries will be doing more individual trade with China than with bilateral partners in Europe.”

If current trends continue, what will the world look like in 10 years?

Will the Chinese dominate the entire global economy?

What would that mean for America?

Sadly, Chinese dominance is already having very serious negative consequences in this country.

The following are 40 ways that China is beating America…

#1 As I mentioned above, when you total up all imports and exports of goods, China is now the number one trading nation on the entire planet.

#2 During 2012, we sold about 110 billion dollars worth of stuff to the Chinese, but they sold about 425 billion dollars worth of stuff to us.  That was the largest trade deficit that one nation has had with another nation in the history of the world.

#3 Overall, the U.S. has run a trade deficit with China over the past decade that comes to more than 2.3 trillion dollars.

#4 China now has the largest new car market in the entire world.

#5 China has more foreign currency reserves than anyone else on the planet.

#6 China is the number one gold producer in the world.

#7 China is also the number one gold importer in the world.

#8 The uniforms for the U.S. Olympic team were made in China.

#9 85 percent of all artificial Christmas trees are made in China.

#10 The new World Trade Center tower is going to include glass that has been imported from China.

#11 The new Martin Luther King memorial on the National Mall was made in China.

#12 One of the reasons it is so hard to export stuff to China is because of their tariffs.  According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.

#13 The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.

#14 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#15 The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.

#16 Overall, the United States has lost a total of more than 56,000 manufacturing facilities since 2001.

#17 According to the Economic Policy Institute, America is losing half a million jobs to China every single year.

#18 China now produces more than twice as many automobiles as the United States does.

#19 Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.

#20 After being bailed out by U.S. taxpayers, General Motors is currently involved in 11 joint ventures with companies owned by the Chinese government.  The price for entering into many of these “joint ventures” was a transfer of “state of the art technology” from General Motors to the communist Chinese.

#21 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.

#22 The United States has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.

#23 China’s number one export to the U.S. is computer equipment, but the number one U.S. export to China is “scrap and trash”.

#24 The U.S. trade deficit with China is now more than 30 times larger than it was back in 1990.

#25 China now consumes more energy than the United States does.

#26 China is now the leading manufacturer of goods in the entire world.

#27 China uses more cement than the rest of the world combined.

#28 China is now the number one producer of wind and solar power on the entire globe.

#29 There are more pigs in China than in the next 43 pork producing nations combined.

#30 Today, China produces nearly twice as much beer as the United States does.

#31 Right now, China is producing more than three times as much coal as the United States does.

#33 China now produces 11 times as much steel as the United States does.

#34 China produces more than 90 percent of the global supply of rare earth elements.

#35 China is now the number one supplier of components that are critical to the operation of U.S. defense systems.

#36 A recent investigation by the U.S. Senate Committee on Armed Services found more than one million counterfeit Chinese parts in the Department of Defense supply chain.

#37 15 years ago, China was 14th in the world in published scientific research articles.  But now, China is expected to pass the United States and become number one very shortly.

#38 China now awards more doctoral degrees in engineering each year than the United States does.

#39 The average household debt load in the United States is 136% of average household income.  In China, the average household debt load is 17% of average household income.

#40 The Chinese have begun to buy up huge amounts of U.S. real estate.  In fact, Chinese citizens purchased one out of every ten homes that were sold in the state of California in 2011.

Are you starting to get the picture?

And in the years ahead China is projected to become even more powerful economically.

In fact, the IMF is projecting that China will surpass the United States and become the largest economy on the planet in 2016.

That is just three years from now.

Nobel economist Robert W. Fogel of the University of Chicago is projecting that if current trends continue, the Chinese economy will be three times larger than the U.S. economy by the year 2040.

Could you imagine a world where China has vastly more economic power than the U.S. does and dictates the direction of the global economy?

That is where we are heading.

The dragon is rising and the torch is being passed.

Source

Pakistan’s cabinet formally agreed to hand over the operation of its strategically located Gwadar port to China on Wednesday. This puts in place China’s famed “string of pearls” strategy which may have significant implications for India.

On Wednesday, the Pakistan cabinet, in one of its last decisions, transferred the operations responsibility of the Gwadar port from Singapore’s PSA (Port of Singapore Authority) International to China’s Overseas Port Holdings. This had been agreed some time ago as PSA International and Pakistani navy fell out over land transfers, security issues and lack of infrastructure. PSA had asked to withdraw from the contract and Pakistan had agreed.

In 2011, the Pakistani defence minister had announced in Beijing that Islamabad would transfer ownership to a Chinese company. China had demurred then, but despite the worsening security situation in Balochistan, the Chinese have apparently agreed to take it over.

China has already encountered opposition from Baloch people, who have objected to the Chinese taking over their traditional lands. And as the transition in Afghanistan draws near, that region, specially Quetta, which apparently houses top Taliban leaders, is likely to see more violence.

Gwadar was built by China but during its operation by PSA, it barely attracted any commercial traffic. There is also a lot of port development that remains to be built. Pakistan expects China to complete that construction in record time, given its past performance.

More than that, Pakistan expects China to turn Gwadar into a naval base. However, China has its work cut out. A container terminal, rail and road links from the port across Balochistan would need to be built, before China can take advantage of the port itself.

For China, Gwadar could also be a conduit for energy flows into northwestern China, by transporting oil and gas from the port through pipelines that traverse Balochistan and the federal agencies to feed into China’s Xinjiang province. As China’s oil imports increase, it would prefer to insulate its energy flows from the turbulent waters of the Straits of Malacca and the South China Sea.

Indian ships among others patrol the former as an anti-piracy measure. In the latter, China is involved in a territorial dispute with Vietnam and Philippines among others. In a conflict, it would be easy to shut off China’s energy supplies. But not if they can be routed through Gwadar where Pakistan Navy can also add to the security.

According to recent figures, over 60% of China’s imported oil travels through the Straits of Hormuz. Having Gwadar under its command would change the security dynamics for China.

As China moves into the Indian Ocean, Gwadar port would be ideal as a staging ground for Chinese ships. China already has a steady presence in Sri Lanka’s Hambantota port, it is wooing Maldives, though no port presence is planned yet. China is also building a port in Chittagong, Bangladesh, as well as Sonadiya, near Cox’s Bazar.

From the security point of view, India could find itself considerably constrained. It’s not for nothing that India has ramped up its relations with Oman, though there is no security presence there yet. India has been pushing to develop the Iranian port of Chahbahar, but that remains a long-term project.

