MH370: "Criminal" investigation begins, search widens

Theories on what caused Malaysian Airlines flight MH370 to deviate from its intended flight path from Kuala Lumpur to Beijing have shifted focus with pilot suicide, terrorism & even cyber-hijack cited as possibilities. Meanwhile the search for the missing plane has widened to an area stretching several hundred kilometres and across several countries.

After a week of searching for the missing Boeing 777-200ER new data emerged that confirmed the plane had turned back, headed west and then turned either north or south, travelling for several hours before data was lost.

Investigators are now convinced that someone on the aircraft deliberately took control and flew it on a different route.

Chronology of events

Soon after flight MH370 took off from Kuala Lumpur International Airport the ACARS transmitter was switched off or otherwise disabled. ACARS is used to send various types of data, such as information relating to fuel consumption, engine performance data, aircraft position and occasionally text style messages. The switching off of this data stream may have been overlooked by Malaysian Air Traffic Control however since they raised no concerns and later made the routine call to the plane when it was about to enter Vietnamese airspace.

On being informed to contact Ho Chi Minh ATC in Vietnam there was only the simple audio message response, “All right, roger that” [BBC].
[Note that some media have also reported the pilot returned a response as, “All right, goodnight”] / Timeline: BBC / Washington Post

Deviated

What has now become clear, from studying military radar data, is that the plane made a counter-clockwise turn and headed west back across Malaysia.

Then on Saturday, one week after the disappearance of the Boeing plane, it was revealed that a satellite belonging to Inmarsat had picked up a ‘ping’ from the aircraft [Inmarsat - Press Release].

Analysts had studied this new data and extrapolated the possible route that the plane may have followed. Given only one satellite had picked up the plane, triangulation was not possible. Thus investigators could only determine the plane’s possible trajectory as being within one of two arcs that extended several hundred kilometres.

One one possible route the plane would have headed was south across the Indian Ocean with no possible landing place. The other route would have taken the plane across India, China, and as far north as Kazakhstan.

While the route was approximate, data showed the plane was in the air for several hours, though it has not emerged for exactly how long.

Control

From the newly uncovered data, investigators were now convinced that someone in the cockpit took control of the aircraft. The question was who and why?

Suspicions have focused firstly on the pilots. Plain-clothes detectives have searched the homes of both the captain, 53-year-old Zaharie Ahmad Shah, and co-pilot, 27-year-old Fariq Abdul Hamid.

Neither had, according to authorities, made a request to fly together, something that had been speculated by some media reports. There was some concern expressed by reports that the captain had an elaborate flight simulator installed at his home.

Malaysia's Transport Ministry confirmed that they were examining the flight simulator taken from his home, but did not elaborate further.

Neighbours, speaking to CNN, were sceptical of any suggestion Captain Shah would have endangered his own aircraft or its passengers and said the media were making too many assumptions of his owning a flight simulator.

There are suggestions too that the captain was political fanatic and an ‘obsessive’ supporter of Malaysia’s opposition leader, Anwar Ibrahim [BBC - Profile / Daily Mail].

Possible hijacking

The speed at which ACARS and the transponder were switched off has prompted many investigators to dismiss the possibility of a hijacking.

Flight MH370 departed from Kuala Lumpur International Airport at 00:41 on Saturday [16:41 GMT Friday], and was due to arrive in Beijing at 06:30 [22:30 GMT].

Malaysia Airlines says the plane lost contact at 01:30 [17:30 GMT] 49 minutes after takeoff. However ACARS had been switched off shortly after the aircraft had reached its cruising height of 35 feet at 01:01 [17:01 GMT].

Only on reaching cruising height would seatbelt signs be switched off. Thus terrorists or hijackers would have only a small window in which to launch an attack on the cockpit.

Nonetheless, minutes may be all that was needed.

Terrorism

The possibility of a terrorist attack is raised in several reports. The Sunday Telegraph reported that there was a possible plot being investigated after an Al-Qaeda supergrass told a court that four or five Malaysian men had planned to hijack a passenger airliner.

Giving evidence at the trial in New York of Sulaiman Abu Ghaith, Osama bin Laden’s son-in-law, Saajid Badat, a British-born Muslim from Gloucester, said that he had been instructed at a terrorist training camp in Afghanistan to give a shoe bomb to some Malaysian terrorists. “I gave one of my shoes to the Malaysians. I think it was to access the cockpit,” Badat said.

Badat, who spoke via video link and is in hiding in the UK, said the Malaysian plot was being masterminded by Khalid Sheikh Mohammed, said to be the principal architect of 9/11. The reports have certainly refocused the media spotlight on Al-Qaeda [News.com.au].

