China Dream or Nightmare?

China Dream or Nightmare?
By Erick San Juan

"We must make persistent efforts, press ahead with indomitable will, continue to push forward the great cause of socialism with Chinese characteristics, and strive to achieve the Chinese dream of great rejuvenation of the Chinese nation. To realize the Chinese road, we must spread the Chinese spirit, which combines the spirit of the nation with patriotism as the core and the spirit of the time with reform and innovation as the core.”  - Chinese President Xi Jinping

This is how President Xi Jinping described his China Dream and he made his first reference to it in November 2012, when he was promoted to the top Communist Party post.

The propaganda storm began in earnest after he became president in 2013. He used the term numerous times in his first address to the nation as head of state on March 17, 2013. (From the Economist online 5/4/2013)

There is nothing wrong to have a dream especially if it’s for the good of one’s country. But it is very important to have some sort of a roadmap to achieve such dream or goal. In the case of China dream, some observers believed that Mr. Xi has been short on specifics and on how to put the dream into practice.

“Others are not so optimistic about the China Dream. They see it as a propaganda campaign by the ruling Communist Party to win public affection. It certainly comes as problems mount for China's leaders.

The economy is slowing and more university graduates are now struggling to find jobs. There is also growing anger over official corruption and pollution.” (Ibid)

Sounds familiar? Any government leader dreaming of a better life for its countrymen will be frustrated if there will be no effort in addressing the perennial problems confronting the daily lives of the populace.

Some analysts are quick to notice the decline in China’s economy, and where else does this significant decline will go but the collapse of a dream that in the process may turn into a nightmare.

From the Wealth Daily’s Special Report (June 12, 2013 | Opinion page) stated that - China has the world’s largest population and second largest economy. In the last few years, it’s seen an outstanding economic growth rate, averaging 9 to 10%. The fact that China is now the world’s largest trading country makes this pretty significant.

But in the second half of 2012, this fell short… Growth was 7.6%, a three-year low.

Another red flag appeared towards the end of the summer when the Purchasing Managers’ Index, which measures manufacturing activity, fell to a nine-month low — dropping from 53.1 to 52.0. The 50-point mark separates expansion from contraction, and though China’s number was still above that line, it was hovering dangerously close.

One thing after another has had analysts turning a suspicious eye to China, a quickly-developing nation that, until now, had inspiring economic growth. And one after another, these analysts are all asking the same question: Is China’s economy on the brink of decline?

One factor that has contributed to its decline could be the “government corruption has been the link behind all of the slowing sectors in China. High-ranking officials and their self-interest have perpetuated the economic bubbles and pushed many sectors to the current point of instability. And it’s these officials that will continue to push them past the point of no return.

Past Chinese leaders did not address this perennial problem of corruption that it snowballed into something really big that is pushing the Chinese economy down the slope. Scandal after scandal has been the talk of the town, so to speak.

One of the biggest scandals that lit up the news recently was that of former Chinese politician Bo Xilai’s wife, Gu Kailai, who was tried and convicted for the murder of British businessman Neil Heywood. The murder took place after an alleged dispute between Heywood and Gu Kailai, during which Heywood was said to have threatened the woman’s son.

But this trial, which repeatedly made international headlines, is just the tip of the iceberg for Chinese government corruption…

Other instances are much less public, lack hard evidence, and are therefore all the more treacherous to the economy.

In March the son of senior party official Ling Jihua was killed in a car accident. It wasn’t the tragic death that struck suspicion, but the circumstances surrounding the event: Ling Jihua’s son was driving a Ferrari when he crashed, a car worth $270,000. His father, meanwhile, makes a reported annual salary of $15,000. The car was worth 18x his father’s annual pay. (Ibid)

There are other cases of corruption among the high-ranking Chinese officials that tops the list of the Chinese populace long list of grievances. Other problems that besets China are - strong production, weak demand, housing bubble, bad loans, precarious balance, among others.

