China has sent five warships to the disputed Scarborough Shoal off the west coast of the Philippines with the warning that Beijing is ready for “any escalation” of the conflict.

That comes as the outgunned Philippines looks to the United States for naval support in South China Sea territory that may be rich in energy sources.

The five warships are said to be among the most advanced vessels in the Chinese fleet.

They include ships with state-of-the- art systems against attack from the sky, while one is an assault ship that carries 20 amphibious tanks and specialized fighting teams among 800 personnel.

Japanese surveillance aircraft saw the flotilla west of Okinawa and sailing south on Sunday.

Without American support, the Philippine navy is completely out-classed by the PLAN (aside from a large number of in-shore patrol craft, there are only 14 combat-capable ships). And it’s not clear that the US will want to escalate tension at this moment, especially over something like the Scarborough Shoal.

H/T to David Akin for the link.

The British Ministry of Defense has admitted, for the first time, that it is under heavy attack by hackers. It was also revealed that some of these attacks had succeeded. The good news is that the military is becoming more aggressive and imaginative in dealing with Cyber War defense. China was not directly accused of being behind any of these attacks, but it was mentioned that there are now discussions underway with the Chinese on the matter. All this is an old problem.

Last year, Britain went public to report a higher number of Internet based attacks. The report noted that the emphasis was now on economic assets. This included technology and business plans. For example, the Foreign and Commonwealth Office was under heavy cyber-attack for several months, apparently in an effort to obtain secret details of government plans and techniques for supporting British exports. Government Internet security officials were making all this public to encourage British firms to increase their Internet security.

All this was nothing new. Two years ago Britain’s domestic intelligence service, MI5, went public with numerous charges of Chinese Internet based espionage. MI5 accused China of using both agents and hacker software, to obtain secrets from specific companies and government organizations. This approach had Chinese personnel approaching specific British businessmen at trade shows, and offering gifts, like a thumb drive loaded with hidden hacker software that will load itself on to the victim’s PC and seek out valuable information. Internet based attacks, traced back to China, continue to send real looking email that has an attachment containing another of those stealthy hacker programs that seek out secrets, or even quietly take over the user’s PC. Three years ago, MI-5 sent alerts to major corporations warning them of similar attacks and advising increased security of their data.

Today’s most important population trend is falling birthrates. The world’s total fertility rate — the number of children the average woman will bear over her lifetime — has dropped to 2.6 today from 4.9 in 1960. Half of the people in the world live in countries where the fertility rate is below what demographers reckon is the replacement level of 2.1, and are thus in shrinking societies.

[. . .]

As Eberstadt points out, we can make predictions about the next 20 years with reasonable accuracy. The U.S.’s traditional allies in western Europe and Japan will have less weight in the world. Already the median age in western Europe is higher than that of the U.S.’s oldest state: Florida. That median age is rising 1.5 days every week. Japan had only 40 percent as many births in 2007 as it had in 1947.

These countries will have smaller workforces, lower savings rates and higher government debt as a result of their aging. They will probably lose dynamism, as well.

[. . .]

The Census Bureau predicts that China’s population will peak in 2026, just 14 years from now. Its labor force will shrink, and its over-65 population will more than double over the next 20 years, from 115 million to 240 million. It will age very rapidly. Only Japan has aged faster — and Japan had the great advantage of growing rich before it grew old. By 2030, China will have a slightly higher proportion of the population that is elderly than western Europe does today — and western Europe, recall, has a higher median age than Florida.

H/T to Jon, my former virtual landlord, for the link.

Earlier on Thursday a Philippine coastguard vessel arrived in the area, known as the Scarborough Shoal.

The Philippines also says China has sent a third ship to the scene.

The Philippine foreign minister said negotiations with China would continue. Both claim the shoal off the Philippines’ north-west coast.

The Philippines said its warship found eight Chinese fishing vessels at the shoal when it was patrolling the area on Sunday.

The BBC article doesn’t name the Philippine ship, but it’s likely to be the BRP Gregorio del Pilar (formerly the USCGC Hamilton):

Photo from Wikipedia

China’s view of its borders in the South China Sea clashes wildly with those of its neighbours and the international community:

In a statement, the Philippines said that its navy boarded the Chinese fishing vessels on Tuesday and found a large amount of illegally-caught fish and coral.

Two Chinese surveillance ships then apparently arrived in the area, placing themselves between the warship and the fishing vessels, preventing the navy from making arrests.

The Philippines summoned Chinese ambassador Ma Keqing on Wednesday to lodge a protest over the incident. However, China maintained it had sovereign rights over the area and asked that the Philippine warship leave the waters.

The senior leadership of the Chinese government increasingly views the competition between the United States and China as a zero-sum game, with China the likely long-range winner if the American economy and domestic political system continue to stumble, according to an influential Chinese policy analyst.

China views the United States as a declining power, but at the same time believes that Washington is trying to fight back to undermine, and even disrupt, the economic and military growth that point to China’s becoming the world’s most powerful country, according to the analyst, Wang Jisi, the co-author of “Addressing U.S.-China Strategic Distrust,” a monograph published this week by the Brookings Institution in Washington and the Institute for International and Strategic Studies at Peking University.