Motives

Should terrorists have taken control of Malaysian Airlines flight MH370 there surely must have been a motive.

Several media reports point their suspicions to Uyghur separatists. Indeed such theories do have some credence.

Reuters this week reported that Uyghur rebel Abdullah Mansour had said he was intent on bringing a Holy Fight to China because of its treatment of Muslims in the country.

Speaking from an undisclosed location Pakistan Mansour said, “The fight against China is our Islamic responsibility and we have to fulfil it.”

Interestingly if the plane had turned west from the South China Sea and then turned north-west towards Kazakhstan, it would have taken a direct path over Xinjiang, the Uyghur heartland.

In the Reuter’s report, Mansour said attacking China was the duty of not only his party, but all Muslims. And while he made no mention of the missing Malaysian Airlines plane or a recent terror attack in Kunming, Mansour said there were many operations being planned.

“We have plans for many attacks [against] China,” he told Reuters. “We have a message to China that East Turkestan people and other Muslims have woken up. They cannot suppress us and Islam any more. Muslims will take revenge.”

The Turkestan Islamic Party, which China equates with the East Turkestan Islamic Movement [ETIM], keeps a low profile in Pakistan. Unlike the Taliban, it almost never posts videos promoting its activities or ideology. Its exact size is unknown and some experts dispute its ability to orchestrate attacks in China, or that it exists at all as a cohesive group [Reuters / Guardian Liberty Voice / EuroNews / News.com.au / Daily Mail].

Cyber-hijack

Aside of the obvious theories of a pilot suicide or conventional hijack there has also been the suggestion MH370 was the victim of the first cyber-hijack. Several Sunday newspapers reported that the plane might have been controlled from the ground or even on board the aircraft using something as simple as a mobile phone [CNN].

“It might well be the world’s first cyber hijack,” British anti-terror expert Dr Sally Leivesley said.

Dr Leivesley, a former Home Office scientific adviser, said the hackers could have changed the plane’s speed, altitude and direction by sending radio signals to its flight management system. It could then be landed or made to crash by remote control.

Again both the theory and motive are highly speculative with possible perpetrators cited as being criminal gangs, terrorists or a even a foreign power [Express / Daily Mail].

Wider search

With the search now expanded across a vast stretch of ocean and several countries the hunt for flight MH370 has become all the more complicated.

Many of the countries that the plane may have crossed are particularly sensitive about revealing their defence capabilities. Indeed Indonesia said on Sunday that it would have to take requests for military radar data under advisement though it said it would launch land searches.

Even where countries are prepared to release data this may reveal little. Vast regions are not covered by radar or, according to some reports, operate on an “as needed” basis.

The search now involves 25 countries, from the previous 14 engaged in the multi-national effort. Planes will have to seek special permission to search some territories which may further delay efforts in finding the missing aircraft.

Mystery

What remains a mystery is where the plane might be. Did it crash after running out of fuel? Did the hijackers or pilots land at a remote airfield and if so what has become of the 12 crew members and 227 passengers on board?

If terror related there is the slim possibility they might be planning video executions such as seen throughout the Iraq War. In fact even FBI investigators say the disappearance of MH370 may have been ‘an act of piracy’ with the possibility that hundreds of passengers are being held at an unknown location not being ruled out.

A more likely possibility is a failed 9/11 style plot. However the apparent north-westerly route seems to dismiss this since there are no high profile targets along this trajectory.

If a pilot suicide, this would seem unlikely given the distance covered. Surely any such attempt to commit suicide and destroy the plane would have been conducted as soon as one had control of the aircraft.

A cyber-hijack in some ways makes the most sense. Should someone have taken absolute control of the plane, switching off communications, transponders and sending it on a new course, the pilots may have been unable to do anything but watch as their aircraft flew towards Kazakhstan before finally running out of fuel.

But what would be the purpose? If it was a cyber-hijack it could have been a test run. Finding out how far one could travel undetected or unchallenged. Indeed it does appear that the plane managed to fly without identifying itself for hundreds of kilometres whilst travelling through several countries’ airspace. The only alternative to it running out of fuel or landing is that MH370 was shot down and no country has admitted responsibility.

The shooting down of a civilian aircraft has happened a number of times in the past. There have been more than a dozen such incidents since 1970 many by fighter jets who have downed airliners for violating sovereign airspace and failed to respond to radio transmissions [Wikipedia: List of airliner shootdown incidents].

However much such theories fit, there will be no real way of knowing until the plane, whole or in part, is located.

tvnewswatch, London, UK

The mystery & tragedy of flight MH370

Mystery still surrounds the disappearance of flight MH370, a Boeing 777-200ER which went missing last Saturday [8/3/2014].