Li Zuojun, deputy director at the Development Research Center of the State Council, wrote in a paper detailing the specific ways China must overcome its economic challenges:

    “If the government uses a superb macro-control technique, lets the air out of the bubbles little by little without triggering an economic crisis or social unrest, and timely cultivates new economic growth and new competitive advantages so that businesses are restructured and upgraded…the bubbles would not burst. However, in 2013 there will be unprecedented pressure, which will warrant a high degree of vigilance and attention.

But if government corruption continues to overshadow this “vigilance and attention” to economic growth, China’s situation will get worse… to the point that thirty years of growth will implode.” (Ibid)

Such situation is not farfetched and could it be that the China Dream that President Xi Jinping wanted to happen will become a nightmare? Or the China Dream is the prelude to hard times ahead?

 Let's hope that the pattern of world wars will not happen this time....

NFU Policy Rhetoric by Erick San Juan

NFU Policy Rhetoric by Erick San Juan

Over the weekend, the world has witnessed the meeting of the leaders of G2 – US and China in California. But the real crucial issues like the growing tensions in the South and East China Sea were not leaked to the public if both big powers talked about it.

China’s leader Xi Jinping told the media that he and Obama were meeting “to chart the future of China-US relations and draw a blueprint for this relationship.” Then he added: “The vast Pacific Ocean has enough space for two large countries like the United States and China.”( Translation- US wants to pivot in Asia through South China Sea. We can do better in the Pacific.)
                                                                                       
This is how Xi views the region as a vast area that the G2 could divide between themselves and to hell with the other sovereign countries occupying the region. And, it seems that 'big brother’ deliberately forgotten to discuss the nagging issue on ‘freedom of navigation’ in the SCS that covers Washington’s interest that is why they ‘returned’ to the Asia-Pacific region in a rebalancing act in the first place.

The mere fact that it was and will be Uncle Sam’s interest in the region that will prevail in the long run, allied countries should be wary in dealing with the big brother.

We never learned from history, our past leaders did everything to satisfy the whims of Uncle Sam and yet we were shortchanged in the process. Even to date, our war veterans are still in the wait and see mode as to when they will get their pensions as WW2 veterans.

Presently, the whole country is like a virtual US military base (doormat) in the region and with the growing tension in the SCS and the continuous ‘bullying’ of China, we are like a big magnet attracting the enemy of USA. When in fact it is Uncle Sam’s interest which is at stake here and not ours. So why do we have to kowtow every time to their whims up to the point that we are putting the whole populace in danger?

It is about time that the present leadership must rethink and re-assess our relationship with the US. We just cannot afford to be their cannon fodder anymore because the stakes and risks are getting high as the drums of war are getting louder in the region. The possibility of our country (or Vietnam) to be the epicenter of the regional conflict is not farfetched that is why we have to be always vigilant.

As Washington is being indirectly threatened and reminded by the release of China’s 8th defense white paper as what it stated – “More interesting, while also somewhat conventional, is the description of the external security environment. The white paper condemns “some country” that has strengthened its military alliances in the Asia Pacific region, “expanded its military presence in the region, and frequently makes the situation there tenser. The United States is not identified by name, but it is the only country that fits the bill. It is not clear which is more revealing of Chinese thinking: the description of U.S. policy or the reluctance to name Washington.” (Editorial - Window on China’s defense policy, The Japan Times online, May 21, 2013)

And with too much rhetoric (and doublespeak) that dominated the so-called G2 summit, the bottom line is still - the fear of countries in the Asia-Pacific region (and the world) which is the first strike nuclear policy that might be employed by either of the G2.

As if reading our mind, China’s white paper did not mention the “no first use” (NFU) of nuclear weapons, the mainstay of the country’s strategic policies.

In the discussion of the paper, foreign security specialists ask whether this omission signals a shift in Chinese policy; officialdom in Beijing adamantly denied any change, noting that the white paper is written thematically and the NFU policy did not fit this structure.

