Quotulatiousness

August 14, 2010

China’s petroleum producers make more sense than the US government

Filed under: China,Economics,Environment,USA — Tags: — Nicholas @ 01:01

Not everybody has bought into the “ethanol as a clean alternative to petroleum” bullshit: China’s petroleum producers are asking the Chinese government to stop subsidizing the corn-to-ethanol project (similar to the US government’s subsidy program).

[. . .] to enjoy the subsidy of 1880 Yuan per ton of alcoholic gasoline for vehicles and the tax-exemption policy for the corn-to-ethanol project, some plants in China began a wave of buying corn, causing the severe shortage of corn for animal feed and the rapid increase of corn prices.

“In the first half year of this year, China imported 78 million tons of corn, mainly due to the higher domestic corn price than overseas. In July, the average corn price in northeast China was 1845 Yuan per ton, rising by 15.7% year on year” said Zhang Jianbo, a market analyst with Distribution Productivity Promotion Center of China Commerce…

Of course the US has also been criticized for this insane subsidy of corn ethanol as well and blamed for dramatic price increases in corn based products in Mexico, and South/Central America.

The bottom line is corn ethanol makes no economic sense, never did, and when the total environmental impact end-to-end from dirt farm to tailpipe is considered, its even worse than ordinary gasoline. Its always been a lose/lose proposition all the way around, and many of the environmental groups have started to cool on their enthusiasm for it as the real cost/impacts manifested themselves.

Even if you’re not a whole-hearted “green”, this kind of market-rigging by government intervention should be greeted with derision: it’s not “green” to consume more resources to produce a less energy-intensive end-product and pretend it’s a viable substitute. This is another case where the government would produce better environmental results by burning the dollar bills rather than using them to subsidize corn production for ethanol.

July 26, 2010

The unwillingness to disbelieve

Filed under: China,Economics,India,Media — Tags: , , , , — Nicholas @ 15:03

Mike Elgan debunks the latest “mind-crogglingly cheap computer for the masses” announcement:

“India unveils $35 computer for students,” says CNN.com. “India unveils prototype for $35 touch-screen computer,” reports BBC News. “India to provide $35 computing device to students,” says BusinessWeek.

Wow! That’s great! Too bad it will never exist. That this announcement is reported straight and without even a hint of skepticism is incomprehensible to me.

[. . .]

India itself doesn’t build touch screens. They would have to be imported from China or Taiwan. The current price for this component alone exceeds $35. Like touch screens, most solar panels are also built in China. But even the cheapest ones powerful enough to charge a tablet battery are more expensive to manufacture than $35.

Plus you need to pay for the 2GB of RAM, the case and the rest of the computer electronics. Even if you factor in Moore’s Law and assume the absolute cheapest rock-bottom junk components, a solar touch tablet with 2GB of RAM cannot be built anytime soon for less than $100.

More to the point, no country in the world can build a cheaper computer than China can. The entire tech sector in China is optimized for ultra-low-cost manufacturing. All the engineering brilliance in India can’t change that.

There’s also the point that government bureaucracies and university engineering departments are not designed for or experienced in the mass production techniques that any of these “ultra-cheap but powerful” computing initiatives all require. Have you ever heard of a government that could keep their hands (and political priorities) out of the critical decision of where this wonder device would be assembled, tested, packed, and distributed? The “industrial policy” wonks would need to get intensely involved in such a decision and the location would have to meet diverse electoral and financial requirements (note that the economics of the project won’t even make the top five priorities in the process).

Awarding the contract to just one area would be unthinkable: the benefits must be seen to be helping areas that elected the current government and emphatically not going to opposition ridings. The horsetrading over that alone would consume any possible price advantage such a scheme might have over ordinary computers and software bought commercially.

July 15, 2010

Reasons not to get ansty over China’s growth

Filed under: China,Economics,USA — Tags: , , , , — Nicholas @ 10:02

The ever-sensible and highly entertaining Monty points out that Americans fretting over the growth of the Chinese economy are bothered over (comparatively) minor issues:

The angst over China’s economic ascent continues to smell rather strongly of the same panic the US felt over Japan in the 1980′s. I respond to this panic in two ways: 1) I am happy for the average Chinese citizen, who is finally seeing some benefit from their labor after 400 years of failure and ineptitude — they deserve any success that comes their way; and 2) America is in the enviable position of being able to worry about unlikely hypotheticals because we are the world’s largest economy and will continue to be so for much of the 21st century and perhaps beyond. We face severe problems — public spending being #1 among them — but our competitors also have problems, in many cases more dire than our own. We as a people have a habit of overestimating our own problems and underestimating those of our adversaries. Don’t begrudge the Chinese people some measure of success; just hope that they can cast off their Communist government and move towards being a freer people. There may come a time when the US and China square off as enemies rather than just competitors, but that outcome is not inevitable.