Disappeared

Flight MH370 had departed from Kuala Lumpur International Airport in Malaysia at 00:41 on Saturday local time [16:41 GMT Friday], and was due to arrive in Beijing at 06:30. But Air traffic controllers lost contact at 01:30, less than an hour into its flight.

Malaysian officials said that the last verbal communication with the plane came at the boundary between Malaysian and Vietnamese airspace. Malaysia's air traffic control informed the pilot that the flight was about to fly into Vietnamese airspace and told them to contact Ho Chi Minh control. "OK, roger that", was the last radio transmission.

Soon after the aircraft’s transponder went off and there were no further communications from the aircraft.

Terrorism theory

There have been countless theories as to what became of the plane with a strong focus on terrorism, a catastrophic structural failure or even pilot suicide.

Concerns were doubly raised when it was revealed that two passengers had boarded using stolen passports [Telegraph]. Later identified as two Iranians, Delvar Suyed Mohammad Reza & Pouria Nour Mohammad Mehrdad, their involvement in foul play was discounted since both individuals had arranged to meet up with relatives in Frankfurt, Germany.

Nonetheless some government agencies, including the CIA, said they had still not ruled out terrorism. Indeed there is some concern that coming on the heels of a terror attack in Kunming, Yunnan, China, only a week earlier, the disappearance of flight MH370 might have been a terror attack perpetrated by Uyghur separatists.

There is certainly anecdotal evidence supporting such theories. China has claimed several times to have thwarted terror attacks aimed at bringing down planes.

In June 2012 passengers subdued a person who tried to gain access to the cockpit of Tianjin Airlines Flight 7554 which was travelling between Hotan Airport to Urumqi, the regional capital of Xinjiang of Urumqi [ABC].

In 2008 Chinese state news agencies reported that a China Southern Airlines plane was forced to land because "some people were attempting to create an air disaster." The flight had taken off from Urumqi, the capital of the Xinjiang Uyghur Autonomous Region, and militants had attempted to hijack the plane but were foiled by the flight crew, according to officials. [CNN / LA Times].

Malaysia forcibly returned at least 11 Uyghurs on 6th August 2011. On the same day, the Thai government turned over an ethnic Uyghur, Nur Muhammed, to Chinese diplomats in Bangkok. And on 8th August, Pakistan deported five blindfolded and handcuffed Uyghurs, including a woman and two children, to China, media reports said. It is unclear whether these individuals had any connection to separatist activities, but such deportations certainly raise the finger of suspicion.

Structural failure

One main theory is that there was a catastrophic failure of the aircraft. An FAA [Federal Aviation Administration] had earlier approved an order asking that hundreds of 777s be checked for cracks and corrosion issues. The concern was that should these problems go undetected, they could potentially lead to decompression problems or a "loss of structural integrity of a plane", essentially resulting in a break-up mid-air [CNN].

A sudden depression in the cabin could have resulted in the pilots falling unconscious sending the plane well beyond the current search zone as it flew on autopilot before running out of fuel.

Malaysian authorities dismissed such possibilities saying the aircraft had been inspected in February and given an all-clear. The FAA warning also seemed to reject this possibility. The warning related to the fuselage skin underneath an adapter for the airplane's satellite communications antenna something that was not fitted on the 777-200ER Malaysia Airlines aircraft, and as such was not subject to the FAA order, Boeing said [Reuters].

Suicide

Another theory being discussed is pilot suicide, and there were suggestions that authorities had begun to investigate the backgrounds of the crew. However Malaysian officials denied they had searched the homes of the pilots. Meanwhile, police sources said they had questioned the pilot’s family and were investigating if there were any underlying mental or psychological issues [News.com.au / Daily Mail].

There have also been reports that the co-pilot at the controls of the missing Malaysia Airlines flight MH370 had invited a Melbourne tourist and her friend into the cockpit where he smoked, took photos and entertained the pair during a previous international flight. Fariq Abdul Hamid’s behaviour has certainly raised eyebrows, especially in a post-9/11 world where the integrity of the cockpit is now considered to be off limits to passengers on security and safety grounds [Guardian / News.com.au / Nine MSN]

Confused information

There has been much criticism, especially from China, concerning the information coming from Malaysian officials. Information has been sketchy, confused and contradictory at best.

There have been reports the plane turned back and that military radar had tracked the aircraft to the Malacca Strait, hundreds of kilometres to the west of its last reported position. But these reports were later quashed by another military spokesperson [NBC].

The confusion has resulted in searches being conducted in areas that may not have been necessary. But Malaysian authorities have defended their efforts. “This is a crisis situation... and a complex situation,” a spokesman said Thursday before adding, “We have not done anything to jeopardize this search effort”.

