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Generational Dynamics Web Log for 28-Jul-2015
28-Jul-15 World View -- China faces nightmare political scenario with stock market plunge

Web Log - July, 2015

28-Jul-15 World View -- China faces nightmare political scenario with stock market plunge

Turkey-US 'ISIS-free zone' in Syria becomes increasingly controversial

This morning's key headlines from

US military says China is lying about its artificial islands

Numerous Chinese dredging vessels around an artificial island in May 2 photo taken by American P-8A Poseidon surveillance aircraft
Numerous Chinese dredging vessels around an artificial island in May 2 photo taken by American P-8A Poseidon surveillance aircraft

Adm. Harry Harris, commander of U.S. Pacific Command, indicated that China has been consistently lying by denying the military purpose of the artificial islands they're building in the South China Sea:

"They are building ports that are deep enough to host warships and they’re building a 10,000-foot runway at Fiery Cross Reef. A 10,000-foot runaway is large enough to take a B-52, almost large enough for the Space Shuttle, and 3,000 feet longer than you need to take off a 747. So, there’s no small airplane that requires a runway of that length. They’re building revetted aircraft hangars at some of the facilities there that are clearly designed, in my view, to host tactical fighter aircraft. ...

Most countries choose to pursue diplomatic means to address their disputes. China, on the other hand, is changing the status quo in the region through aggressive coercive island building without meaningful diplomatic efforts toward dispute resolution or arbitration. China is changing facts on the ground...essentially, creating false sovereignty ... by building man-made islands on top of coral reefs, rocks, and shoals. These activities are harming the environment and will not strengthen any country’s legal claims to disputed areas in the South China Sea."

One of the excuses that China has been giving is that other countries have also built artificial islands. But according to Harris:

"While Vietnam, Malaysia, the Philippines and Taiwan have also conducted land reclamation in the South China Sea, their total — approximately 100 acres over 45 years — is dwarfed by the size, scope and scale of China's massive buildup."

He added that China has reclaimed almost 3,000 acres in only 18 months, resulting in enormous harm to the fragile ecosystem. Defense One and Stars and Stripes

China state TV shows mock military attack on Taiwan

Earlier this month, Chinese state TV ran video of People's Liberation Army soldiers storming a mock-up of Taiwan's presidential palace during a major military exercise in northern China.

China has frequently made it clear that Taiwan is sovereign territory of mainland China, and there will be a military attack if Taiwan makes any kind political change to become more independent. As a result, Taiwan's pro-China and pro-Independence governments have for years been following a careful dance not to antagonize China too much, while also maintaining a sufficient arm's length from China. Nonetheless, China has made it clear that, at some point, Taiwan will have to return to the mainland.

It's hard to know what to make of the mock attack on Taiwan's presidential palace appearing on state TV. Was it an intentional signal that a military invasion is close? Or was it left in the video unintentionally? A YouTube link to the video is given below, and the mock attack segment runs from about 3:01 to 3:04 (that is, only three seconds).

A Chinese military attack on Taiwan will bring the U.S. into war China within hours. Even if the U.S. appeases China and doesn't require, something that I believe is almost vanishingly unlikely, then increased tensions in the region will spiral into war before long. Business Insider and YouTube

China faces nightmare political scenario with stock market plunge

China's stock market appears to have been recovering since July 9, after falling 30% since June 12, due an imploding bubble. As I wrote in "25-Jul-15 World View -- Commodities and world trade volume plunge as China pumps stock market", China has all but destroyed the Shanghai stock market as a market, by massively intervening to keep the bubble from imploding further. A bubble never implodes only halfway, so there was never any chance that the intervention would work.

On Monday, the Shanghai composite index plunged 8.5%, the greatest one-day market plunge since 2007, and so now the Chinese Communist Party (CCP) faces a double humiliation. First, it's now clear to a lot of people that the stock market will crash, and that millions of people, especially elderly people, will lose their life savings.

And second, it's now clear that the great, powerful CCP is not powerful enough to control the stock market. This may be enough to cause a panic or even a rebellion.

Typically in these situations, there are wild gyrations. The index may fall 10% one day and rise 10% the next day. There might be a bounce back on Tuesday. On the other hand, more than 1,700 stocks fell by the daily 10% limit on Monday, indicating that they would have fallen even more if allowed. This would indicate a further plunge on Tuesday. Either way, the bubble must continue imploding at some point. (At this writing, on Monday evening ET = Tuesday morning in Shanghai, the market has already fallen 4%, and stocks are down across Asia. Commodities continue to fall.)

The CCP is now going to be considering what further desperate measures they can try. The government has already poured some $800 billion into the market within a few days. As a last resort, the CCP may have to "print" a lot of money and purchase stock shares from anyone who wants to sell them.

China's history is filled with huge, massive internal rebellions (civil wars). The last three were the White Lotus Rebellion (1796-1805) and the Taiping Rebellion (1852-1869), Mao's Communist Revolution (1934-49), killing millions or tens of millions of people each time. These occur at regular intervals, with each new one occurring at about the time that the survivors of the preceding one die off. From the point of view of Generational Dynamics, it's time for the next one and, in fact, it's a bit overdue. The CCP officials are aware of that even if they don't know anything about generational theory. Bloomberg and Asia Times

Turkey-US 'ISIS-free zone' in Syria becomes increasingly controversial

Turkey last week announced US warplanes could use Turkey's Incirlik and Diyarbakir air bases to launch attacks on the so-called Islamic State (IS or ISIS or ISIL or Daesh) in Syria. The terms of the US-Turkey agreement that led to that announcement are becoming clearer, and are generating controversy.

The heart of the agreement is that the US and Turkey will work together to create an "ISIS-free zone" in Syria along a portion of the border with Turkey. This was being called a "safe zone" last week, but that name has apparently been abandoned so as not to provoke Syria's president Bashar al-Assad. The term "no-fly zone" has been abandoned for the same reason.

As we wrote in "26-Jul-15 World View -- Turkey bombs ISIS targets in northern Syria to set up 'safe zone'", the Kurds in northern Syria are separated into two large enclaves, one in the east up the border with Iraq, and one in the west. If the Kurds can unite those two regions, then it can declare the entire region a Kurdish state, something that Turkey will not tolerate.

The proposed "ISIS-free zone" is the region separating the two Kurdish enclaves, and so the objective of the Turks seems to be to create it actually as an "ISIS-free and Kurdish-free zone." This severely complicates the US coalition's mission in Syria, since the Kurds are supposed to be our allies. Pro-Kurdish activists are accusing Turkey and the US as being in a joint plan to kill Kurds as well as ISIS.

It's worth pointing out that there are no good guys in Syria. Bashar al-Assad is a genocidal monster who's used "industrial strength" torture, barrel bombs and Sarin gas on innocent women and children. The Kurdish PKK is a far left revolutionary terrorist group that has been bombing and murdering innocent civilians for decades. And of course ISIS and al-Nusra are bloody jihadists who decapitate innocent civilians just for fun. There's really no one to root for here. However this "ISIS-free zone" gets sorted out, all we can really do is watch as the Syria continues to deteriorate, until we're finally drawn in and forced to fight someone, whoever we feel is our enemy at the time. Hurriyet (Ankara)

(Comments: For reader comments, questions and discussion, see the 28-Jul-15 World View -- China faces nightmare political scenario with stock market plunge thread of the Generational Dynamics forum. Comments may be posted anonymously.) (28-Jul-2015) Permanent Link
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