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An Erosion of Confidence in China

“There is no Alan Greenspan or Mario Draghi in China,” said Peng Junming of Beijing-based Empire Capital Management, referring to the former chairman of the Federal Reserve and the current president of the European Central Bank. Peng, a former official of the People’s Bank of China, highlighted one weakness of his country’s financial system. When stocks started to slide in June, no top official appeared in front of the cameras to reassure nervous investors.

The Wall Street Journal thinks Beijing’s silence is significant. “The rescue effort is missing one feature found in markets elsewhere: a senior figure stepping forward to stop the panic,”  the paper noted on Tuesday.

There are, in fact, leaders who the Chinese people see with some regularity, namely the general secretary of the Communist Party, Xi Jinping, and the premier of the central government, Li Keqiang. Neither Xi nor Li, however, has gone on the record over the stock rout. 

North Korea Rolls Back Economic Reform

Kim Jong Un, the North Korean ruler, has reportedly ordered the removal of foreign products from his country’s markets. Said an official in North Hamgyong Province, “I was told by North Korea’s central authorities not to stop travelers from bringing in products from China through customs, but to strictly prohibit sales of the products in the market.”

The move at first looks like an attempt to target China, the source of many of the goods sold in the North, but Pyongyang could also be trying to implement a broad anti-reform agenda.

China’s Last ‘Immortal’ Dies

Wan Li died last week, according to his son. Bloomberg called him the last of the Chinese Communist Party’s “Eight Immortals,” revered post-revolution-era figures. He was 98.

Wan, a reformer, oversaw the breakup of agricultural collectives in eastern Anhui Province, paving the way for family farming. He retired in 1993 after serving as chairman of the National People’s Congress as well as Beijing party chief, railway minister, and vice premier. In 2004, Wan boldly called for liberalization of the party’s decisionmaking.

Rewriting Japan’s ‘Peace Constitution’

On Sunday, 40 soldiers from Japan’s Ground Self-Defense Force participated in the biennial Talisman Sabre exercise in northern Australia, jointly held by the US and Australia.

Japan’s involvement in the massive military event followed a flight on June 23rd of one of its P-3Cs over contested waters. The patrol plane flew about 100 kilometers west from the Philippine island of Palawan into the South China Sea. The craft came close to Reed Bank, claimed by both Manila and Beijing, and then headed back to base. On board, three Filipino military personnel accompanied the Japanese crew of 13.

Obama Breaks Protocol, Slights Top Chinese General

Contrary to Beijing’s expectation, President Obama declined a Pentagon request to receive Chinese General Fan Changlong, vice chairman of the Communist Party’s Central Military Commission, while he was in Washington during his five-day visit in June. Fan, described by the South China Morning Post as “a military heavyweight and one of President Xi Jinping’s most trusted right-hand men,” is the first CMC vice chair in at least two decades—perhaps the first ever, as some report—not to meet with a sitting American leader during an official visit to Washington.

It appears Fan was slighted at the Pentagon as well. The general did not get the usual 19-gun salute at his welcoming ceremony, nor was it particularly well attended by senior American officers. In the end, the delegation was denied the DC pomp and ceremony and those prized White House photo ops that authoritarian regimes crave to show their legitimacy to audiences back home.

Fiasco for China’s Allies in Hong Kong

On Tuesday, Hong Kong’s wealthiest businessman, Li Ka-shing, said he was “very disappointed” over the Hong Kong government’s failure to enact its reform package for the 2017 election of the chief executive, the city’s top political official. When asked who was responsible for what is now widely called a fiasco, Li ducked the question. “Everyone in Hong Kong is discussing this,” he said.

He’s right. Just about everybody in Hong Kong is talking about the events that unfolded last Thursday in Legco, as the city’s Legislative Council is known. The legislators, after a 20-month drama, finally voted on China’s proposal to “reform” the procedures for the election of the chief executive.

Xi's Purge: Anticorruption or Loyalty-Based? Is It Finished Yet?

Thursday, Beijing disclosed the trial, plea, and sentencing of Zhou Yongkang, once the country’s security czar and now the highest official to be prosecuted since Maoist times.

The reviled Zhou received a life term for taking bribes, disclosing state secrets, and abusing power. He was also deprived of political rights for life and forfeited assets.

Zhou, according to state media, admitted his crimes and will not appeal. “The basic facts are clear,” he said according to the official Xinhua News Agency. “I plead guilty and repent my wrongdoing.”

“Zhou’s trial was a symbol of the CPC’s commitment to the rule of law,” Xinhua reported.

China and US Cyber Security

From December through April, hackers exfiltrated personal data on almost 4.2 million US federal employees and contractors.

The attacks, on the network of the Office of Personnel Management, appear to be an attempt, as the Washington Post reported, to build a database on Americans, especially those in sensitive positions. This conclusion looks correct: the same party that carried out the OPM hacks may be behind attacks last year on the health insurers Anthem and Premera Blue Cross.