Source  

Courtesy Peter Myers

What in the world is China up to?  Over the past several years, the Chinese government and large Chinese corporations (which are often at least partially owned by the government) have been systematically buying up businesses, homes, farmland, real estate, infrastructure and natural resources all over America.  In some cases, China appears to be attempting to purchase entire communities in one fell swoop.  So why is this happening?  Is this some form of “economic colonization” that is taking place?  Some have speculated that China may be intending to establish “special economic zones” inside the United States modeled after the very successful Chinese city of Shenzhen.  Back in the 1970s, Shenzhen was just a very small fishing village, but now it is a sprawling metropolis of over 14 million people.  Initially, these “special economic zones” were only established within China, but now the Chinese government has been buying huge tracts of land in foreign countries such as Nigeria and establishing special economic zones in those nations.  So could such a thing actually happen in America?  Well, according to Dr. Jerome Corsi, a plan being pushed by the Chinese Central Bank would set up “development zones” in the United States that would allow China to “establish Chinese-owned businesses and bring in its citizens to the U.S. to work.”  Under the plan, some of the $1.17 trillion that the U.S. owes China would be converted from debt to “equity”.  As a result, “China would own U.S. businesses, U.S. infrastructure and U.S. high-value land, all with a U.S. government guarantee against loss.”  Does all of this sound far-fetched?  Well, it isn’t.  In fact, the economic colonization of America is already far more advanced than most Americans would dare to imagine.

So how in the world did we get to this point?  A few decades ago, the United States was the unchallenged economic powerhouse of the world and China was essentially a third world country.

So what happened?

Well, we entered into a whole bunch of extremely unfavorable “free trade” agreements, and countries such as China began to aggressively use “free trade” as an economic weapon against us.

Over the past decade, we have lost tens of thousands of businesses and millions of jobs to China.  When the final numbers for 2012 come out, our trade deficit with China for the year will be well over 300 billion dollars, and that will be the largest trade deficit that one country has had with another country in the history of the world.

Overall, the U.S. has run a trade deficit with China over the past decade that comes to more than 2.3 trillion dollars.  That 2.3 trillion dollars could have gone to U.S. businesses and U.S. workers, and in turn taxes would have been paid on all of that money.  But instead, all of that money went to China.

Rather than just sitting on all of that money, China has been lending much of it back to us – at interest.  We now owe China more than a trillion dollars, and our politicians are constantly pleading with China to lend more money to us so that we can finance our exploding debt.

Today, the U.S. government pays China approximately 100 million dollars a day in interest on the debt that we owe them.  Those that say that the U.S. debt “does not matter” are being incredibly foolish.

So thanks to our massive trade deficit and our exploding national debt, China is systematically getting wealthier and the United States is systematically getting poorer.

And now China is starting to use a lot of that wealth to aggressively expand their power and influence around the globe.

But isn’t it more than a bit far-fetched to suggest that China may be planning to establish Chinese cities and special economic zones in America?

Not really.

Just look at what has already happened up in Canada.  It is well-known that the Chinese population of Vancouver, Canada has absolutely exploded in recent years.  In fact, the Vancouver suburb of Richmond is now approximately half Chinese.  The following is an excerpt from a BBC article…

Richmond is North America’s most Asian city – 50% of residents here identify themselves as Chinese. But it’s not just here that the Chinese community in British Columbia (BC) – some 407,000 strong – has left its mark. All across Vancouver, Chinese-Canadians have helped shape the local landscape.

A similar thing is happening in many communities along the west coast of the United States.  In fact, Chinese citizens purchased one out of every ten homes that were sold in the state of California in 2011.

But in other areas of the United States, the Chinese are approaching things much more systematically.

For example, as I have written about previously, a Chinese group identified as “Sino-Michigan Properties LLC” has purchased 200 acres of land near the town of Milan, Michigan.  Their stated goal is to build a “China City” that has artificial lakes, a Chinese cultural center and hundreds of housing units for Chinese citizens.

In other instances, large chunks of real estate in major U.S. cities that are down on their luck are being snapped up by Chinese investors.  Just check out what a Fortune article from a while back says has been happening over in Toledo, Ohio…

In March 2011, Chinese investors paid $2.15 million cash for a restaurant complex on the Maumee River in Toledo, Ohio. Soon they put down another $3.8 million on 69 acres of newly decontaminated land in the city’s Marina District, promising to invest $200 million in a new residential-commercial development. That September, another Chinese firm spent $3 million for an aging hotel across a nearby bridge with a view of the minor league ballpark.

Toledo is being promoted to Chinese investors as a “5-star logistics region“.  From Toledo it is very easy to get to Chicago, Detroit, Cleveland, Pittsburgh, Columbus and Indianapolis…

With a population of 287,000, Toledo is only the fourth largest city in Ohio, but it lies at the junction of two important highways — I-75 and I-80/90. “My vision is to make Toledo a true international city,” Toledo’s Mayor Mike Bell told the Toledo Blade.

 But some of these deals appear to be about far more than just making “investments”.  According to the Idaho Statesman, a Chinese company known as Sinomach (which is actually controlled by the Chinese government) was actually interested in developing a 50 square mile self-sustaining “technology zone” south of the Boise airport…

A Chinese national company is interested in developing a 10,000- to 30,000-acre technology zone for industry, retail centers and homes south of the Boise Airport.

Officials of the China National Machinery Industry Corp. have broached the idea — based on a concept popular in China today — to city and state leaders.

The article suggested that this “technology zone” would be modeled after similar projects that already exist in China, and that Chinese officials were conducting similar negotiations with other U.S. states as well…

Sinomach is not looking only at Idaho.

The company sent delegations to Ohio, Michigan and Pennsylvania this year to talk about setting up research and development bases and industrial parks. It has an interest in electric transmission projects and alternative energy as well.

The technology zone proposal follows a model of science, technology and industrial parks in China — often fully contained cities with all services included.

Thankfully the deal in Idaho appears to be stalled for now, but could we soon see China establish special economic zones in other communities all around America?

The Chinese certainly do seem to be laying the groundwork for something.  They have been voraciously gobbling up important infrastructure all over the country.  The following comes from a recent American Free Press article…

In addition to already owning vital ports in Long Beach, Calif. and Boston, Mass., the China Ocean Shipping Company is eyeing major ports on the East Coast and Gulf of Mexico. China also owns access to ports at the entry and exit points of the Panama Canal.

And due to fiscal woes plaguing many American cities and states, U.S. legislators have been actively seeking out Chinese investors. In one of the worst cases, Baton Rouge, La., Mayor Kip Holden offered the Chinese government ownership and operating rights to a new toll way system if the Chinese would provide the funding to build it.

Does it make sense for the Chinese to own some of our most important ports?

Isn’t there a national security risk?

Sadly, there isn’t much of anything that our politicians won’t sell these days as long as someone is willing to flash a lot of cash.

The Chinese have also been busy buying up important real estate on the east coast as a recent Forbes article explained….

According to a recent report in the New York Times, investors from China are “snapping up luxury apartments” and are planning to spend hundreds of millions of dollars on commercial and residential projects like Atlantic Yards in Brooklyn. Chinese companies also have signed major leases at the Empire State Building and at 1 World Trade Center, the report said.

But it is not only just land and infrastructure that the Chinese have been buying up.

They have also been purchasing rights to vital oil and natural gas deposits all over the United States.

There have been two Chinese companies that have been primarily involved in this effort.

The first is the China National Offshore Oil Corporation (CNOOC).  According to Wikipedia, CNOOC is 100 percent owned by the Chinese government…

CNOOC Group is a state-owned oil company, fully owned by the Government of the People’s Republic of China, and the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) performs the rights and obligations of shareholder on behalf of the government.

