China, the fragile 21st century mercantilist state

Questioning CCP edicts is unthinkable and severely punished in China. Defiance in many instances can bring a death sentence.

Deeply ingrained in the CCP psyche, is the socialist command economy philosophy and absolute power over the people.

For ages, China has been a land of mystery. Understanding the "inscrutable and unpredictable Chinese," was a highly complex challenge. It is in fact, just the opposite. China is predictable, and since pre 1949, China's communist party, using state controlled media and official statements, has unintentionally provided clues to problems and impending actions. From the billboard and propaganda blasted from community loudspeakers of the pre "opening up" era, the CCP's vast propaganda machine has provided these clues.

These ranged from the occupation of Inner Mongolia, intervention in North Korea, the two invasion stages of Tibet, the first Taiwan straits crisis, invasion of northeast and northwest India, sorties into disputed areas of the USSR, invasion of Vietnam, the crackdowns in Tibet and Xinjiang, as well as the efforts to claim offshore oil and gas resources, and disruption to unity in several Himalayan and Indian ethnic regions and China's goals in the 21st century.

The 21st century media content of state and local media articles, and political statements still unintentionally signal Beijing's concern, fault lines and intentions to those analysts with a sound knowledge of CCP psyche and the teachings of Sun Tzu when translated into today's national and international economics and politics. Beijing firmly believes truth can worsen civil unrest in times of uncertainty.

The importance of making face (mianzi) and losing face (diu lian)

The CCP is paranoid about any event that may result in loss of face that could affect the confidence of the Chinese people in the government. To shield the CCP from loss of face, Beijing relies on total media and military control. The pursuit and significance of mianzi therefore prevents free and open public discussion, and media reporting on matters that may expose weakness and/or possible vulnerability in any government policy or project.

The CCP claims that loss of face, can materialise from truth, and total control and repression of media freedom ensures that diu lian is kept in its box.

Diu lian times four in 12 months

Beijing's paranoia over diu lian rocketed following four serious hits in only 12 months.

Hit 1
Despite considerable media exposure of Beijing's direct involvement in commercial iron ore pricing negotiations, foreign private mining corporations had the audacity to reject Beijing's intervention, demands, threats and grandstanding.

Beijing's strategy failed miserably and Chinese mills had to cut production or buy 2009 ore on the higher priced spot market. Chinese steel companies also ignored Beijing's demands to negotiate through the Beijing run China Iron and Steel Corporation and negotiated purchases on the spot market.

To make face, Beijing responded with predictable childish petulance, arresting four of Rio's senior staff on trumped up charges of stealing state secrets of China's already well documented and fully understood steel industry.

Facing the prospect of further diu lian, Beijing is likely to oppose participation in the approaching 2010 iron ore price negotiations.