But there is a debate in China about nuclear doctrine. The white paper could do a long way toward its intended purpose by acknowledging that fact and identifying the contours of that discussion. That would shed light onto Chinese strategic thinking and provide the transparency that can then provide a foundation for discussions with other nations and build the mutual trust that China professes to cherish.” (Ibid)

Having this in mind, Uncle Sam will not allow any country that challenges its supremacy to be caught flat-footed when this thing happen. Washington always wants to be the first in everything even to the detriment of humanity. God forbid.

Man-made Crisis by Design

Man-made Crisis by Design
Erick San Juan


This year’s IISS Asia Security Summit: Shangri-La Dialogue (SLD) in Singapore which I attended could be summed up in one word – ......... Plenty of it especially by the G2 - China and the US.

Actually, Shangri-La Dialogue (SLD) is an inter-governmental security forum held annually by an independent think tank, the International Institute for Strategic Studies (IISS) which is attended by defense ministers, permanent heads of ministries and military chiefs of 28 Asia-Pacific states. The forum gets its name from the Shangri-La Hotel in Singapore where it has been held since 2002.

The summit serves to cultivate a sense of community among the most important policymakers in the defense and security community in the region. Government delegations have made the best out of the meeting by holding bilateral meetings with other delegations on the sidelines of the conference. While primarily an inter-governmental meeting, the summit is also attended by legislators, academic experts, distinguished journalists and business delegates.

But as what the expert, John Chipman, the Director General and Chief Executive of the IISS said "Every year seems to produce an awful lot of tension in the Asia-Pacific."

"Certainly in the last four or five years, we have been confronted by North Korean missile tests or launches and all sorts of controversy over the South China Sea - the East China Sea this year has been particularly busy," he notes.

"So the Shangri-La Dialogue offers an opportunity," he argues, "to pause the button for a moment and have all the defense ministers of the region and those who have a stake in Asia-Pacific security to discuss what the problems are and how they might begin to address them more effectively. (Source: Jonathan Marcus BBC defense correspondent)

But how can the defense ministers tackle the issues and problems when they are hiding under the veil of rhetoric?  Or maybe such doublespeak is intended to cover up the real scenario that the G2 (US and China) wanted to happen.

In truth, not everything that happens in this world is by accident. Most of them are crisis by design and programmed scenarios. Just like the South China Sea flashpoints where the Philippines, China and Vietnam could be the epicenter of conflict.

The mere fact that as a country we are striving to modernize our armed forces (with museum-grade war materiel) in the midst of the growing tension in the region by engaging with more provocations than diplomacy in territorial disputes with China, and recently with Taiwan.

Unfortunately we are helpless and just could not depend on the ‘big brother’ for assistance if ever there will be an attack from the outside.

Although some pundits say that Vietnam and China could spark the conflict in the region.  Actually the most recent one was two months ago when Vietnam accused a Chinese vessel of firing on their fishing boat near the Paracel islands, setting it alight. But China’s foreign ministry said that it was  a ‘legitimate’ action.

Confrontations like this will take place in a regular basis in the contested areas in the SCS among the claimants and China if there will be no clear discussions on the matter. And, a regional conflict is in the offing between China and Vietnam as what I have written in the Customsweek several years ago (in the 90's) because this is a long time studied scenario that I learned from the Heritage Foundation.

And like any crisis by design, the question will always be – who will benefit?

Remember that two important ‘meetings’ will happen this month – one, between US President Barack Obama and President Xi Jinping of China which will take place in an ‘informal manner’ in California (June 7 and 8) and two, the 61st annual Bilderberg conference that will take place in The Grove Hotel, United Kingdom (June 6 to 9).

Is it possible that  the planned SCS regional war where the epicenter could be between China and Vietnam will serve as a leverage for the Obama – Xi meeting or with the Bilderberg conference? Just asking.