The second is Sinopec Corporation.  Sinopec Group is the largest shareholder (approx. 75% ownership) in Sinopec Corporation.  And as the Sinopec website tells us, Sinopec Group is fully owned by the Chinese government…

Sinopec Group, the largest shareholder of Sinopec Corp., is a super-large petroleum and petrochemical group incorporated by the State in 1998 based on the former China Petrochemical Corporation. Funded by the State, it is a State authorized investment arm and State-owned controlling company.

So whenever you see CNOOC or Sinopec, you can replace those names with the Chinese government.  The Chinese government essentially runs both of those companies.

And as you can see from the following list compiled by the Wall Street Journal, those two companies have been extremely aggressive in buying up rights to oil and natural gas all over the nation…

Colorado: Cnooc gained a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming in a $1.27 billion pact with Chesapeake Energy Corp.

Louisiana: Sinopec has a one-third interest in 265,000 acres in the Tuscaloosa Marine Shale after a broader $2.5-billion deal with Devon Energy.

Michigan: Sinopec gained a one-third interest in 350,000 acres in a larger $2.5 billion deal with Devon Energy.

Ohio: Sinopec acquired a one-third stake in Devon Energy’s 235,000 Utica Shale acres in a larger $2.5 billion deal.

Oklahoma: Sinopec has a one-third interest in 215,000 acres in a broader $2.5 billion deal with Devon Energy.

Texas: Cnooc acquired a one-third interest in Chesapeake Energy’s 600,000 acres in the Eagle Ford Shale in a $2.16-billion deal.

Wyoming: Cnooc has a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming after a $1.27 billion pact with Chesapeake Energy. Sinopec gained a one-third interest in Devon Energy’s 320,000 acres as part of a larger $2.5 billion deal.

Gulf of Mexico: Cnooc Ltd. separately acquired minority stakes in some of Statoil ASA’s leases as well as six of Nexen Inc.’s deep-water wells.

So why is the U.S. government allowing this?

That is a very good question.

For a nation that purports to be pursuing “energy independence”, we sure do have a funny way of going about things.

Unfortunately, the sad truth is that China is absolutely mopping the floor with the United States on the global economic stage.  China is rising and America is in an advanced state of decline.  Global economic power has shifted dramatically and most Americans still don’t understand what has happened.

The following are 44 more signs of how dominant the economy of China has become…

1. A Chinese firm recently made a $2.6 billion offer to buy movie theater chain AMC.

2. A different Chinese firm made a $1.8 billion offer to buy aircraft maker Hawker Beechcraft.

3. In December it was announced that a Chinese group would be purchasing AIG’s plane leasing unit for $4.23 billion.

4. It was recently announced that the Federal Reserve will now allow Chinese banks to buy up American banks.

5. A $190 million bridge project up in Alaska was awarded to a Chinese firm.

6. A $400 million contract to renovate the Alexander Hamilton bridge in New York was awarded to a Chinese firm.

7. A $7.2 billion contract to construct a new bridge between San Francisco and Oakland was awarded to a Chinese firm.

8. The uniforms for the U.S. Olympic team were made in China.

9. 85 percent of all artificial Christmas trees are made in China.

10. The new World Trade Center tower is going to include glass that has been imported from China.

11. The new Martin Luther King memorial on the National Mall was made in China.

12. In 2001, American consumers spent 102 billion dollars on products made in China.  In 2011, American consumers spent 399 billion dollars on products made in China.

13. The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

14. According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.

15. The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.

16. The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

17. The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.

18. Overall, the United States has lost a total of more than 56,000 manufacturing facilities since 2001.

19. According to the Economic Policy Institute, America is losing half a million jobs to China every single year.

20. Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.

21. In 2010, China produced more than twice as many automobiles as the United States did.

22. Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.

23. After being bailed out by U.S. taxpayers, General Motors is currently involved in 11 joint ventures with companies owned by the Chinese government.  The price for entering into many of these “joint ventures” was a transfer of “state of the art technology” from General Motors to the communist Chinese.

24. Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.

25. The United States has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.

26. China’s number one export to the U.S. is computer equipment.

27. The number one U.S. export to China is “scrap and trash“.

28. The U.S. trade deficit with China is now more than 28 times larger than it was back in 1990.

29. Back in 1985, the U.S. trade deficit with China was just 6 million dollars for the entire year.  For the month of November 2012 alone, the U.S. trade deficit with China was 28.9 billion dollars.

30. China now consumes more energy than the United States does.

31. China is now the leading manufacturer of goods in the entire world.

32. China uses more cement than the rest of the world combined.

33. China is now the number one producer of wind and solar power on the entire globe.

34. Today, China produces nearly twice as much beer as the United States does.

35. Right now, China is producing more than three times as much coal as the United States does.

36. China now produces 11 times as much steel as the United States does.

37. China produces more than 90 percent of the global supply of rare earth elements.

38. China is now the number one supplier of components that are critical to the operation of U.S. defense systems.

39. A recent investigation by the U.S. Senate Committee on Armed Services found more than one million counterfeit Chinese parts in the Department of Defense supply chain.

40. 15 years ago, China was 14th in the world in published scientific research articles.  But now, China is expected to pass the United States and become number one very shortly.

41. China now awards more doctoral degrees in engineering each year than the United States does.

42. According to one study, the Chinese economy already has roughly the same amount of purchasing power as the U.S. economy does.

43. According to the IMF, China will pass the United States and will become the largest economy in the world in 2016.

44. Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

Without the “globalization” of the world economy, none of this would have ever happened.  But instead of admitting our mistakes and fixing them, our politicians continue to press for even more “free trade” and even more integration with communist nations such as China.

In fact, according to Dr. Jerome Corsi, the U.S. government has already set up 257 “foreign trade zones” all over America.  These “foreign trade zones” are apparently given “special U.S. customs treatment” and are used to promote “free trade”…

Corsi noted that the U.S. government has created 257 foreign trade zones, or FTZs, throughout the United States, designed to extend special U.S. customs treatment to U.S. plants engaged in international-trade-related activities.

The FTZs tend to be located near airports, with easy access into the continental NAFTA and WTO multi-modal transportation systems being created to move free-trade goods cheaply, quickly and efficiently throughout the continent of North America.

“There is nothing in the U.S. government’s description of FTZs that would prevent a foreign government, like China, from operating a shell U.S. company that is in reality owned and financed by the Chinese government and operated through a Chinese government-owned corporation,” Corsi wrote.

Sadly, we are probably going to see a whole lot more of this in the years ahead.

According to Corsi, a professor of economics at Tsighua University in Beijing named Yu Qiao has suggested the following plan as a way to transform the debt that the United States owes China into something more “tangible”…

1. China would negotiate with the U.S. government to create a “crisis relief facility,” or CRF. The CRF “would be used alongside U.S. federal efforts to stabilize the banking system and to invest in capital-intensive infrastructure projects such as high-speed railroad from Boston to Washington, D.C.
2. China would pool a portion of its holdings of Treasury bonds under the CFR umbrella to convert sovereign debt into equity. Any CFR funds that were designated for investment in U.S. corporations would still be owned and managed by U.S. equity holders, with the Asians holding minority equity shares “that would, like preferred stock, be convertible.”
3. The U.S. government would act as a guarantor, “providing a sovereign guarantee scheme to assure the investment principal of the CRF against possible default of targeted companies or projects”.
4. The Federal Reserve would set up a special account to supply the liquidity the CRF would require to swap sovereign debt into industrial investment in the United States.