Fitch agrees with me about taking the whole “China is taking over the world” thing with a grain of salt. The Chinese are hiding an enormous amount of bad debt. If China hopes to succeed beyond their export-driven economy, their finances are going to have to become more transparent. And when/if this happens . . . look out below. That crash is going to make our little economic vacation of the past couple of years look mild in comparison.

I know that it may appear that I’m anti-Chinese based on some of my past economic postings, but that’s not true. I’m actually quite positive about China in the long term — once they manage to get rid of the last trappings of authoritarian government and overcome the huge dead hand of army-controlled crony capitalism. Most Chinese markets are not yet free, but they’re in most cases far more free than they were a decade ago. That’s wonderful, both for ordinary Chinese people and for the rest of the world. China has immense untapped resources of skills, talents, and ideas that can’t be accessed in a controlled economy. If-and-when their economy becomes as free as typical western markets, sit back and watch all that human ingenuity go to work.

On the down side, while China is becoming a bit more free, many western countries are becoming less so: piling on regulations and creating additional barriers to economic growth (Canada, for the most part, has not been doing this . . . it’s a significant factor in Canada’s escape from recession). If these trends continue, perhaps the worriers-about-China will see the Chinese economy vault into first place as the American government tries to control everything.

June 21, 2010

China’s latest currency move

Filed under: China,Economics,USA — Tags: , , , , — Nicholas @ 10:31

The always entertaining Monty has a few thoughts that are worth considering:

BNP Paribas forecasts parity (and below!) for the poor, unloved Euro. The Euro is like the easy girl in every town: popular enough when she was young and cute, but now that she’s looking like nine miles of bad road, no one wants to be seen with her or has a kind word to say about her.

After insisting for months that they weren’t keeping the Yuan artificially devalued via the dollar-peg, the Chinese lift the peg, shout Squirrel!, and run away.

Meanwhile, a floating Yuan may not work out quite the way the US thinks it will. This happens to be my view — I think the export-driven Chinese economy is a lot weaker than they’re letting on (or may even realize themselves), and they have severe internal economic problems that the authoritarian government has been papering over for years. There will be a huge banking crisis in China at some point when the huge numbers of bad loans come to light — they can’t hide them forever. Further, the recent labor troubles in China may be only the leading edge of a big wave.

Of course, if you’ve been following Quotulatiousness for any time, you’ll know that I’m fully in agreement with Monty about the Chinese economy. In the long term, I’m quite hopeful about China and their ongoing liberalization and modernization, but in the short- to medium-term I think there are many problems that need to be resolved and that will cause a great deal of upheaval and disturbance.

Remember that even with the best good will in the world, China’s economy is still moving painfully from state-run to private enterprise, and the most common stop on that road is crony capitalism (that’s like capitalism without the rule of law but with private armies). The good news is that a greater proportion of the economy is adjusting to free(r) markets, but there’s still lots of zombie corporate entities set up and run by various branches of the government . . . and the army.

In the latest move, the exchange rate change may not be the panacea that too many American politicians are hoping for:

China’s decision to move away from its currency peg might mean the yuan weakens against the dollar instead of strengthens as Washington wants, Nouriel Roubini, one of Wall Street’s most closely followed economists, said Saturday.

China said Saturday it would gradually make the yuan more flexible after pegging it to the dollar for nearly two years, a move that the U.S. government and others around the world have long been calling for.

It won’t fix the underlying trade issues, even if the yuan moves in the “desired” direction, as the problem is much more rooted in American policy than in Chinese currency rates. As long as the American government insists on increasing the debt load, piling on additional regulatory regimes, and directly interfering in corporate decisions, the longer the economy will be unsettled. Stability is a key condition for economic recovery, yet the American government demonstrates a knee-jerk reaction against stability for every opportunity that arises.

Oh, and if you think the US banking system has bad loan issues, wait for the other shoe to drop:

China’s banking regulator warned Tuesday that the nation’s banking system faces risks from bad loans, particularly among those made to local governments and to the real-estate sector.

In its 2009 annual report, the China Banking Regulatory Commission urged banks to use cause and scientific risk analysis in their lending, and warned of dangers to the sector, both from lending in the past year and from development in the future.