South Korea Plays China Against America

Uriminzokkiri, the state-controlled North Korean website, recently criticized South Korean President Park Geun-hye for planning to go to Washington in the middle of this month instead of commemorating the 15th anniversary of the inter-Korean summit, which falls on June 15th. Park is scheduled to meet President Obama on June 16th.

“Why does she plan to visit the US, the prime enemy that divided the two Koreas?” Uriminzokkiri asked. “This shows the repetition of Park’s bad habit for making overseas escape.”

There was never much possibility of a joint celebration of the now-maligned summit in 2000, but North Korean propagandists are correct to point out that Park has traveled abroad to great powers. And as she does so, she is controversially changing Seoul’s outlook toward the world.

Gloria Steinem, Nobel Laureates Attempt to Cross the DMZ

On Sunday, Gloria Steinem, two Nobel Peace laureates, and 27 other women crossed the Demilitarized Zone from North Korea into South Korea in an attempt to bring peace to the long-divided and troubled peninsula.

“We have received an enormous amount of support,” said Steinem, the 81-year-old women’s rights activist, on her arrival in the South. It is also true that she and her group, WomenCrossDMZ, also faced a chorus of sharp criticisms.

Much of the criticism centered on Steinem and the others not confronting the North Korean leadership over the horrific plight of women in that miserable state. Yet the group’s activities—both in Pyongyang, where they congregated before the crossing, and during the crossing itself—raised other issues. Among them is the most difficult Korea question faced by countries and international organizations, whether to isolate or engage the regime led by the Kim family.

Continuing Executions in North Korea

General Hyon Yong Chol, North Korea’s defense minister, was executed at a military academy near Pyongyang “around” April 30th, at least according to South Korea’s National Intelligence Service.

Some analysts contend the NIS report is implausible, but, whether it is accurate or not, there has been an evident acceleration in the pace of executions. The deaths suggest to others that the Kim family regime is no longer stable.

There are experts who believe Hyon is still alive. He was featured in a documentary aired by North Korean state media on May 14th. Normally, the airing would be proof the NIS report was false. As Sue Chang of the Wall Street Journal’s MarketWatch site explains, “That Hyon was not edited out of that production raised eyebrows in light of the regime’s habit of expunging officials from public materials once the officials have been eliminated.”

North Korea's Black Market: Big Enough to Force Reforms?

There is a property boom in Pyongyang, the capital of the destitute Democratic People’s Republic of Korea. The boom, in turn, has created an impetus for economic reform.

Apartment prices have skyrocketed 30-fold since the turn of century. The most expensive unit now goes for about a quarter of a million dollars, a large sum in a country where official wages are not even $2 a month.

That, at first glance, is amazing, especially because all property—including every single housing unit in the country—is owned by the state.

As Richard Lloyd Parry of the Australian explains, owners—if they can be called that—do not actually have title. They occupy their apartment after “swapping” residences with “sellers,” who receive compensation for taking less-desirable units in exchange. All transactions are approved by state bureaucrats, who attend to necessary paperwork for under-the-table payments.

China Creates Adversaries With South China Sea Reclamations

Beijing’s exchange of allegations with Manila over the South China Sea became increasingly nasty this week when the Chinese Foreign Ministry, on May 5th, accused the Philippines of “malicious hyping and provocation.” China accused its island neighbor of illegally seizing its possessions in that body of water. China claims almost all the islands, shoals, rocks, and reefs there as sovereign territory.

Beijing’s undiplomatic language accompanies its contention that the Philippines and other nations had, by building facilities, violated the nonbinding Declaration on the Conduct of Parties in the South China Sea, signed November 2002 by ASEAN states and China.

China Goes After ‘Economic Fugitives' in America

On April 22nd, Xinhua News Agency reported that China’s Central Commission for Discipline Inspection released a wanted list of 100 individuals—77 men and 23 women—accused of corruption. Beijing is trying to get foreign governments to cooperate with its efforts to apprehend the suspects.

Of the 100 listed, 40 are believed to be in the US, and Beijing also maintains that in total there are more than 150 “economic fugitives” now in America. 

Chinese law enforcement officials have had some success in obtaining American assistance. Washington’s collaboration, however, raises fundamental issues for any free society.

North Korea Looks for a New Friend, India

On April 13th, Ri Su Yong met his Indian counterpart, External Affairs Minister Sushma Swaraj, in New Delhi. The trip is thought to be the first time a North Korean foreign minister has visited India.

Ri’s mission highlights North Korea’s attempt to isolate China, its only formal military ally, and establish new relationships in Asia and elsewhere.

Ri last week discussed his country’s nuclear weapon program and asked for additional humanitarian aid. Yet the topics of conversation were not nearly as important as the fact that the meeting took place at all, not to mention in the Indian capital.

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