Apparently the Bank of China really likes this plan and would like to see something like this implemented.

In the years ahead, perhaps many of you will end up working in a “special economic zone” for a Chinese company on a project that is being financially guaranteed by the U.S. government.

If that sounds like a form of slavery to you, the truth is that you are probably not too far off the mark.

The borrower is the servant of the lender, and we should have never allowed ourselves to get into so much debt.

Now we will pay the price.

To get an idea of how much the world has changed in recent years, just check out this incredible photo which contrasts the decline of Detroit over the years with the amazing rise of Shanghai, China.

Things did not have to turn out this way.  Unfortunately, we made decades of incredibly foolish decisions and we wrecked the greatest economic machine that the world has ever seen.

Now the future for America looks really bleak.

Or could it be that I am being too pessimistic? 

Source

When Chinese and Japanese fighters met for the first time over disputed islands in the East China Sea earlier this month, Japan promptly declared its right to fire tracers at China’s jets.

Though met with outrage by China at the time, Japan continues promoting the live firing which Chinese military academics are calling the “first shot”.

The Tokyo AP reports Japan believes it’s simply following protocol:

“Every country has procedures for how to deal with a violation of its territory that continues after multiple cautionary measures,” Japanese Defense Minister Itsunori Onodera said Wednesday when asked if tracer shots would be fired against intruding aircraft that refuse to change course. “We have response measures ready that are consistent with global standards.”

If Japan’s using the talk of tracer fire to gauge Chinese reaction, it was not disappointed.

The Chinese Foreign Ministry said Sunday his country is on “high alert” and that Japan and the U.S. are ignoring the fact that “the islands are China’s inherent territory.”

Never to be left out, Chinese military academics quoted in Beijing’s state-run media provided far more fiery replies:

“Japan’s desire to fire tracer warning shots as a way of frightening the Chinese is nothing but a joke that shows the stupidity, cruelty and failure to understand their own limitations,” Maj. Gen. Peng Guangqian of the Chinese Academy of Military Sciences was quoted saying by the China News Service and other state media.

“Firing tracer bullets is a type of provocation; it’s firing the first shot,” he said. “Were Japan to dare to fire tracers, which is to say fire the first shot, then China wouldn’t stint on responding and not allow them to fire the second shot.”

China then released photos of its East Fleet 052 destroyer during live fire exercises in the disputed area. The maneuvers involved both its East and South Fleets, simulating actual combat scenarios. Including multiple jet fighters and surface vessels, The South China Morning Post reports it as the first time naval air forces employed air-to-air missiles so far out to sea. 

The second massive drill involving the South Fleet January 8, included Hong-6 bombers flying eight hour runs while evading radar and electromagnetic interference as they’d encounter in combat. One Beijing based naval expert said the drills would only increase in frequency and scope, and include other factions of the People’s Army.

That appears to be accurate as China’s also announced its army aviation unit of attack helicopters will shift from a logistics mission in preparation for combat.

The Times of India quotes the PLA Daily, China’s official military newspaper:

The unit will work on major missions such as long-distance tasks, large scale offshore operations, attack coordination with other units and large scale airborne operations, it said, adding that the unit will also aim to improve its operation capability based on IT technologies.

The English PLA Daily army section has several announcements related to its helicopter units,  their accelerated training, and even troops psychological readiness for “military transportation in high-tech wars“.

Finally, because war preparation takes many forms, China’s Communist Party news site the Global Times reports Beijing’s new subway lines are fully online and able to withstand chemical, biological, and nuclear attacks. The tunnels have gates that form a seal between below ground and the street. 

From the Global Times:

Jiang Hao, an engineer from the 4th Engineer Design & Research Institute of General Staff Department, said that the gates for civil defense have already been used in the subway in cities like Nanjing in Jiangsu Province and Shenyang in Liaoning Province. 

“The new facilities also have other defensive capabilities like emergency communication equipment at each station, which makes effective communication possible during a conflict,” Jiang said at the conference.

Of course, this may all be a matter of course as China exercises its financial ability and modernizes its military and infrastructure.

But there is little doubt the disagreement over the disputed islands will quiet down any time soon with such intransigent claims of ownership coming from both countries. The feud also arrives as Japan’s new Prime Minister Shinzo Abe, is eager to demonstrate a more assertive Japanese presence in the region.

With entirely new dynamics at play within the region, it’s difficult to say how much of this back-and-forth is posturing, and how much is some kind of mad inexorable World War I like slide toward the unthinkable.

Source

If there were ever a sign that something is amiss, this may very well be it.

United Nations agricultural experts are reporting confusion, after figures show that China imported 2.6 million tons of rice in 2012, substantially more than a four-fold increase over the 575,000 tons imported in 2011.

The confusion stems from the fact that there is no obvious reason for vastly increased imports, since there has been no rice shortage in China. The speculation is that Chinese importers are taking advantage of low international prices, but all that means is that China’s own vast supplies of domestically grown rice are being stockpiled.

Why would China suddenly be stockpiling millions of tons of rice for no apparent reason?

Perhaps it’s related to China’s aggressive military buildup and war preparations in the Pacific and in central Asia.

If a 400% year-over-year increase in rice stockpiles isn’t enough to convince you the Chinese are preparing for a significant near-term event, consider that in Australia the country’s two major baby formula distributors have reported they are unable to keep up with demand for their dry milk formula products.

Grocery stores throughout the countryhave been left empty of the essential infant staple as a result of bulk exports by the Chinese.

A surge in sales of one of Australia’s most popular brands of infant formula has led to an unusual sight for this wealthy nation: barren shelves in the baby aisle and even rationing of baby food in some leading retail outlets.

We’d be more apt to believe the Chinese were panic-buying baby formula had the Chinese milk scandal occurred recently. The problem is that it happened four years ago. Are we to believe the Chinese are just now realizing their baby food may be tainted?

In addition to the apparent build-up in food stocks, the Chinese are further diversifying their cash assets (denominated in US Dollars) into physical goods.

In fact, in just a single month in 2012, the Chinese imported and stockpiled more gold than the entirety of the gold stored in the vaults of the European Central Bank (and did we mention they did this in one month?).

Their precious metals stockpiles have grown so quickly in recent years that Chinese official holdings remain a complete mystery to Western governments and it’s rumored that the People’s Republic may now be the second largest gold hoarding nation in the world, behind the United States.

We won’t know for sure until the official disclosure which will come when China is ready and not a moment earlier, but at the current run-rate of accumulation which is just shy of 1,000 tons per year, it is certainly within the realm of possibilities that China is now the second largest holder of gold in the world, surpassing Germany’s 3,395 tons and second only to the US.

But the Chinese aren’t just buying precious metals. They’re rapidly acquiring industrial metals  as well.