June 18, 2010

A “new chapter in U.S. history”

Filed under: China,Economics,Humour,USA — Tags: , , , , , — Nicholas @ 10:23

Ron Hart congratulates President Obama for delivering on his promised change:

We are so in debt to China that President Obama had to visit their president in his first year in office. It was an important meeting between the most powerful communist leader in the world and the president of China.

Obama is so popular in China that a nightclub named after him opened in Beijing. In keeping with the Obama theme, the club opened with $10 trillion in debt. It will, hopefully, close in just four years with $15 trillion in debt and no apologies to its “hope-based” investors.

[. . .]

To sum up our situation just short of two years into this Obamanation of an administration: Our debt is much higher, an unwanted ObamaCare bill that will cost us at least $2 trillion more than predicted was rammed through Congress, more troops are in Afghanistan, unemployment is much higher even after a union handout “stimulus” bill, and the biggest tax increase in American history is coming in 2011. So yes, Mr. President, technically I guess you can say you have brought about “change.”

As for your assertion, Mr. Obama, that you are going to usher in a “new chapter in U.S. history,” it looks like you will make good on that too. Unfortunately, it will be Chapter 11.

H/T to Jon, my former virtual landlord.

June 4, 2010

Detroit has no monopoly on post-apocalyptic urban scenery

Filed under: Asia,China,History,Japan — Tags: , , — Nicholas @ 21:56

For example, check the images from Battleship Island (Gunkanjima) in Japan:

What’s now decay and rot once was bright and brilliantly full of hope: Who lived here? What were their lives like? What happened? How did it all come apart? How did it all crumble to almost nothing?

In the case of Hashima Island, or Battleship Island (Gunkanjima in Japanese) as it’s often called, hope and optimism became dust and decay because one black resource (coal) was replaced by a cheaper black resource (oil). Populated first in 1887, the island — which is 15 kilometers from Nagasaki — only began to really, and phenomenally, become populated much later, in 1959.

Even the nickname “Battleship Island” has a bit of history behind it.

H/T to Ace of Spades for the original link.

April 15, 2010

QotD: Chinese espionage in Canada

Filed under: Cancon,China,Economics — Tags: , , — Nicholas @ 12:39

China’s not buying our oil; it’s buying the reliable flow of Canadian corporate profits and our stable economic outlook.

Is it a national security risk to Canada?

No, again. It is true that, according to CSIS, the Chinese government represents the largest espionage threat to Canada, stealing the equivalent of $1-billion a month from our country in industrial secrets. (That’s more than our annual exports to China.)

But that espionage is done illegally by Chinese students, expats and other sympathizers, not through the legal ownership of share certificates. No doubt our high-tech energy secrets are being stolen and will continue to be stolen, but that is not happening because of a Wall Street deal. The central strategic value of the oil sands is not at risk.

Ezra Levant, “Pipeline to Asia”, National Post, 2010-04-15

Uninhabited islands could be flashpoint in Sino-Japanese conflict

Filed under: China,Japan,Military — Tags: , — Nicholas @ 07:35

A group of uninhabited islands south of Okinawa have the potential to increase tensions between China and Japan. The Senkaku island group is subject to overlapping claims from China, Taiwan, and Japan:

Japan reports that, for the third time in the past 18 months, Chinese warships have been spotted south of the Japanese Island of Okinawa. This time, it was two Chinese submarines, running on the surface. That had never been seen before, in the area near the Senkaku islands (which are claimed by China, Taiwan and Japan). The Senkakus are eight uninhabited islands, which in the past were only used occasionally by fishermen. The Senkakus are 220 kilometers from Taiwan, 360 kilometers from China and 360 kilometers from Okinawa (which is part of Japan).

[. . .]

Five years ago, a Chinese oil drilling platform, in disputed waters halfway between China and the Japanese island of Okinawa, began producing natural gas, despite ongoing negotiations over who owns what in that patch of ocean. The Chinese spent two years building that platform, in waters claimed by Japan. A second platform was later built, as well as an underwater oil pipeline for both platforms. China regularly sends groups of warships to patrol the area, to underline their belief that this bit of water is under Chinese control. Japan would probably win any naval war with China, but since China has nuclear weapons, and Japan does not (at least not right now), such a war could go seriously against Japan. This has been brought up in Japan before, and it is feared that the issue may lead to Japan secretly, or openly, building nuclear weapons (which it could certainly do, and quite quickly.)

