Here is a
great article on many of the problems China's military is facing, which explains many of the overall problems in China, such as lack of innovation, lack of planning, incompetent engineering and the problems with a planned economy.
This persistent dependence on Russian arms suppliers demonstrates a central truth about the Chinese military: The bluster about the emergence of a superpower is undermined by national defense industries that can't produce what China needs. Although the United States is making changes in response to China's growing military power, experts and officials believe it will be years, if not decades, before China will be able to produce a much-feared ballistic missile capable of striking a warship or overcome weaknesses that keep it from projecting power far from its shores.
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"There's a tendency to talk about China as a great new military threat that's coming," said Hans M. Kristensen, director of the Nuclear Information Project at the Federation of American Scientists. But, when it comes to Chinese submarines carrying ballistic missiles, he said, "they could be sitting ducks."
Another problem is that China's submariners don't train very much.
China's entire fleet of 63 subs conducted only a dozen patrols in 2009, according to U.S. Navy data Kristensen obtained through a Freedom of Information Act request, about a tenth of the U.S. Navy's pace. In addition, Kristensen said there is no record of a Chinese ballistic-missile sub going out on patrol. "You learn how to use your systems on patrol," he said. "If you don't patrol, how can you fight?"
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China's lack of foreign military bases - it has insisted that it won't station troops abroad - limits its capacity to maintain its ships on long-term missions. A shortage of helicopters - the workhorses of a naval expeditionary force - makes it hard for the ships to operate with one another. China's tiny fleet of replenishment ships - it has only three - doesn't give it enough capacity to do more than one such operation at a time.
China's navy, according to Yung, also has difficulty maintaining a fresh water supply for its sailors. And poor refrigeration on its ships makes it hard to preserve fruit and vegetables, something that makes for griping on board.
"The sailors during the first deployment had a real morale problem," Yung said, adding that following their mission, they were taken on a beach vacation "to get morale back up."
Empowering local commanders, considered key to a successful fighting force, is something that Beijing clearly has yet to embrace. British Royal Navy Commodore Tim Lowe, who commanded the Gulf of Aden operation for the U.S. 5th Fleet up until May, noted that while other navies would send operations officers to multinational meetings to discuss how to fight pirates, China would dispatch a political officer who often lacked expertise. The concept of sharing intelligence among partner countries was also tough for the Chinese to fathom. To the Chinese, he said, "that was an unusual point."
The benchmark one-year lending rate was hiked 25 bases points to 5.81%, and the one year deposit rate jumped by 25 basis points to 2.75%. Obviously combating inflation is the goal.
This is the second such move in a month.
As Hot Money Rushes Into China, The Smart Money Is Getting The Hell Out
China has been ranked as the top growing country among the G20 since 2001 and is expected to retain that title for at least another five years (See Growth Chart). However, the news coming out of China for the past three months has not been good. It is looking more and more that it is not a question of if China is a bubble and going to burst, but when.
The country has major infrastructure issues, troubling population dynamics, poorly aligned employment outcomes, inflation problems, a real estate bubble, an opaque and potentially insolvent banking system (had mark-to-market accounting been applied), geo-political problems with North Korea and Taiwan, and an underperforming stock market in 2010 (see stock comparison chart).
While the hot money is flooding into China, the smart local money is doing everything they can to get their money outside of China, which partly explains why Shanghai SE Composite has underperformed other markets for the past year or so (see Comparison Chart).
The many issues of China could conspire to become the biggest train wreck waiting to happen, and potentially dwarf any little budget problems in Europe by a factor of ten.
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Furthermore, China`s practice of overbuilding at the height of real estate valuations makes even haircuts on loan write-offs an untenable practice for banks, and by further throwing good money after bad, the ultimate mark- to-market effect could be catastrophic for Chinese Banks.
This is the main reason all the major Chinese banks have gone to the market in 2010 to raise more capital before investors wise up to the underlying deficits these banks face, as these bad loans eventually would need to be written off the books.
Victor Shih, a Northwestern University professor estimates that Chinese local governments borrowed some 11.4 trillion renminbi at the end of 2009, and that local government financing loans to be roughly one-third of China's 2009 GDP.
17 Facts About China That Will Blow Your Mind
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