Extensive search

That search effort has been extensive and involved many nations. Much of the search has been conducted conventionally with the use of planes, boats and helicopters. Several nations have sent warships and aircraft to the areas where flight MH370 may have gone down but some 6 days after the plane disappeared there has been no sign of wreckage.

However there are many who believe that the search has been hindered by imprecise, incomplete, and sometimes inaccurate information which have raised doubts about the aircraft's possible location and trajectory.

The searches have also stretched to hi-tech methods. On Wednesday China released satellite images taken on Sunday morning, a full 24 hours after the Malaysian flight disappeared. However, soon after the pictures were posted to the State Administration for Science, Technology and Industry for National Defence (SASTIND) website, the portal became inaccessible for several hours.

Meanwhile news stations poured over the images and debated their veracity, the poor image quality and timing of their release. There were questions over whether the images truly showed wreckage of the missing Boeing 777-200ER. Given the dimensions of the supposed debris some commentators on CNN were sceptical that the images showed parts of an aircraft at all. The estimated size of one piece was 24 metres by 22 metres, too large to be a part of the plane.

There was also a debate over why it had taken more than three days for the Chinese to release the images and a discussion as to why the images were so fuzzy. There was some suggestion that the photographs had been deliberately doctored in order to hide China’s satellite capabilities.

There was a sense that the position of the supposed debris was correct given the last reported position of the aircraft and the prevailing currents. However, by Thursday China said they had released the images by mistake [BBC]. Furthermore, a search in the area concerned proved fruitless.

Crowd-sourcing

There have also been crowd-sourced searches for the missing plane. Digital Globe,  a commercial vendor of space imagery, set up a portal through which Internet users could browse through satellite photographs and mark objects which might show signs of the aircraft [Telegraph].

As well as satellites even the International Space Station has been employed, training cameras on the region, though sifting through all these images can take hundreds of man-hours and even then one could miss any potential evidence.

Wake-up call

While the cause of the disappearance of flight MH370 has yet to be established, the incident should serve as a wake-up call on a number of levels.

In respect to security, there has been a major failure in allowing two individuals to board the plane using stolen documents. These two men should have been stopped and apprehended upon their arrival at Kuala Lumpur airport. However, Malaysia failed to check the passports against a list maintained by Interpol. The number of names is significant, more than 39 million according to Interpol themselves. But the organisation said only a handful of nations, amongst them the UK, USA and UAE, bother even to check names and numbers on a routine basis.

Another concern is the issue surrounding flight data. The main problem surrounding the search for flight MH370 has been determining where it might have gone down. The problem might well have been made much easier should a constant stream of telemetry be broadcast as routine from international flights. While some modern aeroplanes are fitted with such equipment it is not mandatory.

There also needs to be better coordination between different agencies and countries. There have been several erroneous reports concerning what was transmitted from the aircraft and where it was last spotted either by its transponder or radar. Indeed this has led to confusion which may well have impeded search efforts.

Human tragedy

Almost forgotten in the fog of disinformation are the passengers of flight MH370.

There were 227 passengers, including 153 Chinese and 38 Malaysians, according to the manifest. Seven were children. All 12 crew members were Malaysian.

Families have expressed frustration at not receiving enough information and there have been angry scenes at daily press conferences in Beijing where relatives of the 153 Chinese on board the stricken plane have gathered.

In Australia too there have been criticisms coming from family members of seven passengers aboard the plane. The pain and anguish is likely to continue until evidence concerning the whereabouts of the Malaysian aircraft emerges.

Like Air France flight 447 it could take months if not years to find out what happened to the ill-fated flight of Malaysian Airline flight MH370 [BBC]. This delay and the not knowing will only make it harder for those who have lost their loved ones.


tvnewswatch, London, UK

Kunming terror attack leaves dozens dead

An attack on civilians at a train station in China has left at least 30 dead and more than 100 injured. It is the worst single terror attack, believed to have been carried out by Muslim separatists, China has seen in recent history.

The attack occurred at about 9:20 p.m. Beijing time, on Saturday 1st March, which saw at least ten attackers using long-bladed knives to stab and slash passengers.

According to initial reports about twenty had been killed, though the death toll swiftly rose to 33, amongst them four assailants who were said to have been shot by armed police.

State media said the attackers were Xinjiang militants, though there was no immediate claim of responsibility.

Escalation

The attack is an escalation of attacks believed to have been perpetrated by the Turkestan Islamic Party, sometimes referred to or linked with the East Turkestan Islamic Movement. The group, which has claimed responsibility for several attacks in the past, want independence from China.

Xinjiang has seen decades of tension with many people of Uyghur ethnicity having struggled to be an independent country.