Spot iron prices are up to an almost 15-month high at $153.90 per tonne. The rally in prices, which started in December 2012, is mainly due to China’s rebuilding of its stockpiles as the Asian giant gears to boost its economy, which in turn, could improve steel demand.

The official explanation, that China is preparing stockpiles in anticipation of an economic recovery, is quite amusing considering that just 8 months ago Reuters reported that China had an oversupply, so much so that their storage facilities had run out of room to store all the inventory!

When metals warehouses in top consumer China are so full that workers start stockpiling iron ore in granaries and copper in car parks, you know the global economy could be in trouble.

At Qingdao Port, home to one of China’s largest iron ore terminals, hundreds of mounds of iron ore, each as tall as a three-storey building, spill over into an area signposted “grains storage” and almost to the street.

Further south, some bonded warehouses in Shanghai are using carparks to store swollen copper stockpiles – another unusual phenomenon that bodes ill for global metal prices and raises questions about China’s ability to sustain its economic growth as the rest of the world falters.

Now, why would China be stockpiling even more iron (and setting 15 month price highs in the process) if they had massive amounts of excess inventory just last year?

Something tells us this has nothing to do with an economic recovery, or even economic theory in terms of popular mainstream analysis.

Why does China need four times as  much rice year-over-year? Why purchase more iron when you already have a huge surplus?

Why buy gold when, as Federal Reserve Chairmen Ben Bernanke suggests, it is not real money? Why build massive cities capable of housing a million or more people, and then keep them empty?

It doesn’t add up. None of it makes any sense.

Unless the Chinese know something we haven’t been made privy to.

Is it possible, in a world where hundreds of trillions of dollars are owed, where the United States indirectly controls most of the globe’s oil reserves, and where super powers have built tens of thousands of nuclear weapons and spent hundreds of billions on weapons of war (real ones, not those pesky semi-automatic assault rifles), that the Chinese expect things to take a turn for the worse in the near future?

The Chinese are buying physical assets – and not just representations of those assets in the form of paper receipts – but the actual physical commodities. And they are storing them in-country. Perhaps they’ve determined that U.S. and European debt are a losing proposition and it’s only a matter of time before the financial, economic and monetary systems of the West undergo a complete collapse.

At best, what these signs indicate is that the People’s Republic of China is expecting the value of currencies ( they have trillions in Western currency reserves) will deteriorate with respect to physical commodities. They are stocking up ahead of the carnage and buying what they can before their savings are hyper-inflated away.

At worst, they may very well be getting ready for what geopolitical analyst Joel Skousen warned of in his documentary Strategic Relocation, where he argued that some time in the next decade the Chinese and Russians may team up against the United States in a thermo-nuclear showdown.

Hard to believe? Maybe.

But consider that China is taking measures now, in addition to their stockpiling, that suggest we are already in the opening salvos of World War III. They have already taken steps to map our entire national grid – that includes water, power, refining, commerce and transportation infrastructure.

They’re directly involved in hacking government and commercial networks and are responsible for what has been called the greatest transfer of wealth in the history of the world. Militarily, the PRC has been developing technology like EMP weapons systems, capable of disabling our military fleets and the electrical infrastructure of the country as a whole, and has been caught red-handed manufacturing fake computer chips used in U.S. Navy weapons systems.

If you still doubt China’s intentions and expectations, look to other governments, including our own, for signs that someone, somewhere is planning for horrific worst-case scenarios:

• The Russians have scheduled 5,000 underground bunkers for completion this year.
• Europe rapidly designed, built and stocked the so-called Doomsday Seed Vault in Svalbard, Norway, which contains tens of thousands of varieties of seeds and is supposed to preserve them in the event of Armageddon style events like asteroid impacts or nuclear war.
• The United States government has been stockpiling tens of millions of emergency meals and other supplies and regionalizing their emergency distribution centers across the country (curiously, those supplies never made it to Hurricane Sandy victims)
• The government has purchased nearly 2 billion rounds of ammunition in the last few years.
• The Pentagon has been Actively War Gaming ‘Large Scale Economic Breakdown’ and ‘Civil Unrest’
• China recently made a call, through their Xinhua news agency, for the complete disarmament of the American population (Behind every blade of grass…)

Perhaps there’s a reason why former Congressman Roscoe Bartlett has warned, “those who can, should move their families out of the city.”

As Kyle Bass noted in a recent speech, “it’s just a question of when will this unravel and how will it unravel.”

Given how similar events have played out in history, we think you know how this ends.

It ends through war.

Governments around the world are stockpiling food, supplies, precious metals and arms, suggesting that there is foreknowledge of an impending event.

Should we be doing the same?

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 Commentators have made much of China’s DF-21D (dubbed by many as the “carrier-killer”) anti-ship ballistic missile (ASBM), which reportedly entered limited service with the People’s Liberation Army’s Second Artillery Corps, or missile force, in late 2010. Their assumption, doubtless correct, is that the U.S. Pacific Fleet represents the ASBM’s primary target. But just as U.S. commanders plan for the hardest case—or against the most capable prospective foe—and trust that the resulting capabilities can handle “lesser included” challenges, PLA commanders can use the ASBM not just for anti-access scenarios involving the U.S. Navy but to pummel less formidable fleets. This is Beijing’s unseen big stick. 

China’s government provided goods and expertise for Iran’s nuclear program in the past and also gave Tehran’s Islamist regime missiles and other arms as part of the nations’ anti-United States policies, according to a congressional commission report made public Thursday.

“The authoritarian governments centered in Beijing and Tehran share an animus towards ‘hegemonism’ and a fear of internal instability,” the report prepared for the U.S.-China Economic and Security Review Commission states.

“In recent decades the United States, supported by regional allies and security partners, has represented the principal hegemonic threat to Iran and China in two different regional contexts: the Persian Gulf and the Western Pacific.”

The 95-page report, “China-Iran: A Limited Partnership,” was produced for the commission by the intelligence contractor CENTRA Technology and dated October 2012.

China provided nuclear assistance to Iran in the 1990s and promised to halt its support in 1997. However, the report said there are indications Beijing has continued to provide covert assistance to Iranian nuclear programs.

On missile experts, the report said, “China has continued measured support to Iran’s defense programs.”

Recent transfers include several export versions of Chinese missiles, including C-705 anti-ship cruise missiles.

“U.S. government sanctions of multiple Chinese companies over the past two years are further evidence that some technology transfers continue,” the report said.

The arms trade and China’s desire to buy energy resources from Iran are Beijing’s main reasons for not supporting international sanctions against Iran for its illicit uranium enrichment program, the report said.

The report outlines extensive cooperation between China and Iran on nuclear weapons as Beijing sought “opportunities to gain commercial benefit from its extensive military nuclear capacity,” the report said.

However, China halted nuclear cooperation with Iran to preserve relations with the United States.

Equipment with both dual-use civilian and military purposes included a 27-kilowatt thermal (kWt) miniature neutron source and a small calutron—an electromagnetic isotope separation (EMIS) device, elements useful for uranium enrichment.