G2 and the 2-Pronged Taiwan Issue

G2 and the 2-Pronged Taiwan Issue
By Erick San Juan


US Pacific Command’s Brig. Gen. Michael A Keltz says Chinese officials told him the Pacific should simply be divided in two, with America dominating one half and China the other. (Taken from US, China Deepen Military Ties by Peter Apps, Political Risk Correspondent, Reuters)

It seems that the world’s perception of the growing rift between Washington and Beijing has proven wrong when this analysis by Peter Apps appeared saying that “even as the United States accuses China of military espionage and worries about Beijing’s more strident posture in the Asia-Pacific region, the ties between the armed forces of the two nations have been getting closer. Direct contact between China’s People’s Liberation Army (PLA) and some of its potential adversaries has increased dramatically in the last two years.”

The mere fact that even Australia in its 2013 Defence White Paper signals military shift toward China – “As an indicator of Australian efforts to face the blunt reality of China’s rising military machine, the report cites Prime Minister Julia Gillard’s visit to Beijing last month, when it was agreed to designate their bilateral relationship as a “strategic partnership.”

As a result of the trip, Australia and China will conduct annual dialogues at the “leaders-level” with two new ministerial-level dialogues: the Foreign and Strategic Dialogue and the Strategic Economic Dialogue.

These will be in addition to the longstanding Defence Strategic Dialogue held annually between the Department of Defence and the People’s Liberation Army. Australia is one of the few countries that have a strategic dialogue at the four-star level with China.” (www.defensenews.com)
                                           
Sounds familiar! Remember the Glastnost and Perestroika of Gorbachev which led to the downfall of the Soviet Union..Gorby stayed in San Francisco, USA near the Golden Gate bridge to save his ass.
                                               
With the abovementioned scenario among the three countries playing a major military role in the region, our country is caught unaware that an ongoing proxy war is actually happening right under our noses. Sadly the government missed the two-pronged Taiwan issue besetting our nation.

One, some pundits noticed that China’s hand is fanning the Taiwan issue in order to escalate the anger of the Taiwanese against us.

Philippine labor and diplomatic officials have been given strict instructions not to talk to the media about the Taiwan mess: first, because the incident off Batanes waters is still under investigation; and second, as the issue has implications not only on Philippines-Taiwan relations, but in the entire West Philippine Sea. What is China’s role in this mess?

For one, Taiwan President Ma Ying-jeou and the Kuomintang party are now known to be pro-China. And President Ma has a below-20 percent popularity rating among his people. He needs a strong stance around which he wants to rally his people.

A Manila-based Filipino diplomat believes that China may have a hand fanning the weak flames against the Philippines in Taiwan. He said China – using pro-China elements in Taiwan government and media – wants to provoke people-to-people fight in Taiwan to test the water and see what the Philippines might do. He said the Batanes shooting may be a good case for the bigger territorial dispute that the Philippines has with China. (Source: Veronica C. Uy, InterAksyon.com)

I have written about this many times and talked about it in my daily radio program that China (and US) had to find an ‘excuse’ to unite their citizenry in order to avoid a possible civil war within their nation-states. From the same report by Veronica Uy, she cited the call for unity amongst Chinese people that appeared @www.globaltimes.cn - The editorial called on “Chinese society (to) stay united in the South China Sea disputes, rather than making different calculations in front of the provocative Philippines.”

It proposed that mainland Chinese also suspend tourist trips to the Philippines and slow down imports from the Philippines.

"We call on people in Hong Kong and Macao to join this joint action against the Philippines. This will make a special contribution to both protection of sovereignty and social solidarity among the Chinese people,” the Chinese news website said.

Calling for unity among all Chinese people, the website added: “The latest crisis may last a while, during which Manila will probably seek a chance to drive a wedge between the two sides across the Straits. But on the other hand, it could also become a period in which the Chinese people clearly feel each other's support…The whole of Chinese society must stand together to guarantee its victory.”

Now that we know what this is all about, the question is: How do we respond?