[. . .]

The United States is no longer seen as “that awesome, nor is it trustworthy, and its example to the world and admonitions to China should therefore be much discounted,” Mr. Wang writes of the general view of China’s leadership.

In contrast, China has mounting self-confidence in its own economic and military strides, particularly the closing power gap since the start of the Iraq war. In 2003, he argues, America’s gross domestic product was eight times as large as China’s, but today it is less than three times larger.

[. . .]

Mr. Wang writes that the Chinese leadership, backed by the domestic news media and the education system, believes that China’s turn in the world has arrived, and that it is the United States that is “on the wrong side of history.” The period of “keeping a low profile,” a dictum coined by the Chinese leader Deng Xiaoping in 1989, and continued until now by the departing president, Hu Jintao, is over, Mr. Wang warns.

“It is now a question of how many years, rather than how many decades, before China replaces the United States as the largest economy in the world,” he adds.

Like sweatshop workers in China and elsewhere, Foxconn employees endure long hours, low pay and dangerous working environments, but do so because there is no better alternative. In fact, jobs in sweatshops (and Foxconn factories) tend to be massively in demand, because the alternative is worse. It’s not uncommon for a new employee’s first action being to sign up their relatives to the waiting list for new job openings.

It’s easy to recoil from seen evils, while ignoring unseen alternatives that are even worse. No one in the West will ever have to put up with such bad conditions.

If wages and conditions in Apple’s hometown of Cupertino, CA, were as bad, nobody would work there. That people do so in China is because they have no better alternative. China’s economy is growing quickly, but much of it is still grindingly poor, and difficult to do business in. It’s poverty that makes China’s factories such unpleasant places to work in.

[. . .]

It’s no surprise that China is still very poor compared to neighbouring countries like Japan, South Korea, Taiwan and Singapore. Forty years of brutal socialism under Mao’s Communist state halted China’s development, and decimated institutions crucial for wealth creation, like strong civil society and the rule of law.

The exception, of course, is Hong Kong, where conditions and wages are much better than on mainland China — not because of a bigger government, but because of greater wealth caused by freer markets.

What exactly happened on the day Wang Lijun fled to the U.S. Consulate is not yet clear; but speculation and comments abound on China’s Internet. U.S. officials are also leaking information about what happened, and a congressional investigation into the affair has been promised.

Wang is the former vice-mayor and chief of police of the southwestern China megapolis of Chongqing City, and was the right-hand man of Bo Xilai, the city’s Communist Party chief who is known as an ultra-leftist hardliner, and who has been wrangling to win a position on the Standing Committee of the Politburo, the group of nine men who stand at the top of the Party’s hierarchy.

Wang was unexpectedly demoted on Feb. 2 from his posts and reassigned to handle “culture, education, and environmental protection.” On Feb. 5 he talked about the importance of his new job responsibilities at Chongqing Normal University and elsewhere. No one suspected that he would flee to the U.S. Consulate in Chengdu the next day.

[. . .]

While what exactly happened in the consulate in Chengdu cannot be confirmed, Bill Gertz of the Washington Free Beacon, citing an unnamed U.S. official, has reported that the Obama administration denied Wang Lijun asylum for fear of upsetting the Chinese regime.

U.S. Congressman Dana Rohrbacher (R-CA), chairman of the House Foreign Affairs subcommittee on oversight and investigations, has promised his subcommittee will investigate the handling of Wang’s case, Gertz also reports.

The old-timers in the press gallery know how to defuse an announcement like this. We dust a toolkit from the early Chrétien days off. A Canadian prime minister shows up in a fancy Beijing ballroom with a bunch of business executives wielding Montblanc pens. A big number is being tossed around — say, “$3 billion.” But if we subtract the deals that would have happened anyway, and then subtract the deals that aren’t really deals — then we can wear that number down to some innocuous nub.

But while individual elements of Stephen Harper’s signing ceremony Thursday night in a fancy Beijing ballroom may not pan out, at some point the weight of evidence starts to suggest something real is going on. The evidence at hand comes, not just from Canadian sources, but from Chinese.

The first source of the morning was the semi-official English-language China Daily, which reserves real excitement for vice-premier Xi Jingping’s upcoming trip to the United States but which has been respectful, and a little more than that, toward Stephen Harper all week.

Later in the day came Harper’s bilateral meeting with Hu Jintao. Here, no trace of scolding for time spent posturing in the early years of Harper’s term as prime minister. Now, Hu said, “Mr. Prime Minister, you put a lot of value on Canada’s relationship with China and are strongly committed to promoting the practical cooperation between our two countries. I appreciate your efforts.” Translation: You’re out of the doghouse. Come here, ya big lug.

Update: David Akin contrasts the glowing reviews Harper is getting in the Chinese press this time with his 2009 visit:

I’ve travelled to a lot of spots around the world covering Prime Minister Stephen Harper’s international travels and I cannot recall him ever generating the kind of positive press he’s getting in this morning’s China Daily, the English-language state-run daily newspaper here.