A group of Uyghur separatists claim that the region, which they refer to as East Turkestan, is not legally a part of China, but was invaded by the PRC in 1949 and has since been under Chinese occupation. The separatist movement is led by Turkic Islamist militant organizations, most notably the East Turkestan independence movement, against the national government in Beijing.

The group have previously claimed responsibility for bomb attacks in Kunming in 2008 [tvnewswatch: Kunming hit by terror attack / tvnewswatch: Internet access blocked after Kunming attack / tvnewswatch: Islamic terrorism growing in China / tvnewswatch: Kunming bus bomber identified police say] and more recently an incident where a four wheel drive vehicle was deliberately driven into a crowd in Tiananmen Square in October last year [Wikipedia / BBC / SITE Intel Group].

China's 9/11

Given the seriousness of last week’s attack at Kunming station, some Chinese media referred to it as China’s 9/11. While the scale of the attack was much smaller, it was nonetheless significant in that it showed a rise in Islamic inspired terrorism.

The west has often itself been blamed by Chinese media for bringing about the 9/11 attacks through its foreign policy. Even amongst many Chinese there was a sense of excitement on seeing the Twin Towers being struck by planes and subsequently collapsing.

There were reports of people cheering while watching footage of the collapsing towers and some even let off fireworks. Donnie Wang, a project manager from Chongqing, who was 16 at the time, told the state run Global Times of his recollections. He spoke of the reactions of parents and teachers at his school when hearing the news. “Their jaws were flapping all the time and the burst of excitement was quite clear,” he said.

Of course there was a backdrop of resentment that had built over many years. Two years earlier, five American bombs had hit China’s embassy in Belgrade, killing three Chinese. And only months before the 9/11 attacks a US reconnaissance plane had collided with a Chinese fighter jet off the coast of Hainan, killing the Chinese pilot [See also: YouTube / Free Republic / SFGate].

A decade on, those who cheered the attack on America, in which more than 3,000 died, may well feel a sense of shame. Now China is feeling the wrath of Islamic extremists inspired by a similar ideology.

There can be no excuse for such attacks, though there may be some who will feel China has fuelled the fire by its oppression of the Uyghur people.

Reaction

Following 9/11 the Chinese President Jiang Zemin said he was "shocked" and sent his condolences to President Bush, while the Foreign Ministry said China "opposed all manner" of terrorism. And despite some Chinese having celebrated of the attacks, tens of thousands of people visited the US Embassy in Beijing, leaving flowers, cards, funeral wreaths and hand-written notes of condolence on the pavement.

They like many saw, that whatever the policy of the US government, the victims were innocent members of the public.

And so too of the terror attacks in Kunming and elsewhere. While the anger of the Xinjiang separatists might be directed towards the Chinese government, the victims have been ordinary Chinese people going about their everyday business.

Families have been torn apart, some left childless with several children reportedly amongst the victims. Others will be maimed for life, and few will fully understand the reason behind the attacks given how strictly controlled the media is in China. Indeed few will have any real knowledge about Xinjiang and the internal struggles that continue.

Censored news

In fact there will be many in China who may have missed the news of Kunming’s terror attack entirely. Whilst there was some coverage in the regional press with the Kunming Times carrying the story on its front page, for papers outside the region there was scant mention, if any, of the incident.

The Hong Kong based South China Morning Post reported that there was no mention of the attack in Beijing News, Beijing Times or Beijing Youth Daily, and the CCTV evening news did not report the attack. Where news stations did mention the attack it was only briefly referred to. Photos of the attack, many extremely graphic and taken by members of the public, were also swiftly deleted by censors from microblogs and social media.

English language media did report more extensively with the Global Times saying "a nationwide outrage has been stirred... [by] China's '9-11'" Hard to see how a whole nation was outraged, given many may well be oblivious to the attack.

Official response

While the media downplayed the attack, there were nonetheless statements issued by the CPC general secretary Xi Jinping and Premier Li Keqiang who assigned Meng Jianzhu, Secretary of the Central Politics and Law Commission to oversee the investigation. Meanwhile Lü Xinhua, spokesman for the second session of the National Committee of the Chinese People's Political Consultative Conference denounced the attack as a "serious violent terrorist attack [perpetrated by] terrorist elements from Xinjiang."

Abroad, the attack did make the news, though was much obscured by the growing tensions in the Ukraine.

Surprisingly, there were few public messages of condolence. The UN Secretary-General Ban Ki-moon strongly condemned the attack and expressed condolences to the bereaved families. Dilxat Rexit, a spokesman for the World Uighur Congress also condemned the attacks, saying he denounced "any form of violence", and urged the Chinese government to "ease systematic repression".

