Behind China's growing belligerence

In 2010, China is now a nation of 1.3 billion comprising 800 million peasants, widening rural urban wealth and health gaps, and plummeting confidence in the CCP. In the mind of the CCP, it is its worst nightmare; civil unrest that could trigger yet another peasant revolt. This time however, widespread civil unrest could signal a co-ordinated and externally supported ethnic uprising in Xinjiang and Tibet. With the potential prize of an oil rich Xinjiang, a weakened China may not receive the support of Islamic neighbours it may demand.

Tibetan's Buddhists may also find unexpected support from India anxious to have a non-aggressive northern neighbour and the problems along China's northern borders could decline without Chinese support.

Without China's demand for its oil, gas, minerals and lumber, Russia could also benefit greatly from a fragile China. This could translate into improved relationships with the CIS (Commonwealth of Independent States), security of its Far East, development of the Northeast Transport Corridors, replacing China as the negotiating power with North Korea, all of which would  strengthen its relationship  with Europe and the US.

China's strategy of stimulus-driven industrial and economic expansion to raise GDP to double-digit growth, based on infrastructure spending, has priority over reducing the continuing, widening wealth gap between rural and urban China.

Continuing official corruption involving land resumption, relocations and compensation is undermining support for the CCP in the countryside. As is the accelerated loss of arable land for urbanisation, industrialisation and infrastructure increases with ongoing desertification, community relocations, pollution, as well as shortages and contamination of water resources.

The major contribution of mega infrastructure projects to GDP is adding to pressures on Beijing. Relocation of populations affected by the Three Gorges Dam (3GD) and the South to North Water Diversion Project (SNWDP) far exceeded estimates, increasing demand for new farmland and housing for the more than 2 million displaced. Many affected by destabilised 3GD reservoir shorelines caused by the rising water level have experienced more than three moves, while others remain on dangerous ground awaiting outstanding compensation: costs continue to mount.

Intended consumers of SNWDP water are complaining about the prohibitive cost for raw water and cost of treating the low quality water for consumption. Local governments, short of water but in line for SNWDP water, now claim the final cost of water is prohibitive and see investment in seawater desalination as a more reliable and cheaper option.

CCP misdirection and credibility hits

Beijing's high media coverage of the government-led China Iron and Steel Association was intended to force the iron ore miners to capitulate to China's ore pricing demand: it proved to be a lead balloon. It not only divided China's steel industry, but redirected buying to the high price spot market. China responded with the arrest of Stern Hu and more media coverage on Beijing's assertions. We will hear more of Stern Hu who is likely to become the inevitable pawn in multiple international negotiation scenarios, some of which have no relationship to steel.

In a blaze of international and domestic media coverage, Hu Jintao launched China's US$6.6 billion version of CNN at China's Inaugural World Media Summit and invited the world media elite to make it an annual affair. Restrictions on discussion points and the appointment of China's propaganda chief to run new media group proved another lead balloon. There were no takers to host a second summit.

China's efforts at Copenhagen to assert its global influence on developed nations to achieve major benefits for itself, India and smaller developing countries not only bombed out, but worsened the plight of China's small developing nation supporters, especially those most in danger of early inundation by rising sea levels.

State media censored the international news of Google's threatened withdrawal from China and the substantial claims of extensive personal, corporate and government privacy invasion of internet users. Support for Google was yet another reflection of increasing impatience with China's abuse and cyber intrusion into individual and corporate privacy of the internet.

Extensive media coverage focused on Beijing's objections to the US supply of arms to Taiwan, and threats to withdraw Sino-US co-operation on key issues that could include Iran and North Korea. Washington ignored the rhetoric, but state media failed to report the response. China continues to provide arms and assistance to rebel groups along India's northern borders.