I’m certainly hoping that this is just speculation on the part of Strategy Page (the bit about nuclear weapons), as territorial disputes over islands do have a way of getting out of hand (see Falkland Islands, for example).

March 25, 2010

Another tidbit on military reform in China

Filed under: China,Military — Tags: , , , — Nicholas @ 08:50

In an article briefly discussing the not-widely-reported unrest in ethnic Uighur regions, a mention of some progress in reducing corruption in China’s military hierarchy:

There’s a lot of corruption remaining in the military as well. For over a decade, the government has worked to eliminate the worst of the theft and moonlighting. The most outrageous examples of this have been curbed. Thus military officers no longer use cash from the defense budget to set up weapons factories they run and profit from. Big chunks of procurement cash no longer disappear into the offshore bank accounts of generals and admirals. But there’s still a lot of corruption. Much is still for sale, like promotions. Lower ranking officers and NCOs can still be found selling weapons and equipment that is reported “destroyed” or “mission.” Commanders who are not doing so well, can pay to have reports of their performance upgraded. Senior government officials still have doubts about how effective the military would be in another war. It was noted, usually by journalists, that the army response to several recent national disasters (which usually employ troops for disaster relief) had problems. This is not supposed to be reported, but the journalists discuss it among themselves, and some of this knowledge gets onto the Internet and outside the country. People love to gossip, especially in a police state like China.

In response to the corruption, and uncertainly about how the military reform (and modernization) program is going, this year’s defense budget only went up 7.5 percent. For over a decade, the annual increases were in the double digits. But another reason for the stall is the impact of the worldwide recession. While the Chinese economy continued to grow, the rate was less.

The usual caveats apply about any official statistics used in discussions about China: if you’ve somehow managed to avoid seeing ‘em before, there’s a roundup here.

March 23, 2010

Another sign of modernization or just window-dressing?

Filed under: China,Military — Tags: , , — Nicholas @ 07:45

China has been actively modernizing their military forces for the last couple of years, including not only new designs in equipment, but also doctrinal changes in how those forces go about doing their jobs. The generals seem to have finally decided that moving away from the Mao-era massed infantry is necessary, as Korean War tactics won’t prevail against an opponent with modern equipment. A minor name change is a way-marker for all the other military changes happening:

Without any fanfare, China has changed the names of its armed forces. Gone are the PLA (Peoples Liberation Army) prefix for the navy (PLAN) and air force (PLAAF). It’s now just the Chinese Army, Chinese Navy and Chinese Air Force. Since there was no official announcement, there was no explanation for why the old PLA prefix was dropped. The PLA was the original armed forces, founded in 1927, of the Chinese Communist Party. This force was initially known as the Chinese Red Army. After World War II, the PLA name was formally adopted for all the armed communist armed forces.

If nothing else, it will make future reports on the Chinese military sound less like propaganda reels from the 1950s.

March 17, 2010

Superbubble?

Filed under: China,Economics,Politics,USA — Tags: , — Nicholas @ 12:14

Jon, my former virtual landlord, sent me this link, suggesting that it “gives you an opportunity to round up all of your ‘as I said about China earlier…’ [posts]“.

The world looks at China with envy. China’s economy grew 8.7 percent last year, while the world economy contracted by 2.2 percent. It seems that Chinese “Confucian capitalism” — a market economy powered by 1.3 billion people and guided by an authoritarian regime that can pull levers at will — is superior to our touchy-feely democracy and capitalism. But the grass on China’s side of the fence is not as green as it appears.

In fact, China’s defiance of the global recession is not a miracle — it’s a superbubble. When it deflates, it will spell big trouble for all of us.

I don’t want to give the impression that I’m anti-Chinese, because that isn’t why I post this sort of material. I think the Chinese miracle has been to raise literally hundreds of millions out of poverty, but it hasn’t been a purely positive thing: hundreds of millions of others are supporting the uplift but being deprived of similar opportunities. It’s a fantastic achievement, but it has involved — and continues to involve — injustice and repression.

It also requires continued state control over media, and not just BBC/CBC/PBS type state funding, but actual state censorship and worse:

During the crisis, Chinese exports were down more than 25 percent, tonnage of goods shipped through railroads was down by double digits, and electricity use plummeted.

Yet Beijing insisted that China had magically sustained 6 to 8 percent growth.

China lies. It goes to great lengths to maintain appearances, including censoring media and jailing those who write antigovernment articles. That’s why we have to rely on hard data instead.

Those lies will compound the impact when the lies can’t be maintained any more:

What happens in China doesn’t stay in China. A meltdown there — or even a slowdown — would have severe consequences for the rest of the world.