The French also released a statement expressing “solidarity” with the Chinese people, but that was about the extent of a world wide response.

Indeed, there was almost stony silence from the US, most European countries and others. Perhaps that says volumes for how some see the incident; a symptom and reaction to China’s brutal domestic policy.

More reports: Wikipedia / BBC / BBC / BBC/ Sky News / Guardian / Telegraph / Daily Mail / Mirror / FT / WSJ / LATimes / LATimes / China Smack (Graphic) / LiveLeak (Graphic)

tvnewswatch, London, UK

War of words as nations argue over human rights

In the history of the world there have been abhorrent abuses of people’s human rights. The abuses of medieval ages are past, but well into the 21st century human beings are still subject to torture, unjust incarceration, harassment or worse.

Such abuses are often detailed in reports from various organisations, including Amnesty International, Reporters Sans Frontières and Liberty.

Nation states also release reports detailing such abuses. However such reports often stir up consternation with other countries cited in such reports. At particular loggerheads are the United States and China who often engage in a tit-for-tat war of words over human rights abuses, amongst other issues.

US points finger at Syria, Russia & China

This week the US’s Bureau of Democracy, Human Rights and Labor published its annual Country Reports on Human Rights Practices for 2013 [BBC].

This year is particularly poignant since it is marked by the 65th anniversary of the Universal Declaration of Human Rights. But as the papers released by the State Department clearly detail, human rights abuses still continue.

While the main focus was the ongoing rights abuses in Syria, particularly singled out in the US report were Russia [PDF], that “continues to curb civil society and political opposition and target marginalized populations, including religious and ethnic minorities”, and China [PDF] for its “lack of judicial independence” which the US said “has fueled a state-directed crackdown on activists and suppression of political dissent and public advocacy.” 

In addition to the US report the US Ambassador also added his voice to the debate and called on China to respect human rights [Daily Mail].

But Russia and China were just to two biggest countries accused of abusing human rights. Ukraine which has seen a turbulent few weeks was also detailed in the report with its former government accused of exerting “increased pressure on civil society, journalists, and protesters calling for government accountability and a future with Europe.”

There were also concerns raised about Cuba and Egypt where their respective governments also “used excessive force to quell peaceful protests and dissent.” [Summary PDF]

China upset at "arbitrary & irresponsible attacks"

China, it appears, took umbrage at the US report and responded with its own dossier detailing the abuses by the United States [VoA].

In its response, published via China’s state run news agency Xinhua, the State Department of the United States was criticised for making “arbitrary attacks and irresponsible remarks” on the human rights situation in almost 200 countries and regions.

“The US carefully concealed and avoided mentioning its own human rights problems,” Xinhua notes, and goes on to list what it calls “serious human rights problems in the US”.

It talks of America’s lack of personal security due to the “increasing number of violent crimes in 2013 with frequent occurrence of firearms-related criminal cases.”

“American citizens' lives and personal safety are threatened by an increasingly dangerous environment,” the report states. 

The Xinhua report points particularly at US surveillance of its citizens, highlighting the revelations exposed by whistleblower Edward Snowdon.

“The US government took liberty in monitoring its citizens, which shocked the world,” the article lambasts.

China also accused the US of tortures in its prisons and claimed that electoral systems were “plagued by malpractices and inefficiency”.

The US is accused of flagrant disregard for life with its drone strikes in Pakistan and Afghanistan which have left countless civilians dead or maimed.

Truth & contradictions

Both reports have certain elements of truth, but just as China accuses the US of having “carefully concealed and avoided mentioning its own human rights problems”, so too did China fail to acknowledge its own breaches of citizens rights.

Indeed both nations could be accused of being a pot calling the kettle black.

The US democratic system is perhaps far from perfect, and there may well be instances of corruption. However there is no democracy in China at all and little if any way of seeking help or representation from one’s politicians. In fact any attempt to lobby or petition the Chinese government often results in a prison sentence.

It might also be true to say that many people are badly treated with the United States’ prison system Indeed, the Guantanamo detention facility did nothing to raise the image of the country in the eyes of civil rights campaigners.

However, China locks many people up in appalling conditions, following trial which are far from open and just.

As for monitoring and surveillance, both nations are as guilty as each other. In fact all nations may well carry out surveillance in order to protect its interests. What is different is that in the west, Snowdon’s revelations are public and open for debate. Similar discussions in China would likely be deemed as “subversion of the state” and result in lengthy prison sentences for any transgressors. Can one imagine an organisation similar to the ACLU, with its slogan “Because Freedom Can’t Protect Itself”, existing in China?