China also provided support for Iran’s Esfahan nuclear center.

Intelligence reports from the 1990s triggered fears in the West. The report said worries “about Iran’s nuclear program—and thus about Beijing’s assistance—was increasing rapidly.”

Also, in 1991 Iran secretly imported 1.6 metric tons of uranium products from China, including about a metric ton of uranium hexafluoride (UF6), which is used in centrifuges to make highly enriched uranium, the report said.

According to the report, China appeared to oppose Iran’s nuclear policy in response to U.S. pressure but “many in China even see Iran’s nuclear development as a positive in that it counters U.S. influence and provides China with strategic leverage.”

Intelligence reports continue to suggest that China or Chinese entities are covertly providing assistance to Iran’s nuclear program, the report said, based on the imposition of sanctions on Chinese companies or people for weapons of mass destruction transfers to Iran.

For example, Li Fang Wei and the LIMMT Economic and Trade Company, Ltd of Dalian China—sanctioned by the U.S. Treasury Department in June 2006—purchased materials for various subsidiaries of Iran’s Defense Industries Organization, which is involved in nuclear development.

“Although the specific end use was not known, the materials were export controlled and potentially could be used for nuclear, ballistic missile, or military programs,” the report said.

Recently another Chinese broker purchased 20 tons of maraging steel from a U.S. firm, claiming the material was to be used in the manufacture of a “magic horse.”

Mark Dubowitz, a specialist on Iran-China relations at the Foundation for Defense of Democracies, said China has provided a hospitable environment for Iran to acquire and transfer a range of arms proliferation-related goods.

“The substantial diversion of these goods through China to Iranian end-users or Iranian intermediaries fits the definition of a ‘Destination of Diversion Concern’ under the Comprehensive Iran Sanctions Accountability & Divestment Act 2010,” Dubowitz said. “The U.S. Congress should pass legislation that formally designates China as a ‘Destination of Diversion Concern.’ A legislative designation by Congress will give the administration leverage to persuade Beijing to crack down on these practices.”

U.S. intelligence reports to Congress also raised new questions about continued Chinese nuclear assistance by indicating since 2000 “some interactions between Chinese and Iranian entities that have raised question about [China’s] ‘no new nuclear cooperation’ pledge” since 1997, the report said.

The latest report to Congress in 2011 said Chinese transfers continued but there was no specific reference to Iran or nuclear assistance.

“There is no publicly available information indicating that China or Chinese entities have directly aided the most sensitive parts of Iran’s nuclear program—uranium enrichment and the ‘possible military dimensions’ addressed in numerous IAEA reports,” the report.

However, Chinese uranium hexafluoride in covert enrichment projects were detected in 1998 and 2002, the report said.

Additionally, the Chinese have provided an array of missiles and related technology to Iran, the report said. They included HY-2 Silkworm anti-ship missiles as well as dozens or perhaps hundreds of missile guidance systems and computerized machine tools to Iran sometime between mid-1994 and mid-1995.

China sold Iran advanced C-801 and C-802 anti-ship cruise missiles in the mid-1990s.

Also, China’s Great Wall Industry Corp. provided the entire telemetry and missile flight-testing infrastructure to support the development of the Shahab-3 and Shahab-4 medium range missiles.

China also supplied Iran with modified Chinese FL-7 antiship missiles that can be fired from either helicopters or fast attack craft.

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It’s the end of the world – unless you’re in the Chinese Communist party. Over the past few weeks, Chinese authorities have detained over 93 people across seven provinces for spreading rumours that the end is nigh, laying bare the party’s obsession with social stability and maintaining its tight grip on power.

Many people in China believe in the so-called “Mayan apocalypse“ – slated to take place on 21 December, the last day on the Mayan long count calendar – because it was the central premise of the disaster film 2012, a box office sensation in China when it was released three years ago.

A man who slashed 22 schoolchildren last week in Henan province was “psychologically affected” by doomsday rumours, wrote the state newswire Xinhua. Shoppers in Sichuan province have been panic buying candles, convinced that Friday will kick off three consecutive days of darkness.

Authorities in far north-western Qinghai province arrested 37 members of a group called the Church of the Almighty God for spreading doomsday rumours last Thursday, according to a provincial government website. The group, which was founded in 1992, believes that a female Jesus has been, or will be, reincarnated in mainland China. It has called for death to the “Big Red Dragon”, its term for the Communist party. Hundreds of its followers have clashed with police in three provinces over the past week.

“A big eye was found in the sun on 9 December in Beijing, and female Jesus manifested herself with her name. Great tsunamis and earthquakes are about to happen around the world,” said part of a text message that the group sent to its adherents, according to the state-run Global Times newspaper. Chinese authorities call the group an “evil cult” that is guilty of embezzlement, kidnapping and torture.

State media said that authorities confiscated “a large number of banners, discs, slogans, books and printing machines”, but did not go into detail. It did not mention the group’s member count, though independent estimates range from thousands to over a million.

The rapid rise of subversive, quasi-religious groups in China is not without precedent. The mid-19th Taiping Rebellion, a bloody uprising against the Manchu Qing emperor, was led by a peasant claiming to be the younger brother of Jesus Christ; his army at one point controlled a swath of the country home to 30 million people. The persecuted spiritual group Falun Gong – also labelled an “evil cult” by Chinese authorities – operates an openly anti-Communist newspaper and television station from overseas.

“There’s an incentive for politicians to strike back at these groups and their way of thinking, to reassure everyone that everything’s going to be all right,” said Joshua Rosenzweig, researcher at the Centre for China Studies at the Chinese University of Hong Kong. “The most important thing is that they are sending a message of zero tolerance and trying to keep control.”

Authorities have detained a total of 34 people in the south-eastern province of Fujian for spreading rumours, six of them for selling red paper discs emblazoned with apocalypse-proof charms. Another four were accused of encouraging pedestrians to save themselves by handing over their names, phone numbers and addresses. Four were arrested in Hebei and Sichuan provinces for distributing cataclysm-themed leaflets, and another four in the south-western metropolis Chongqing for prophesying via megaphone on the city’s streets.

Some Chinese people have found less subversive ways of dealing with the prophesy. Companies have made waves on social media websites by offering doomsday holidays and bonuses. One farmer in Hebei province built seven buoyant steel-and-fibreglass “survival pods” in his garage. Each costs about £30,000, holds 14 people, and includes oxygen, food, water and safety belts. Another pod-maker in Zhejiang province has received 21 orders for his high-quality, custom-made arks. One sold for almost £500,000.

A farmer in the far-western Xinjiang Autonomous Region spent about £100,000 to build a barge-like ark with 60 tonnes of steel and 30 protective layers of fibre resin. “I invested all of my savings in the construction of this boat,” he told Chinese media. “When the time comes, everyone can take refuge in it.”

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China has conducted the first landing of a fighter jet on its new aircraft carrier in a move that extends Beijing’s ability to project its growing military might in territorial disputes.

The Chinese-made J-15 made the successful landing on the Liaoning, a former Soviet carrier, during recent exercises, the defence ministry said in a report Sunday on the flight tests.