A picture of Harper chatting with Chinese chess players during a visit Wednesday to the Temple of Heaven is the front-page top-of-the-fold main art here with a generally positive article about the two countries improving trade relationship. Inside, there’s two other pieces involving Canada and Harper.

[. . .]

Read between the lines here and China’s government is approvingly showing Canada’s prime minister to be a decent, pious individual deserving of China’s friendship and support.

That’s a sharp contrast to the China Daily‘s coverage of Harper’s 2009 visit. There was front-page coverage then too — of how Premier Wen dressed down Harper for letting the China-Canada relationship languish. The narrative in 2009 was that the Canadian prime minister was a wayward supplicant coming to China to seek forgiveness for his sins. Not this time: He is being profiled in the press as the leader “of a strong delegation of five ministers and 40 business leaders” who, along with Wen, witnessd “the signing of nine deals.” The reader of the China Daily on this Harper visit is meant to be impressed.

Timber company Sino-Forest is locked in a fascinating battle for survival against Carson Block, a stock analyst with a mixed record of publicity attacks on Chinese-based enterprises. With professional analysts reluctant to say what they make of Block’s “strong sell” report on Sino-Forest, I’m in no position to endorse it as a piece of financial advice or investigative journalism. Considered strictly as entertainment, however, the report is remarkable.

Block has documented that Sino-Forest operates with extraordinary opacity for a company whose holdings are surely very widely distributed — particularly, one assumes, within Canada. Sino-Forest claims to be doing hundreds of millions of dollars’ worth of sales through mostly unidentified “authorized intermediaries” in China — traders who are apparently happy to let the company buy title to trees, hold them as they appreciate, take on the bulk of the costs and risks in the meantime, and then snap up revenues when the trees are eventually converted into wood products. Block, having poked around a bit in the literal Chinese backwoods, questions whether much if any of the reported underlying activity is happening.

[. . .]

Sino-Forest is refusing, despite intense pressure, to make a full disclosure of the identities of the “authorized intermediaries” who are making its money. The company claims that to do so would put it at a competitive disadvantage, which makes one wonder why its business model ought to depend so heavily on sheer obscurity. One possible answer is that Sino-Forest’s real, fundamental business is some sort of cryptic regulatory arbitrage; that seems like a game potentially worth playing with paper assets in places that have a strong rule of law, but it is surely a dangerous one in a nominally Communist country, where a nationalization could be arranged in the space of an afternoon. (Or where some regional Party functionary could simply be bribed to “lose” crucial paperwork.)

Today, he posted a follow-up report:

Could a curious investor look at actual maps of timber controlled by Sino-Forest agents, you ask? Well, you see, it’s not exactly kosher for foreigners to carry around maps of remote parts of China. You can borrow them from forestry officials if you really need to. Will the local forestry bureaus confirm Sino-Forest’s claims about plantations operated by its agents? Well, sometimes they’ll give you a certificate of sorts, for all the good it might do. “The confirmations are not title documents, in the Western sense of that term,” the committee report notes. (As I understand it, the Western meaning of “title document” is that it gives one an unquestioned, justiciable claim to ownership of something, whether the Party or the Army or the good Lord in heaven approve or not.)

[. . .]

The impression given is that you need influential “backers” to do business in China. The question for the Western investor, though it’s probably now moot, is whether the real role of these backers is to help exploit Chinese resources for the benefit of the Western shareholders or to help fleece Western shareholders for the benefit of Chinese suppliers and bureaucrats.

As Jon, my former virtual landlord puts it, this is a hobby horse I like to ride now and again.

In fall 2009, I sat in a large auditorium festooned with red banners and watched as Robin Li, CEO of Baidu, China’s dominant search engine, paraded onstage with executives from 19 other companies to receive the “China Internet Self-Discipline Award.” Officials from the quasi-governmental Internet Society of China praised them for fostering “harmonious and healthy Internet development.” In the Chinese regulatory context, “healthy” is a euphemism for “porn-free” and “crime-free.” “Harmonious” implies prevention of activity that would provoke social or political disharmony.

China’s censorship system is complex and multilayered. The outer layer is generally known as the “great firewall” of China, through which hundreds of thousands of websites are blocked from view on the Chinese Internet. What this system means in practice is that when one goes online from an ordinary commercial Internet connection inside China and tries to visit a website such as hrw.org, the website belonging to Human Rights Watch, the web browser shows an error message saying, “This page cannot be found.” This blocking is easily accomplished because the global Internet connects to the Chinese Internet through only eight “gateways,” which are easily “filtered.” At each gateway, as well as among all the different Internet service providers within China, Internet routers — the devices that move the data back and forth between different computer networks — are all configured to block long lists of website addresses and politically sensitive keywords.

These blocks can be circumvented by people who know how to use anti-censorship software tools. It is impossible to conduct accurate usage surveys, but it is believed likely that hundreds of thousands of Chinese Internet users deploy these tools to access Twitter and Facebook every day. Yet researchers estimate that out of China’s 500 million Internet users, only about 1% or so (a number somewhere in the single-digit millions — still a large number of people but not enough percentage-wise to shape majority public opinion) use these tools to get around censorship, either because most do not know how or because they lack sufficient interest in, or awareness of, what exists on the other side of the “great firewall.”