Saturday, November 29, 2014
Thousands of ex-soldiers are to be deployed to villages and towns in China's troubled northwest to counter a spike in deadly inter-ethnic violence and terrorist attacks that has claimed scores of lives this year.
At least 3,000 former members of the People's Liberation Army (PLA) will be shipped into communities in Xinjiang, a sprawling region of deserts and mountains that shares borders with Afghanistan and Pakistan.
Xinjiang, which is home to an increasingly discontented population of Muslim Uighurs, is witnessing a dramatic surge in violence that Beijing blames on separatists and religious extremists but experts believe is also rooted in the social and economic exclusion of Uighurs.
"The situation in Xinjiang is getting worse and the government needs more people to prevent further riots from happening," said Pan Zhiping, an academic from the Xinjiang Academy of Social Sciences.
The initiative to send former PLA troops to Xinjiang follows another Communist Party project to send 200,000 officials to rural areas to collect intelligence on Uighur communities and attempt to improve relations between them and China's ethnic Han majority.
A "people's war" on terror – launched in May – has seen a major deployment of troops across the region as well as a jump in the number of people being executed for terrorist offences.
Since the anti-terror campaign began, at least 21 people have been executed for such crimes in Xinjiang, compared to just five in 2012 and one in 2011, according to an analysis of publicly available media reports.
One hundred and fifteen suspected terrorist groups have been dismantled and 334 people arrested, Xinjiang's government announced last week.
Earlier this month 22 Uighurs – including a number of "underground imams" – were given heavy jail terms in the city of Kashgar for "conducting illegal religious activities."
Such arrests have lead some to question whether a crackdown on Islam as well as terrorism is also under way.
Xinjiang officials are now seeking former troops of "high political quality and military experience" to beef up security in the region, state media announced on Friday. Candidates should be under 30, have no criminal record and be "against separatism and illegal religious activities," according to the Civil Affairs Bureau in Urumqi, the regional capital. Successful applicants will receive salaries of at least 3,000 yuan (£310) per month and help relocating.
The initiative represented the latest phase in the "securitisation of Xinjiang with a clear focus on protecting the Han population," said Dr James Leibold, a specialist on China's ethnic policy from La Trobe University in Australia.
"These attacks have really spooked the Han population in Xinjiang and the Party cannot afford to lose their trust and faith," he added. "Clearly they don't feel they have enough in terms of security folk."
During a recent trip to Hotan, a city in southern Xinjiang that has suffered repeated outbreaks of violence, Dr Leibold recalled seeing around 50 Han Chinese civilians dancing in a public square. Around them stood more than 70 armed police officers with machine guns.
"They just come when the Han come out to dance and when the Han leave, they leave too," Dr Leibold said. "It was pretty weird."
Last week, a court in China’s far western Xinjiang region sentenced Ilham Tohti, a member of the Uighur minority, to life in prison or the crime of “inciting separatism.” The conviction of this moderate scholar elicited international condemnation; the sentence was an order of magnitude longer than those given to other Chinese dissidents. But, far from being a show of strength, the sentence is a sign of the confusion and desperation behind the government’s policies toward Uighurs.
That Mr. Tohti, an economics professor and a blogger, should become a celebrated political prisoner is a paradox, for he is in many ways a poster child for what the Communist Party hopes more Uighurs will become. Educated, and eloquent in Mandarin, he was a party member from a family closely engaged with the state (his male relatives include members of China’s military and state security organs). He is professional, entrepreneurial and middle class (his family assets amounted to around $130,000 before state confiscation). He is not outwardly religious (most Uighurs are Muslims, but vary in the degree and nature of their observance). He is distinctive mainly in his outspokenness.
Though the Chinese often think of Xinjiang as a remote frontier of deserts and mountains, populated with quaint folkloric natives, it is closely linked to the rest of China and to Central Asia by an expanding transportation infrastructure; the skyscrapers, neon glow, booming commerce and air pollution of Xinjiang’s cities resemble those elsewhere in China; and although, like rural areas throughout the country, Xinjiang’s villages remain poor, the emerging middle class in the cities is scarcely different from its counterparts in other urban centers. Rapid economic development has benefited Uighurs as well as Han Chinese (each group makes up just over 40 percent of the region’s population of 21 million).
Yet the authorities seem puzzled and frustrated that, despite these economic gains, Uighurs remain adamantly Uighur. Sporadic local disturbances are endemic throughout China, but in Xinjiang they are colored by ethno-national and religious sentiments. After a relatively quiet decade, from 1998 to 2007, stability has eroded alarmingly since 2008, with a big, bloody race riot in 2009, sporadic attacks on police stations and representatives of the state and, over the past year, violence perpetrated by Uighurs against random civilians in Urumqi, the regional capital, and in faraway Yunnan Province and Beijing. Xinjiang authorities have responded to violence with an intense crackdown, including house-to-house searches, and a campaign against traditional symbols of identity: veils, head scarves, beards, traditional hats, Ramadan fasting, prayer.
