Growing Internal Instability: Will China Divert Externally?

China's historic shift from centrally planned to market economy has made it the manufacturing centre of the world. This has however come at the cost of a widening development gap between urban and rural areas and between coastal regions and inland/frontier areas. Many people in China have also lost the assurance of a lifetime job and the social safety-nets that they enjoyed a generation ago. Opening the economy, creating new labour-market mechanisms, and encouraging internal-migration flows have also impacted on China’s peripheral regions such as Xinjiang, TAR and elsewhere. Impact of Global Recession As the Chinese economy is closely integrated with the global economy, it cannot be insulated from global recessionary trends. Today, close to 40 per cent of Chinese GDP comes from exports and it is this segment which has been hit hardest by global recession. Lack of domestic demand for goods being exported has perforce led to a cutback in production which has further translated into job losses. China already had a huge unemployment problem with 120 million unemployed on a continuous basis. To this has now been added an additional 20 million newly unemployed due to the global financial crisis and its resulting closed factories. Add another 6 million new graduates into the work force (2008-2009) and we get a sense of the magnitude of the problem China is faced with. To combat recession, China has relied mainly on the Monetary Expansion route to tackle the economic crisis. Two major measures undertaken in this regard are: - • RMB 4 trillion (USD 585 billion) has been pumped into the economy in a stimulus package, to be deployed over two years in a bid to stimulate demand within the Chinese economy. • RMB 5 trillion (USD 731 billion) worth of loans given by Chinese state owned banks to people and to businesses both large and small. Impact of Chinese Monetary Policy The stimulus package makes the Chinese economy look bullish as so much money has been spent in just 6 months. All analysts are therefore saying that China is booming again. This however may not be true as the effects of the stimulus package are at best temporary. Sooner or later market fundamentals will come into play and then we will see a different picture emerge. Some facts which need to be considered are: - • Loans given by state owned banks have been utilised by many borrowers in stock trading investment. An amount in excess of $170 billion has gone into the stock market with a staggering 480,000 share trading accounts being opened by the week ending 20 February. • In addition, the Chinese government is giving a 5 per cent grant to every person buying a car and a 20 per cent grant to anyone buying an electronic product; such subsidies are not sustainable. • China saw a Net Capital flight of $240 billion in Q4 2008. This, in conjunction with the data on bank lending indicates that the communist regime in Beijing is having major problems in handling China's economy. What explains the positive numbers presently coming out of China is only the impact of the stimulus package. While this will cause a temporary rise in the rate of GDP growth for the current quarter, it would be wrong to annualise it. Perhaps the quarter ending June 2009 was the last good quarter and the downslide may very well start now. There is so much money floating around (Close to $800 billion with ordinary people, with an additional over $170 billion having gone into the stock market), that China will soon have a huge inflation problem unless they tighten up their monetary policy and suck the liquidity out of the system before they lose all control over prices. If they lose control over prices and if they have runaway inflation in the middle of the winter (October 2009 - March 2010) then it could create huge law and order problems all over China. The Oil Factor Oil data coming out of China looks bullish. Demand has increased from a low of 6.07 mbpd in January 2009 to 7.7 mbpd in May 09. This huge increase of 1.6 Mbpd has not been used for Chinese Phase I strategic storage, which at 102 million bbls was declared totally full in Q4 2008. Also, Phase II of Chinese strategic storage at 170 million bbls has not yet been built. This indicates that the oil has actually been run in the two new Chinese refineries. Further, if stock building has taken place, it has been on the products side in commercial and other storage downstream of the refineries. The question to be asked now is this: Why has Chinese oil demand increased from a low of 6.07 Mbpd in Jan 09 to 7.7 Mbpd in May 2009? The world oil prices by current indicators are not going to witness an upward spiral in the short term so obviously this increase in demand has not been generated due to an anticipated surge in world oil prices. So, if rising refinery runs in China in the midst of growing financial chaos are not indicative of the Chinese economy bottoming out, what is the diesel, gasoline and jet fuel produced in the refineries being used for? Is stocking taking place for an anticipated military operation? Prognosis The Chinese export-led market economy has taken a hit due to worldwide recession. As world markets are unlikely to stabilise in the short term, the spectre of massive unemployment due to loss of exports will only tend to further exacerbate the situation. Bank investments going into the stock market and large cash outflows will lead to inflationary pressures which are likely to come to the fore before the end of the year. Massive unemployment coupled with rising inflation is likely to cause serious disturbances initially in the coastal region and subsequently in other parts of the country. We can hence summarise the current internal situation in China as one being fraught with grave risks. We may yet see a repeat of Tiananmen Square protests of 1989 with the difference that the fires may not be so easy to quench this time. And this is likely to further inflame the fires of Lhasa and Urumqi. What may happen there is still an open question, but would need a careful watch. We also need to keep a very close watch on the oil consumption pattern in China. The reason for rising oil refinery runs in the midst of global recession need to be determined as the possibility that the oil in question is being used to build up resources for a military conflict cannot be ruled out. China’s communist regime, anticipating worsening of the economic crisis leading to widespread riots in the coastal region may spark off a military adventure somewhere to retain its hold on the levers of power and deflect attention from its internal crises. While a major military conflict over the Himalayas is not something which will benefit China, a limited incursion in its contested areas may well be on the cards. Or is the contest likely to take place on the high seas? Time will tell, but it would be wise to be prepared.

Allah or Christ. (Response to a chain email)

Sometimes, people spew venom and fabricate falsehood in the name of God. The instant chain email which is circulating around the globe is an excellent example of how some persons with a ‘holier than thou’ attitude are giving vent to their repressed fears through presentation of falsehood.