Casting stones

The use of drones is certainly a valid criticism. But for a nation that fails to recognise or even acknowledge the 1989 Tiananmen massacre, which left hundreds dead, or the great famine that saw millions die in the late 1950s and early 1960s, such criticisms are rather hollow.

The Cold War, and war of words that once used to exist between the West and Russia certainly seems to shifted further east.

But both sides need to take stock concerning these issues. Perhaps they might take note from scripture. As Jesus is once quoted as saying, "let he who is without sin, cast the first stone" [John 8:7]. The contect of his statement may have been different [See Wikipedia] but the basic principle stands.

tvnewswatch, London, UK

Virtual currency concerns as MtGox shuts shop

This week saw a tumultuous upset in the currency market, though it was a story mostly consigned to the business columns of financial broadsheets. The story was that Bitcoin, a virtual currency, may soon be consigned to the virtual scrapheap [Telegraph].

MtGox shuts down

One of the biggest Bitcoin Exchanges, MtGox, had gone offline and was informing its customers that “in light of recent news reports and the potential repercussions on MtGox's operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users.”

The exchange had already been hit by technical issues and recently halted all customer withdrawals of the digital currency after it spotted what it called "unusual activity".

But while six other major Bitcoin exchanges issued a joint statement distancing themselves from MtGox, the move to shut down such a large enterprise is a setback for backers of Bitcoin, who have been pushing for greater adoption of the currency.

The Bitcoin has had a shaky history, least of all to do with the security issues that are intrinsically tied into a virtual currency. Only days before MtGox shut shop the Financial Times was questioning whether the currency was “brilliant or bonkers”

The virtual currency went up 5,580% in price last year, which rather puts 30% equity market returns in their place, the FT’s New York correspondent Stephen Foley observed.

Such increases have raised eyebrows and prompted some individuals to make potentially unwise financial decisions. A growing number of people have been asking “what is Bitcoin?” and “should I buy some?”- but at Foley suggests, not necessarily in that order.

Given the unease concerning security, potential DDoS attacks on servers, reports of Bitcoin theft and huge fluctuations in Bitcoin’s value, one might have thought most rational people would have steered clear. Granted, it is not easy for governments to trace, thus the virtual currency has been linked to tax evasion, money laundering, and various transactions connected to illegal activity from drugs to arms dealing. As such governments are looking carefully at how they might control Bitcoin.

Crypto-currencies

Bitcoin was created in 2008 by a mysterious computer scientist with the pseudonym Satoshi Nakamoto, who conceived it as an alternative to government-controlled currencies and a means to transfer money quickly, cheaply and anonymously outside the slow, expensive and highly regulated international banking system.

Bitcoins are no more unusual in theory than Air Miles, Nectar points, or credits in online games, except that they can be transferred easily between people and used to pay anyone who wants to accept them, giving them greater currency than loyalty schemes.

The supposed maximum ceiling is 21 million Bitcoins, a built-in scarcity, a little like the gold standard, which is one of the main reasons the price has been driven up, as speculators anticipate greater use of a fixed pool of currency.

However after MtGox went offline the price dropped as concerns rose as to the future of the currency [BBC]. Others who trade in the currency tried to mitigate the damage. The closure of the site did not "reflect the resilience or value of Bitcoin", said a statement from representatives of several other Bitcoin exchanges, including Coinbase and BTC China.

"This tragic violation of the trust of users of MtGox was the result of one company's actions.

"As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.” [Business Week]

Repercussions

The Bitcoin might not quite be dead, but its value has slumped in the last month by almost half. Indeed it may well be a life or death moment for this virtual coin [BBC].

The latest reports have perhaps hit home and warned off investors about what some are calling the most dangerous currency in the world [Telegraph].

But Bitcoin isn’t the only virtual currency. An interesting graphic posted by the FT on its Google+ page illustrates several other currencies such as Catcoin, Dogecoin, Litecoin, Peercoin and Nxt.

Whether these virtual cryptocurrencies are any more or less secure, the MtGox shut down has affected them all [IBTimes].

According to the website CoinMarketCap, which monitors the market capitalisation of all cryptocurrencies, the various digital currencies have shown drops of anywhere between 10% and 40% for the digital currencies listed.

As regards the Bitcoin itself it has seen its value rise from $14 for a single Bitcoin to around $850 throughout 2013. But such large inflation has prompted many analysts to suggest short-term speculation is creating a Bitcoin bubble.

And where there are bubbles, there are often crashes. The danger is that even a crash in a virtual currency could cause fluctuations in real financial markets, depending how much money is tied up in the virtual currency.

Concerns

Governments are perhaps rightly cautious about these new virtual currencies, not only because of the legal concerns, but also for knock-on effects on the real economy should these cryptocurrencies fail [Guardian].