Combined with the recent razing of Uighur architecture in the ancient city of Kashgar and elimination of the Uighur-language educational track from Xinjiang’s schools and universities, these measures seem aimed at repressing Uighur culture. Moreover, the authorities have now doubled down on their post-9/11 tendency to interpret Uighur unrest through a single lens — foreign-inspired Islamic “terrorism” — even when the real causes are local and political.
It is unclear if China’s leaders entirely believe their own propaganda — that all Uighur troubles derive from external sources and are unrelated to government policies — but local and regional authorities certainly benefit from it: Whereas common people elsewhere in China enjoy some de facto freedom to protest official and business malfeasance, Uighurs enjoy no such latitude. In the absence of a free press, Beijing has few sources of on-the-ground information in Xinjiang other than its own self-interested and self-protecting local officials, who can readily justify their mistakes and abuses in the name of fighting “separatism, extremism and terrorism.” No surprise, then, that it was the authorities in Xinjiang, not Beijing, who were most eager to prosecute Mr. Tohti, for he has been arguing that Chinese policies themselves, not simply cyber-radicalization, have been engendering Uighur resentment and violence.
Yet by condemning Mr. Tohti, Beijing has not only subjected itself yet again to international opprobrium, but has denied itself a critical Uighur viewpoint and an alternative approach to the deteriorating situation in Xinjiang. Before it was shut down, Mr. Tohti’s Uighurbiz website was a forum for Han and Uighur contributors to discuss Xinjiang issues, bridging the two communities; the need for more interethnic communication was a theme when the Communist Party issued revised Xinjiang policy guidelines last May.
Most important, Mr. Tohti pointed out that China’s own existing laws could protect minority cultures — if only they were observed. He did not call for a radical American-style democratization, but rather for the protection of indigenous institutions — support for non-Han cultural expression, job opportunities and truly “autonomous” government administration — that is enshrined in the Chinese Constitution and a 1984 law.
This system of “ethnic autonomy” was indirectly derived from the pluralist (though not democratic) ideology of the Qing empire (1644-1911), which first brought Xinjiang, Tibet, Mongolia and Taiwan under Beijing’s rule as a “great family under Heaven.” Though superficially resembling the system of national republics undergirding the Soviet Union, the system developed by the People’s Republic of China differed in substantial ways and was adapted to Chinese conditions and outlooks. It functioned successfully in the 1950s, when Xinjiang was designated the “Xinjiang Uighur Autonomous Region,” and again in the early 1980s, and it remains popular with minority groups even though they have never been afforded real autonomy. Far from “inciting separatism,” Mr. Tohti was advocating a return to foundational promises dating to Mao’s era.
Management of diversity and pluralism is a pressing world issue, from Scotland to Ukraine to Ferguson, Mo. China has an opportunity to contribute its own fixes to the bugs in the nation-state model, but cannot do so by locking up its most creative and courageous thinkers.
OPEC Presents QE4 and DeflationCommodities / Crude OilNov 29, 2014 - 01:10 PM GMT
Thinking plummeting oil prices are good for the economy is a mistake. They instead, as I said only yesterday in The Price Of Oil Exposes The True State Of The Economy, point out how bad the global economy is doing. QE has been able to inflate stock prices way beyond anything remotely looking fundamental, but energy prices have now deflated instead of stocks. Something had to give at some point. Turns out, central banks weren’t able to inflate oil prices on top of everything else. Stocks and bonds are much easier to artificially inflate than commodities are.
The Fed and ECB and BOJ and PBoC may of course yet try to invest in oil, they’re easily crazy enough to try, but it will be too late even if they did. In that sense, one might argue that OPEC – or rather Saudi Arabia – has gifted us QE4, but the blessings of the ‘low oil price stimulus’ will of necessity be both mixed and short-lived. Because while the lower prices may free some money for consumers, not nearly all of the freed up ‘spending space’ will end up actually being spent. So in the end that’s a net loss as far as spending goes.
The ‘OPEC Q4′ may also keep some companies from going belly up for a while longer due to falling energy costs, but the flipside is many other companies will go bust because of the lower prices, first among them energy industry firms. Moreover, as we’re already seeing, those firms’ market values are certain to plummet. And, see yesterday’s essay linked above, many of eth really large investors, banks, equity funds et al are heavily invested in oil and gas and all that comes with it. And they are about to take some major hits as well. OPEC may have gifted us QE4, but it gave us another present at the same time: deflation in overdrive.
You can’t force people to spend, not if you’re a government, not if you’re a central bank. And if you try regardless, chances are you wind up scaring people into even less spending. That’s the perfect picture of Japan right there. There’s no such thing as central bank omnipotence, and this is where that shows maybe more than anywhere else. And if you can’t force people to spend, you can’t create growth either, so that myth is thrown out with the same bathwater in one fell swoop.
Some may say and think deflation is a good thing, but I say deflation kills economies and societies. Deflation is not about lower prices, it’s about lower spending. Which will down the line lead to lower prices, but then the damage has already been done, it’s just that nobody noticed, because everyone thinks inflation and deflation are about prices, and therefore looks exclusively at prices.
It’s like a parasite can live in your body for a long time before you show symptoms of being sick, but it’s very much there the whole time. A lower gas price may sound nice, but if you don’t understand why prices fall, you risk something like that monster from Alien popping up and out.