It will tank the commodity markets. Demand for industrial goods will fall off the cliff. Finally, Chinese appetite for our fine currency will diminish, driving the dollar lower against the renminbi and boosting our interest rates higher. No more 5 percent mortgages and 6 percent car loans.

It will be bad for the US and the rest of the world’s economies, but it could well be catastrophic (in the full meaning of that word) for China. As the US economy contracted over the last couple of years, it revealed lots of malinvestments . . . and the companies which were most exposed to the risks took huge hits to their balance sheets and their business models. A similar shock to the Chinese economy could topple the government or raise the already-high chances of massive unrest and corresponding increased repression.

Interesting times, indeed.

As Jon suggested, you can see my previous concerns about the Chinese economy here.

March 16, 2010

That Red Dragon may be paper after all

Filed under: China,Economics,Military — Tags: , , — Nicholas @ 07:45

Strategy Page makes a case for the recent military spending and increased media attention being paid to it being highly misleading:

Over the next few years, you’ll be seeing a lot media attention paid to China’s growing military might. China’s ever increasing spending on modern weapons and military equipment gives the illusion of growing military power. It is very much an illusion. The 2.3 million troops in the Chinese armed forces are poorly trained and led. China has a long history of corruption and rot in the military during long periods of peace. The last time the Chinese military has been in action was 1979 (when they attacked Vietnam, and got beaten up pretty bad). [. . .]

American sailors are constantly exposed to examples of the poor training and leadership in the Chinese navy, whenever they encounter Chinese warships at sea. Foreigners living in China, and speaking Chinese, can pick up lots of anecdotes about the ineptitude and corruption found in the military. It’s all rather taken for granted. But in wartime, this sort of thing would mean enormous problems for the troops, when they attempted to fight better trained and led troops.

You don’t see much in the media about the poor training of Chinese troops, pilots and ship crews. You don’t hear much about the poor leadership and low readiness for combat. But all of this is common knowledge in China. There, the military is not walled off from everyone else. Cell phone cameras and the Internet make it easy to pass around evidence (often in the form of “hey, this one is hilarious”). The government tries to play up how modern and efficient the military is, but most Chinese know better, and don’t really care. China is winning victories on the economic front, and that what really counts to the average Chinese.

According to this analysis, the key role of the Chinese military is actually as a tool in American politics, specifically filling the role once occupied by the mighty Soviet armed forces. The Chinese are portrayed as being the reason for maintaining or increasing US military spending, which must work well enough, for aside from the required money to keep troops on active duty in Iraq and Afghanistan, the government still provides additional funds for this purpose.

The basic weapon for this sort of thing is FUD (Fear, Uncertainty and Doubt). Works every time, although it is difficult to pitch the Chinese navy as a crack force. Most of their ships are elderly, poorly designed and rarely used. Their nuclear subs are worse than the first generation of Russian nukes back in the 1960s. The most modern Chinese ships are Russian made, Cold War era models. Chinese ships don’t go to sea much, not just because it’s expensive, but because Chinese ships tend to get involved in nasty incidents. Like the submarine that killed its crew when the boat submerged (and the diesel engines did not shut down when the batteries kicked in, thus using up all the oxygen.) Breakdowns are more common, as well as a lot of accidents you don’t hear about (weapons and equipment malfunctions that kill and maim.)

Given my skepticism about the Chinese economy (see here for example), I’m somewhat inclined to agree with the author of this article about the Chinese military.

March 3, 2010

Exact terminology aids understanding

Filed under: China,Economics,Technology — Tags: , , , — Nicholas @ 08:40

Apple Computer has been accused of exploiting child labour, indirectly, in factories that make iPods and iPhones. This is a serious charge, and the moral outrage it provokes is understandable. It evokes images of Victorian factories (those “satanic mills”), with children as young as seven or eight being starved and abused in horrific conditions.

However, the term “child labour” isn’t particularly exact, as Whit points out:

What I found most interesting was the “child” part — when I was 15 I would have slugged anyone who called me a child. During the summer of my 15th year, I was working in our metal stamping plant where the highest temperature reached 103 F (40 C). I had my first factory job when I was 14 turning wheels on a lathe. My Father never read child-labor laws, and thank God for that. It was an invaluable experience that I am sad to say I won’t be able to give to my son.