The Liaoning went into service in September in a symbolic milestone for China’s growing military muscle that comes at a time when Beijing is increasingly embroiled in a series of territorial disputes with its neighbours.

“The successful landing… has always been seen as a symbol of the operating combat capability for an aircraft carrier,” Zhang Junshe, a vice director at the military’s Naval Affairs Research Institute, told state television.

“This is a landmark event for China’s aircraft carrier… and (moves it) one step closer to combat readiness.”

Video carried by China Central Television showed a tail hook on the rear of the J-15 catching hold of a cable on the deck of the aircraft carrier as the jet landed and slowed to a halt.

China had not previously announced that its navy possessed such highly technical cable landing technology.

The J-15 had also successfully taken off from the aircraft, the ministry said.

The J-15 is a Chinese designed multi-purpose carrier-borne fighter jet based on Russia’s Sukoi 33, equipped with Russian engines and capable of carrying precision-guided bombs, press reports said.

Since the carrier entered service, the crew have completed more than 100 training and test programmes, the ministry said.

China bought the stripped-down 300-metre (990-foot) carrier from Ukraine nearly 10 years ago and refurbished it at the northeastern port of Dalian.

Construction of the vessel, formerly known as the Varyag, was commissioned by the former Soviet Union more than 20 years ago, but work halted with the sudden collapse of the Soviet bloc.

The Liaoning — named for the northeastern province which includes Dalian — is not expected to be fully operational for another three years at least.

Over the past year, China has become increasingly assertive over its longtime maritime territorial claims as its economic and military power have expanded, causing rising anxiety among its neighbours.

Tensions in the East China Sea have risen dramatically in recent months over islands known as the Diaoyus to Beijing and claimed by Tokyo as the Senkakus.

China is locked in a similar row with Vietnam and the Philippines in the South China Sea.

At a key Communist Party congress earlier this month, outgoing President Hu Jintao urged the nation to push forward fast-paced military modernisation and set the goal of becoming a “maritime power”.

Such an endeavour would mean that China would soon need to construct an independently built aircraft carrier, Hu Wenming, chairman of China State Shipbuilding Corp (CSSC) that retro-fitted the Liaoning, said.

“We must enhance our independent weapons and equipment research and production capacity to match the country’s clout, and independently build our own aircraft carriers,” Hu told the China Daily on the sidelines of the congress.

A top Taiwan intelligence official said earlier this year that China had already decided to build two aircraft carriers. However despite rumours that work has already begun, there is no evidence has started.

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In its new report, Looking to 2060: A Global Vision of Long-term Growth, the OECD has announced that China’s economy will surpass the combined economies of the European Union (EU) Member States in a year.

By 2016, China is also expected to overtake the United States (U.S.) and become the largest economy in the world.

Some argue that China becoming the biggest economy is not problematic, because it does not require or imply the U.S. decline. It could in fact mean that not only China, but the U.S. become richer, and that more people could gain access to better living standards.

The OECD report nevertheless points out that the rapid growth of so-called developing countries will shift dramatically the balance of the global economic power over the next half of century, as these countries will account for an increasingly large share of global output.

Global GDP is expected to grow by 3% over the next 50 years, but with large variations between emerging-market economies, which are expected to grow at a much faster pace, and the advanced countries, likely to grow at slower and often declining rates.

By 2025, the OECD report anticipates that China and India’s combined GDP will exceed that of the major seven (G7) OECD economies. By 2060, the Indian economy is also expected to become larger than the U.S. economy. At the same time, the per capita income in China and India will undergo a seven-fold increase, while the per capita income in the poorest countries will quadruple and double in the richest countries.

Nevertheless, global inequalities will persist, given that the living standards in the emerging countries will still be 25%-60% of level enjoyed in the U.S and other so-called advanced economies.

While rising global imbalances could undermine growth, the report claims that they can be reduced through the adoption of structural reforms and fiscal consolidation.

OECD top officials acknowledge that the forecasts contained in the report are not set in stone and that there can be in fact unexpected variations resulting from global or national political and socio-economic changes

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Was last week’s inaugural flight of China’s second stealth fighter linked to the ongoing 18th National Congress of the Chinese Communist Party? Was President Hu Jintao demonstrating his relationship with the People’s Liberation Army (PLA), a powerful lever for elevating his protégés to the apex Politburo Standing Committee?

Several unanswered questions surround the October 31 debut of the J-31 Shenyang fighter, which the pathologically secretive PLA took unusual pains to publicise. Having already unveiled the J-20 Chengdu stealth fighter in January 2011, China is the only country that is developing two separate stealth fighters. The US is developing the F-35 Joint Strike Fighter, albeit in three versions; Russia is working on a single design, the PAK-FA, to which India has hitched its wagon. Separately, Japan is developing the ATD-X demonstrator.

Other intriguing questions include: Given the J-31’s close resemblance to the US F-35 fighter, has China reverse-engineered it from blueprints that Lockheed Martin had reported stolen in 2009 from the computers of six American aerospace subcontractors? Is the J-31 for export only, which would explain the publicity that the PLA is giving it? Or will the PLA use the J-31 as an air superiority fighter while the larger J-20 strikes ground targets, an allocation of roles that mirrors the employment of the F-22 Raptor and the F-35 by the US Air Force? Or is the F-31 a competitor to the J-20, with the better of the two designs destined to go into production?

But the question that most worries the Indian Navy is: does the sturdy landing gear that experts have spotted on the J-31 indicate that the new fighter will operate from Chinese aircraft carriers, giving the PLA Navy, or PLA(N), an aerial combat capability that would outmuscle India’s in the Indian Ocean?

China is focusing keenly on naval air power. Just a month ago China’s first aircraft carrier, the Liaoning, had joined the PLA(N) fleet. The 58,500-tonne Liaoning — bought as scrap from Ukraine for a floating casino, but then renovated in Dalian shipyard into an operational carrier — is the PLA(N)’s first attempt at learning the complex skills of aircraft carrier operations. This is difficult learning. The US Navy lost some 12,000 aircraft and 8,500 airmen from 1949-1988 in developing its naval aviation skills. But Indian planners believe the Chinese will learn quickly, especially when the Liaoning is joined by more modern aircraft carriers that are already being built in China.

Indian Navy planners tell Business Standard that the PLA(N)’s three-pronged process — learning aircraft carrier operations; building one or two modern carriers; and inducting the J-31 — could take a decade or more. But after that, PLA(N) aircraft carrier battle groups could operate in the Indian Ocean, fielding fighters that are superior to India’s.

The Indian Navy’s 45 Russian MiG-29Ks, purchased for two new aircraft carriers, are capable fighters today, but would certainly be outclassed by the stealthy J-31 whenever it enters service. The navy’s new carriers — the 44,000-tonne INS Vikramaditya that could join the fleet next year; and the unnamed, 40,000-tonne Indigenous Aircraft Carrier (IAC) that will be ready only by 2017 — are both fitted with ski-jumps that are custom-built for the MiG-29K to take off.