I count myself as one who is firmly against terrorism and the Islamic variety which is present is especially repugnant. But it is no more repugnant than the killings which have taken place over the centuries in the name of God or otherwise. A quick recap of some of horrific killings and murders of the last century is given below, and we have not counted Hiroshima and Nagasaki!

· Communist Russia. 20 million.

· Communist China 70 million.

· Japan (WW II) 12 million Chinese civilians.

· Idi Amin 300,000.

· Khmer Rouge (Cambodia) 1.5 million out of a population of 7.1 million.

· Rwanda (Hutu & Tutsi) 1 million (20% of the population)

· Darfur 800,000. (This century)

Now if we tally all the killings by all the Muslim terrorists, it won’t notch up to any of the figures above, Jihad or no Jihad.

The email in question originated in the United States (NOT Britain) by Rick Mathes, of the Mission Gates Prison Ministry. The aim of this ministry is:

· To lead prisoners to a saving knowledge of Christ, to confess Him as Savior and to live their lives under His Lordship.

· To disciple them in Christian living that does not shame our Lord.

· Help them return to society as members of the evangelical church of their choice. They return to "the hood" and when people get to know them, they get to know Jesus.

Here we have an evangelical preacher whose sole mission is conversion. Obviously, he stands in opposition to Islam which is another proselytizing religion. He could not get an Imam, so one of the prison inmates who was performing religious rites as best he could for the inmates was taken as the Imam and his view has been propagated as that of all Muslims all across the globe. Even the Pope does not speak for all the Christians! And Islam has so many sects with varying beliefs, traditions and interpretations of scriptures. No one Muslim can hence speak for what all of Islam believes, leave alone someone who is not even a cleric. Imagine the views of P Muthalik being taken as the view of all Hindus!

Regarding changing the demography of Britain in 20 years, even if all Muslim women of child bearing age in Britain give birth to a child every year, for the next 20 years, such an outcome will not take place. Simple math! That’s all. (This para was not part of Rick Mathes’s email)

Finally, let us say an uneducated Christian layman was taken as a Christian priest and put in contention against learned holy men from other faiths. I wonder how he would respond to what is written in the Bible (Old Testament)… God kills 70,000 innocent people because David ordered a census of the people (1Chronicles 210)…. He orders the killing of all the men, women, and children of each city, and the looting of all of value (Deuteronomy)…. killing of “all the living creatures of the city: men and women, young, and old, as well as oxen, sheep, and asses” (Joshua 6)…. murder of all the people of Jabesh-gilead, except for the virgin girls who were taken to be forcibly raped and married (Judges 21). When they wanted more virgins, God told them to hide alongside the road and when they saw a girl they liked, kidnap her and forcibly rape her and make her your wife! The God of the Bible also allows slavery, including selling your own daughter as a sex slave (Exodus 21:1-11), child abuse (Judges11:29-40 and Isaiah 13:16), and bashing babies against rocks (Hosea 13:16 & Psalms 137:9). The last one of course has also been made into the great hit song ‘By the Rivers of Babylon” by Boney M.

What we really need to do is to stand up against all injustice and not only of the Islamic variety. The key perhaps is acceptance of our differences, especially in religious belief. As the Lord says in the Srimad Bhagawad Gita....’Worship Me in any form, and I will reveal Myself to My devotee in that form’.

Chain email:

Infidel or Non Believer.

Allah or the Lord Jesus Christ? The Muslim religion is by far the fastest growing religion in the UK.
Last month I attended my annual training session that's required for maintaining my prison security clearance. During the training session there was a presentation by three speakers representing the Roman Catholic, Protestant and Muslim faiths, who explained each of their beliefs. I was particularly interested in what the Islamic Imam had to say. The Imam gave a great presentation of the basics of Islam, complete with a video. After the presentations, time was provided for questions and answers.

When it was my turn, I directed my question to the Imam and asked: 'Please, correct me if I'm wrong, but I understand that most Imams and clerics of Islam have declared a holy jihad [Holy war] against the infidels of the world and, that by killing an infidel, (which is a command to all Muslims) they are assured of a place in heaven. If that's the case, can you give me the definition of an infidel?'

There was no disagreement with my statements and, without hesitation, he replied, 'Non-believers!

I responded, 'so, let me make sure I have this straight. All followers of Allah have been commanded to kill everyone who is not of your faith so they can have a place in heaven. Is that correct?'

The expression on his face changed from one of authority and command to that of 'a little boy who had just been caught with his hand in the cookie jar.' He sheepishly replied, 'Yes.'

I then stated, 'Well, I have a real problem trying to imagine Pope Benedict commanding all Catholics to kill those of your faith or Dr. Stanley ordering all Protestants to do the same in order to guarantee them a place in heaven!'
The Imam was speechless!

I continued, 'I also have a problem with being your 'friend' when you and your brother clerics are telling your followers to kill me! Let me ask you a question. Would you rather have your Allah, who tells you to kill me in order for you to go to heaven, or my Jesus who tells me to love you because I am going to heaven and He wants you to be there with me?'

You could have heard a pin drop as the Imam remained speechless. Needless to say, the organizers and promoters of the 'Diversification' training seminar were not happy with this way of dealing with the Islamic Imam and exposing the truth about the Muslims' beliefs.

Within twenty years there will be enough Muslim voters in the U.K. to elect a government of their choice, complete with Sharia law.

I think everyone in the U.K. should be required to read this, but with the Liberal justice system, liberal media and political correctness madness, there is no way this will be widely publicised.

This incident happened in London