I can remember in 1998 visiting a factory for a major automotive supplier in Taiwan. There were 14 year old boys working on the lines making seat belt assemblies. I asked about it and found that they were students at the local technical school. They worked half a shift on the line and spent the rest of the day in class studying engineering. Today, 12 years later, they would be around 26 with degrees in mechanical engineering and over a decade of hands-on experience. I imagine some of them are running plants in China now.

So, there are the imagined children in a Dickensian hell, and there are teenagers (“young adults” in some situations) doing co-op terms in factories. Remember that our ideas about appropriate ages to leave school and work in factories or on farms have changed dramatically over the last two generations. Our grandparents wouldn’t have batted an eye at 14-year-olds working in factories. For most of their contemporaries, the concept of “teenage years” just didn’t have any particular cultural meaning. You were a child, you went to school, then you left school and got a job.

Even 60 years ago, however, they would have objected to under-12′s working away from home (but not on the family farm . . . farming families still looked at kids as extra working hands).

I understand that Apple is worried about its image, and I acknowledge that those eleven 15 year olds may not have wanted to be there. But there is a big difference between a 15 year old farm kid fibbing about his age to get a good factory job to help support his family and using 6 year old slave labor in an illegal fireworks factory in Sichuan. It would be nice if the amazingly flexible English language had a concise way of stating the difference. I think “under-aged labor” is more reflective of the reality of the situation.

It’s also not to excuse bad employers or condone involuntary labour (permitted in some developing countries).

February 8, 2010

Further skepticism warranted

Filed under: China,India,Military — Tags: , , — Nicholas @ 09:28

If, as I believe, China’s official economic statistics are not to be depended upon, even more skepticism is required whenever the topic of military spending is discussed:

In Asia, China is increasing its lead in defense spending. China does not release accurate data on defense spending (a common trait in all communist nations), but admits that its defense spending has doubled in the last decade. Current Chinese defense spending is believed to be $90 billion a year. That’s nearly ten times the $9.2 billion Taiwan spends. China spends twice what Japan does, and more than three times South Koreas’ $24 billion. Tiny Singapore spends nearly $6 billion a year, and has one of the most effective, man-for-man, forces in the region. India, which is increasingly becoming a military rival of China, spends about $30 billion a year. Australia spends about $24 billion a year. All the other nations in the region spend relatively small amounts, barely enough to keep threadbare forces fed and minimally equipped. China’s only allies in the region; North Korea and Pakistan, together spend less than $5 billion a year on defense.

China increased its defense spending 14.9 percent last year. That’s down from the 17.9 percent jump in 2008. China claims that its defense spending is only 1.4 percent of GDP (compared to 4 percent for the U.S. and 1-2 percent for most other Western nations.) But China keeps a lot of defense spending off the official defense budget, and actual spending is closer to three percent of GDP. Currently, the U.S. has a GDP of $13.8 trillion, Japan $4.4 trillion and China, $3.5 trillion.

February 5, 2010

China ramps up submarine activity

Filed under: China,Japan,Military — Tags: , , , — Nicholas @ 12:39

Strategy Page reports on increased activity around China’s maritime periphery:

Recently, the Taiwanese Navy detected an unidentified submarine outside one of its major naval bases. Ships and helicopters pursued the contact, but the suspected submarine left the area. A Chinese boat was suspected, mainly because for the last decade, Chinese subs have increasingly been showing up close to Japan and South Korea as well.

[. . .]

Chinese Song class diesel electric and Han class nuclear powered boats have been detected and tracked with increasing frequency over the last few years. In that time, one of each of these was spotted stalking the American carrier USS George Washington, as it headed to South Korea for a visit.

China is rapidly acquiring advanced submarine building capabilities, and providing money (for fuel and spare parts) to send its subs to sea more often. Moreover, new classes of boats are constantly appearing. The new Type 39A, or Yuan class, looks just like the Russian Kilo class. In the late 1990s, the Chinese began ordering Russian Kilo class subs, then one of the latest diesel-electric design available. Russia was selling new Kilos for about $200 million each, which is about half the price other Western nations sell similar boats for. The Kilos weigh 2,300 tons (surface displacement), have six torpedo tubes and a crew of 57. They are quiet, and can travel about 700 kilometers under water at a quiet speed of about five kilometers an hour. Kilos carry 18 torpedoes or SS-N-27 anti-ship missiles (with a range of 300 kilometers and launched underwater from the torpedo tubes.) The combination of quietness and cruise missiles makes Kilo very dangerous to American carriers. North Korea and Iran have also bought Kilos.

Older Posts »
« « Crying “Wolf!” about China| Amtrak’s odd pricing policies » »

Powered by WordPress