A very good question which so far has been addressed poorly by the people around the present administration due to the fact that it is believed being done deliberately in order to cover up the election issues vis-à-vis Smartmatic’s hocus PCOS. This is the other side of the coin in the so-called Taiwan issue where the ‘fanning of the flames of anger’ is actually coming from within. And in the process, the various issues and problems confronting the results of the recent elections orchestrated by some of the officials of Complec is being put in the back burner.

A lot of concerned citizens are doing a great job in trying hard to expose the anomalies that ‘envelope' the recently concluded elections. The ball is in the Palace court, something has to be done to correct this. But if there will be no moves to right the wrongs, the cheating conspiracy has reached the Palace. So what else is new?

Weiqi: Chess of War! by Erick San Juan

Weiqi: Chess of War! by Erick San Juan

Taiwan’s  air and naval drills in the Bashi Channel – the disputed waters between the Philippines and Taiwan pushed through amidst the growing tension, a week after the incident that killed a Taiwanese fisherman.  While former police officer Abner Afuang burns a Taiwanese flag in Lawton, Manila, to protest Taiwan’s moves against the Philippines. I’m sure, lots of Filipinos are praying that the situation will be resolved peacefully as the temperature is really getting hotter with each passing day.

Philippines is being bombarded with endless sanctions coming from the government of Taiwan. We are now already given eleven sanctions  in a week’s time. Taiwan’s Premier Jiang Yi-huah even told his fellowmen that the sanctions given will most likely be for the long term.

The mere fact that the show of force of Taiwan’s air and naval drills using war materiel courtesy of Uncle Sam, are supposedly be used against China with its supposed bullying against its neighbors and not towards another ally of the US.

But,  according to the State Department spokesman - "the U.S. is concerned by increased tensions between two neighboring democracies and close American allies. It urges both to clarify disagreements and ensure maritime safety.” (Source: Voice of America news 5/16/2013)

Of course, the above mentioned comment of the big brother is expected to be as neutral as possible because both nation states are strategically important to its so-called Asia-Pacific pivot in containing China.

Given this situation, many might ask - is Taiwan over reacting? Are they laying the predicate for China’s move to join them in their provocations for war? Or maybe what a political pundit has been saying that there is a possible existing secret agreement between the elite of China and the US with the globalists to divide the world control among the super elites by staging a war is real. 

In one of my interaction with several think tanks’ fora in the past, the self fulfilling prophecy by some of the learned that in the future, big business and supers elites will control nation states before uniting the world for one world governance.

That could possibly explains the strange attitude of the Taiwanese government to the Filipinos that has emboldened their nationals to attack our kababayan OFWs including our MECO officials plus the sudden military exercises near our border is a clear provocation for war.

The Kuomintang Party used to be an anti-Communist organization. It metamorphosed into a pro-Beijing party. Pundits believe that the pro-Beijing leaders of Taiwan and Hong Kong are part of the conspiracy to get our nation without firing a single shot. We're like a rice cake (bibingka) being cooked  from top and bottom.

Or could it be that our Motherland is part of the secret bailout of the US to pay their trillions of dollars debt to China? Just asking.

In the past, you can see Chinatown in several nations in the world. Now it was reported in some websites and in the local papers that in Michigan, that there is a move to build a China City near Detroit, Michigan. The news report stated – ‘A Chinese group known as “Sino-Michigan Properties LLC” has bought up 200 acres of land near the town of Milan, Michigan.  Their plan is to construct a “China City” with artificial lakes, a Chinese cultural center and hundreds of housing units for Chinese citizens.  Essentially, it would be a little slice of communist China dropped right into the heartland of America.  This “China City” would be located about 40 minutes from both Detroit and Toledo, and it would be marketed to Chinese business people that want to start businesses in the United States.’

The analysis made by J Vincent Burr of the Michigan Standard explains the strategy used by China, “the Chinese have been buying real estate in the US for a while now, but this move into infrastructural areas such as power plants, manufacturing facilities, oil and gas fields etc., are concerning to many residents. The long term implications are unclear, but we do know that we’re moving into uncharted territory by allowing an enemy country to gain such a significant foothold within our borders.