If the navy wants a more capable fighter, e.g. the Dassault Rafale, which the Indian Air Force is buying, or the F-35C, which is the naval version of the Joint Strike Fighter, it will need an aircraft carrier with a catapult rather than a ski-jump. If the navy designs its second IAC (a 60,000-tonne vessel that is still being conceptualised) with a catapult on the flight deck, a fifth-generation stealth fighter could soon follow.

The navy has already signaled such an interest. In 2006, and again in 2007, New Delhi asked Lockheed Martin (which runs the F-35 programme) for briefings on the F-35B, a short take off and vertical landing (STOVL) variant that the US Marine Corps will fly off its smaller aircraft carriers called Landing Helicopter Docks. While the F-35B could operate from a ski-jump, the F-35C needs a catapult to propel it off the flight deck.

Will the J-31 push the navy towards more advanced fighters and a second IAC with catapult assisted launch? All options remain on the table. Then naval chief, Admiral Nirmal Verma, speaking in Delhi on August 7 shortly before he retired, did not rule out “having an entirely different carrier with a different complement of aircraft.”

That decision, however, would be a difficult one, keeping in mind that two carriers would already be fielding the MiG-29K, and a new fighter would complicate training and logistics.

“I can’t rule out anything or rule in anything. It is something at the concept stage and it will take a couple of years before we firm up our ideas on this,” said Admiral Verma.

The navy’s eyes will be focused on the Zhuhai Air Show, in China, in mid-November for more details that might emerge about China’s new stealth fighter.

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China’s second stealth fighter jet that was unveiled this week is part of a programme to transform China into the top regional military power, an expert on Asian security said on Friday.

The fighter, the J-31, made its maiden flight on Wednesday in the northeast province of Liaoning at a facility of the Shenyang Aircraft Corp which built it, according to Chinese media.

“This is the second entirely new fighter design that’s emerged from China in the last two years, which suggests a pretty impressive level of technical development, and puts them ahead, certainly, of all their regional neighbours,” said Sam Roggeveen, a security expert with the Lowy Institute in Sydney.

The Chinese military “has been extremely deliberate and well funded and persistent, and it’s starting to bear fruit”, Roggeveen said.

“What you’re now seeing since the early ’90s is the slow emergence of a first-class regional military power.”

China’s Defence Ministry did not respond to a request for comment.

China’s previous stealth fighter, the J-20, is a heavier aircraft and believed to be less manoeuvrable than the J-31.

China’s military capabilities lag far behind those of the United States, but China is seeking aggressively to boost its strength, including launching its first aircraft carrier – purchased from Ukraine – in September.

The buildup is a worry for neighbours uneasy about China flexing its military muscle, especially in territorial disputes with Japan in the East China Sea and with Vietnam and the Philippines in the South China Sea.

“Just like the U.S. F-22 and F-35 fifth-generation fighters, the J-20 and J-31 will complement each other during future operations,” Bai Wei, former deputy editor of the weekly Aviation World, told the Global Times newspaper.

“The J-31 is almost certainly designed with the intention to have the potential of operating on aircraft carriers, judging from its enhanced double-wheel nose landing gear and two big tail wings, which help increase vertical stability,” Bai said.

China needs both the heavier J-20 and more nimble J-31 to defend its air space, Bai said.

The J-31 is a mid-sized fighter using Russian-made engines which will later be replaced by Chinese engines, the Global Times reported.

“The big Achilles heel for Chinese aerospace generally, and particularly for both of these two programmes, is engines,” Roggeveen, a former analyst for Australian government intelligence and editor of the Lowy Institute’s blog LowyInterpreter.org.

“They still rely very much on foreign technology, and their progress on developing domestic high-performance engines for combat aircraft has been frustrating and slow,” he said.

While the J-31 and J-20 will add to China’s offensive as well as defensive capability, “it will take many, many years” for them to enter service with the air force, Roggeveen said. (Reporting by Terril Yue Jones; Editing by Robert Birsel)

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BEIJING — In a ceremony attended by the country’s top leaders, China put its first aircraft carrier into service on Tuesday, a move intended to signal its growing military might as tensions escalate between Beijing and its neighbors over islands in nearby seas.

Officials said the carrier, a discarded vessel bought from Ukraine in 1998 and refurbished by China, would protect national sovereignty, an issue that has become a touchstone of the government’s dispute with Japan over ownership of islands in the East China Sea.

But despite the triumphant tone of the launching, which was watched by President Hu Jintao and Prime Minister Wen Jiabao, and despite rousing assessments by Chinese military experts about the importance of the carrier, the vessel will be used only for training and testing for the foreseeable future.

The mark “16” on the carrier’s side indicates that it is limited to training, Chinese and other military experts said. China does not have planes capable of landing on the carrier and so far training for such landings has been carried out on land, they said.

Even so, the public appearance of the carrier at the northeastern port of Dalian was used as an occasion to stir patriotic feelings, which have run at fever pitch in the last 10 days over the dispute between China and Japan over the East China Sea islands, called Senkaku in Japan and Diaoyu in China.

The carrier will “raise the overall operational strength of the Chinese Navy” and help China “to effectively protect national sovereignty, security and development interests,” the Ministry of Defense said.

The Communist Party congress that will begin the country’s once-in-a-decade leadership transition is expected to be held next month, and the public unveiling of the carrier appeared to be part of an effort to forge national unity ahead of the event.

For international purposes, the public unveiling of the carrier seemed intended to signal to smaller nations in the South China Sea, including the Philippines, an American ally, that China has an increasing number of impressive assets to deploy.

American military planners have played down the significance of the commissioning of the carrier. Some Navy officials have even said they would encourage China to move ahead with building its own aircraft carrier and the ships to accompany it, because it would be a waste of money.

Other military experts outside China have agreed with that assessment.

“The fact is the aircraft carrier is useless for the Chinese Navy,” You Ji, a visiting senior research fellow at the National University of Singapore, said in an interview. “If it is used against America, it has no survivability. If it is used against China’s neighbors, it’s a sign of bullying.”

Vietnam, a neighbor with whom China has fought wars, operates land-based Russian Su-30 aircraft that could pose a threat to the aircraft carrier, Mr. You said. “In the South China Sea, if the carrier is damaged by the Vietnamese, it’s a huge loss of face,” he said. “It’s not worth it.”

Up to now, Chinese pilots have been limited to practicing simulated carrier landings on concrete strips on land in Chinese J-8 aircraft based on Soviet-made MIG-23s produced about 25 years ago, Mr. You said. The pilots could not undertake the difficult maneuver of landing on a moving carrier because China does not yet have suitable aircraft, Mr. You said.

The question of whether China will move ahead and build its own carrier depends in large part, he said, on whether China can develop aircraft to land on one. “It’s a long, long process for constructing such aircraft,” he said.

In contrast to some of the skepticism expressed by military experts outside China, Li Jie, a researcher at the Chinese Naval Research Institute, said in an interview in the state-run People’s Daily that the carrier would change the Chinese Navy’s traditional mind-set and bring qualitative changes to its operational style and structure, he said.

Although the Chinese military does not publish a breakdown of its military spending, foreign military experts say the navy is less well financed than the army and air force.

Bree Feng contributed research.

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