I had started writing this when I saw a few nicely fitting articles. First, at MarketWatch, they love the notion of the stimulus effects. They even think a ‘consumer-spending explosion’ is upon us. They’re not going to like what they see. That is, not when all the numbers have gone through their third revision in 6 months or so.
Welcome to the new era of QE4. As if on cue, OPEC stepped in just as monetary policy (at least the Fed’s) has dried up. Central bankers have nothing on the oil cartel that did just what everyone expected, but has still managed to crush oil prices. Protest away about the 1% getting richer and how prior QE hasn’t trickled down to those who really need it, but an oil cartel is coming to the rescue of America and others in the world right now.It’s hard to imagine a “more wide-reaching and effective stimulus measure than to lower the cost of gas at the pump for everyone globally,” says Alpari U.K.’s Joshua Mahoney. “For this reason, we are effectively entering the era of QE4, with motorists able to allocate more of their money towards luxury items, while firms are now able to lower costs of production thus impacting the bottom line and raising profits.”The impact of that could be “bigger than anything that has come before,” says Mahoney, who expects that theory to be tested and proved, via sales on Black Friday and the holiday season overall. In short, a consumer-spending explosion as we race to the malls on a full tank of cheap gas. Tossing in his own two cents in the wake of that OPEC decision, legendary investor Jim Rogers says it’s a “fundamental positive for anybody who uses oil, who uses energy.” Just not great if you’re from Canada, Russia or Australia, he says. Or if you’re the ECB, fretting about price deflation. Or until it starts crushing shale producers.
Bloomberg, talking about Europe, has a less cheery tone.
Eurozone inflation slowed in November to match a five-year low, prodding the European Central Bank toward expanding its unprecedented stimulus program. Consumer prices rose 0.3% from a year earlier, the EU statistics office said today. Unemployment held at 11.5% in October [..] While the slowdown is partly related to a drop in oil prices, President Mario Draghi, who may unveil more pessimistic forecasts after a meeting of policy makers on Dec. 4, says he wants to raise inflation “as fast as possible.” [..]“The only crumb of comfort for the ECB – and it is not much – is that November’s renewed drop in inflation was entirely due to an increased year-on-year drop in energy prices,” said Howard Archer at IHS. The data are “worrying news” for the central bank, he said. Data yesterday showed Spanish consumer prices dropped 0.5% this month from a year ago, matching the fastest rate of deflation since 2009. In Germany, Europe’s largest economy, inflation slowed to the weakest since February 2010. [..]Bundesbank President Jens Weidmann, a long-running opponent to buying government bonds, today highlighted the positive consequence of low oil prices. “There’s a stimulant effect coming from the energy prices – it’s like a mini stimulus package,” he said in Berlin.
Sure, there’s a stimulant effect. But that’s not the only effect. While I’m happy to see Weidmann apparently willing to fight Draghi and his pixies over ECB QE programs, I would think he understands what the other effect is. And if he does, he should be far more worried than he lets on.
But then I stumbled upon a long special report by Gavin Jones for Reuters on Italy, and he does provide intelligent info on that other effect of plunging oil prices. Deflation. As I said, it eats societies alive. I cut two-thirds of the article, but there’s still plenty left to catch the heart of the topic. For anyone who doesn’t understand what deflation really is, or how it works, I think that is an excellent crash course.
That same process plays out, as we speak, in a lot more countries, both in Europe and in many other parts of the world: South America, Southeast Asia etc.
Deflation erodes societies, and it guts entire economies like so much fish. Deflation is already a given in Japan, and in most of not all of southern Europe. Where countries might have saved themselves if only they weren’t part of the eurozone.
If Italy had the lira or some other currency, it could devalue it by 20% or so and have a fighting chance. As things stand now, the only option is to keep going down and hope that another country with the same currency Italy has, i.e. Germany, finds some way to boost its own growth. And even if Germany would, at some point in the far future, what part of that would trickle down to Italy? So what’s Renzi’s answer? An €80 a month tax cut for people who paid few taxes to begin with.
Deflation is not lower prices. Deflation is people not spending, then stores lowering their prices because nobody’s buying, then companies firing their employees, and then going broke. Rinse and repeat. Less spending leads to lower prices leads to more unemployment leads to less spending power. If that is not clear, don’t worry; you’ll see so much of it you own’t be able to miss it.
And don’t think the US is immune. Most of the Black Friday and Christmas sales will be plastic, i.e. more debt, and more debt means less future spending power. Unless you have a smoothly growing economy, but that’s not going to happen when Europe, Japan and soon China will be in deflation.
And yes, oil at $50-60-70 a barrel will accelerate the process. But it won’t be the main underlying cause. Deflation was baked into the cake from the moment that large scale debt deleveraging became inevitable, and you can take any moment between the Reagan administration, which first started raising debt levels, to 2008 for that. And all the combined central bank stimulus measures will mean a whole lot more debt deleveraging on top of what there already was.
We’ll get back to this topic. A lot.
By Raul Ilargi Meijer