To better understand their long term strategy here, it might be worth looking at the Chinese game of Go or weiqi as it is known in China is a game of strategy, in the way that many westerners consider chess to be a game of strategy. The goals are very different though.

In chess, the goal is to attack and capture pieces with the goal of forcing the king to surrender. However, the goal of weiqi is simply to control territory, thereby controlling your opponent. You do not need to waste resources trying to capture your opponent, because if you control their territory, you control your opponent anyway.

The real world advantage of adopting an eastern weiqi strategy versus a western chess strategy is that you are able to exert more control while expending fewer resources. You can simply look to US efforts to exert influence in the Middle East as an example of this. Now ask yourself, how many resources does China is wasting with their approach?

Before you dismiss the analogy of a game to the recent territorial grabs by China here in the US, understand that the game of weiqi has been used for over 2,000 years to train diplomats and business men in China in matters of strategy. Sun Tzu’s Art of War is founded on weiqi principle and it shapes everything they do in business and politics. The territorial grab we’re seeing now is all just part of the game.”

Beware of Don Claro Recto's warning that in the future our beloved country Philippines could be a province of China. Need I say more?

Fighting Several Fronts

Fighting Several Fronts
By Erick San Juan

In the midst of the mid-term election fever and the tensions that went with it after the voting hours and during the canvassing of votes, our country was once again put in a very critical position with our neighboring countries.

Most Filipinos were caught unaware of the dangers posted by the incident that happened last Thursday when the Philippine Coast Guard admittedly fired at one of the four Taiwanese fishing vessels that had strayed into our waters and killed a Taiwanese fisherman.

I hate to say this but here we go again, people repeating history like what happened at the Luneta tragic hostage – taking some few years back which was peacefully settled due to the intervention (allegedly)of a Tsinoy businessman. Back then, several sanctions were about to be implemented but were halted by the said businessman.                                                                    

The Taiwanese government reportedly has not forgotten the blunder of our immigration office where several Taiwanese were deported in China instead of Taiwan. The issue had a twist when Beijing turned over the Taiwanese to the Taipeh government.

Basically, we fear for the thousands of Filipino workers in Taiwan and most probably in Hong Kong and China that might be deported due to the recent incident. And worst of all, the three China's are up in arms against our government. The Taiwanese government has made a press conference to stop the hiring of Philippine workers. Can the PNoy administration handle such situation where thousands of our fellowmen will go home without any hope of finding a job here? That is the main reason why they took the risk of going out of the country because there are no jobs available here in the first place.

According to news reports, even though apologies were extended by Antonio Basilio, the Philippines’ de facto ambassador to Taiwan through their Foreign Minister David Lin but President Ma Ying-jeou insisted that Manila should offer a formal apology and compensation, apprehend the killer and launch talks on the fishing industry. From the words of his spokeswoman Lee Chia-fei, President Ma expressed his strong dissatisfaction over the Philippines' lack of sufficient sincerity and its shifting attitude.

Why did the situation reach this crucial point? It seems that after three years in office of the present administration, we still lack the right persons with expertise in handling situations like these, as if nobody is minding the store (again?).

As an observer of events, I have been reminding our people especially in the government to be wary and always on the lookout for possible confluence of events which might leadto the invasion of our country by the Chinese without firing a single shot. I have written about this (@ericksanjuan.blogspot.com) and never get tired of warning our government to be always vigilant against the infiltration of our Chinoy and ethnic Chinese migrants by Chinese 'businessmen' from China, Hongkong and Taiwan. As I always say, fear China from within.

Although some pundits say that the recent ‘shooting’ incident is a good copy that will create a scenario for something else, translation – laying the predicate for a possible conflict in the region. But in the end, the question remains – who will benefit? Is there a brewing connivance of this G2 to invade our country by one of them and in the process the mighty one will allow such invasion as ‘payment’ and presto, all the country’s resources will be taken from us easily.

With the turn of events, such scenario is possible if we will continue to dilly-dally (noynoying) as if there is no urgency to act on the matter at hand.

This time around, let us unite and support the right moves of our leaders, it is not a joke to fight several fronts especially if there is so much at stake.

 President Aquino should immediately convene the National Security Council to avert a possible confrontation and a designed crisis brewing.

Creating the Situation

Creating the Situation
by Erick San Juan                                                                                                                                           

I read the book review of Timothy Westmyer, research and program assistant-Rising Powers Initiative, Sigur Center for Asian Studies at the George Washington University about  paradoxical trend which came from the lecture of Andrew Wedeman, professor of political science at Georgia State University. In Wedeman's recent book, "Double Paradox: Rapid Growth and Rising Corruption in China", he explained how and why the Chinese economy performed so well in spite of widespread corruption at almost kleptocratic levels in China.                                                                                                                                                                                             

Wedeman argued that by any reasonable measure, China had a long standing serious problem with corruption. He cited Transparency International, an anti-corruption watchdog that ranks countries by their levels of corruption. China was pinpointed as the second most corrupt nation in the world on their 1995 list. He added that China has a number of high-profile corruption cases ranging from dishonest deals in real estate, massive smuggling operations to pension fund thefts and the controversial murder-bribery story of Bo Xilai.                                                                                                                                                                                               

Timothy Westmyer said that the conventional wisdom of economic theory would predict a strong negative correlation between corruption and economic growth. As the rate of extortion, bribes, kickbacks and looting  increased in a nation, one would expect economic growth to suffer. But not in China?                                                                                                                                                                                               

Professor Wedeman pointed out that China's GDP(gross domestic product) per capita was unaffected by persistent corruption and grew rapidly since the early 1980's. He cited 3 major reasons how China did it. The timing of economic growth before corruption took hold, the specific nature of it's economic reforms and a genuine anti-corruption efforts advocated by Deng Xiao Ping in 1982 when he declared a 'war on corruption' that is still echoed by China's  leaders today.                                                                                                                                                                                                       

But what went wrong?  China now felt the danger to it's economic growth and party control of too much corruption. One of Deng Xiao Ping's economic reforms like the transfer of assets such as property from the state to entrepreneurs that fostered economic growth became an important source of corruption. According to pundits, the new generation of Chinese leaders headed by it's new president, Xi Jin Ping, regrouped and shift gear, focused on external threats to unite China. It is believed that the new politburo is quietly making serious adjustments in their foreign policy. The focus is South China Sea firstly, to counter the U.S. pivot in Asia. In particular, a more tough defense positions in the South China Sea.                                                                                                                                                                                                

China could be fighting several fronts in the process. The aggravation of several territorial disputes between Beijing and Tokyo regarding the Diaoyu island; between Beijing and Manila regarding Scarborough Shoal and the Kalayaan Island Group and between Beijing and Hanoi over the Paracels. China's PLA(People's Liberation Army) sees the US as the biggest threat and using their allies in Asia to contain China.
                                                                                                                                                                                                 
Peter McKenzie of PolicyMic.com believed that China could spark the next big war. The territorial disputes could allegedly herald a volatile flashpoint where a large incident could provoke war on an international scale. With China's 9 dotted lines and other historical claims, McKenzie argued that a single blunder could further incite either China or the coalition of Asian states that usually oppose to declare war on one another. He concluded that a war in this region will greatly affect the international community as well as Asia.                                                                                                                                                                                                      

Almost every nation in Asia-Pacific can hear the drums of war. David Wroe , a defence correspondent of the Sydney Morning Herald reported that a US military strategy being mapped out to deal with the growing power of China in the western Pacific- a plan that would inevitably ensnare Australia could escalate into a nuclear war. In a study by the Australian Strategic Policy Institute, the fashionable "AirSea Battle" concept which Washington strategists are developing to keep the US grip on its air and sea power near the Chinese mainland, contains uncertainties and potential shortfalls that could heighten the nuclear risk.   So who will create the situation? Who will blink first? The economics of war is in the offing!