But it is not just economists and governments that are raising concerns. Many comments on social networks show that the general public are still quite sceptical about such currencies.

As one man wrote on the FT’s Google+ page, “I am not an economist, but I was much happier when money was based on some physical and tangible commodity like gold. If we decide money is whatever we accept as money then  we may as well go back to barter or collecting sea shells.”

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Dalai Lama visit prompts war of words with China

China has once again been flexing its muscles and either dictating, or attempting to dictate, the new agenda this week.

Even before the Dalai Lama stepped off the plane in the US this week, China was already rattling a sabre saying that there would be consequences should President Obama meet with the spiritual leader.

Of course such threats were largely ignored by Washington, and were essentially out of China’s control.

Media controls

Meanwhile in China itself, authorities clamped down on media freedom once again, blocking CNN several times throughout the week during its In China series which focused on press freedom.

The roundtable discussion, hosted by CNN’s Kristie Lu Stout, featured The Wall Street Journal’s China bureau chief Charles Hutzler, Foreign Correspondents Club president and Christian Science Monitor correspondent Peter Ford, and Hong Kong University journalism academic Ying Chan.

However, the show was blocked within minutes as it went to air on Wednesday [The Australian]. It is perhaps unsurprising in a country that blocks most western social media websites and controls most of the news output at a central level.

China is ranked at 173 in the most recent World Press Freedom Index due in part to its track record for imprisoning journalists and censoring the Internet The situation also shows little sign of improving. There is no free discussion or an ability to air opposing views without attracting the attention of the authorities.

Reporting risks

Those that attempt to bring change often find themselves in court and imprisoned for years on end. Last month activist Xu Zhiyong found himself in court accused of having "gathered a crowd to disturb public order" after a series of small protests where demonstrators had unfurled banners in Beijing calling for officials to publicly declare their assets [CNN].

Western media who attempted to cover the trial found themselves targeted by police who manhandled several TV crews. A CNN crew was prevented from approaching and filming the court house and CNN's Beijing correspondent, David McKenzie, was kicked, pushed and punched by Chinese security before being forced into a nearby van and driven away.

“The government makes it much more difficult” to cover “the big stories” The Wall Street Journal’s China bureau chief Charles Hutzler told CNN. “And it's gotten much worse in recent years," Hultzer added [CNN].

While western media battles to get the news, it doesn’t face the problems experienced by China’s growing number of investigative journalists. They face battles not only in finding the truth behind the countless number of corruption cases, but also a battle in getting the story published.

Censorship, threats & violence

One such investigator, Wang Keqin, says the biggest problem he faces is not the threats, but the censorship imposed either by the media outlets themselves or the authorities directly.

“China today ought to be a paradise for investigative journalists, the unprecedented amount of shady deals that are happening here is beyond your imagination.” However, Wang has been warned off by officials, paid thugs, and many editors refuse to touch his stories.

He is one of a number of investigators who have been forced out of their jobs. But Wangs says this is only part of the problem. “Our biggest enemy is not physical threats, it’s censorship.”

“What they really need is a good editor in chief who’s willing to sacrifice for the story.”

For western journalists too there is a cost to trying to report the story. In recent years photographers and cameramen have particularly become the target of violence where in some cases their cameras are confiscated or smashed.

There are also inhibiting effects of so-called visa wars where journalists and reporters have had their visas refused or revoked. Both Bloomberg and the New York Times faced restrictions following the publication of stories which highlighted the financial affairs of top politicians and their family members.

Propaganda war

Clearly there is a propaganda war too. And the Dalai Lama’s visit highlighted this very strongly as Xinhua published dozens of articles criticising US policy, the Dalai Lama himself and those who seek Tibetan independence.

But while western media might publish both points of view, China’s media tends only to air the sanctioned view of the state.

China called on the US to hold back from meeting the spiritual leader saying he was engaged in “anti-China secessionist moves” [Xinhua].

Indeed Xinhua went on to describe the White House as becoming a “bully pulpit for Tibetan secessionists” and said the decision to meet the Dalai Lama was “both regrettable and harmful” as well as marking “a flagrant breach of Washington's pledge to refrain from interfering in China's domestic affairs

In another commentary published by Xinhua, the meeting was dubbed a “lose lose deal” that would harm Sino-US relations.

No middle ground

“While it is doomed to fail in its attempt to press for "Tibet independence," or the "middle way" approach that the high monk preaches, the third Obama-Dalai Lama in five years, planned at the White House Friday, is certain to harm China-U.S. relations,” the commentary read.

The US went ahead with its meeting regardless, but did nonetheless acknowledge China’s concerns.

In a statement the Obama administration said it supported the Dalai Lama's "Middle Way" approach to the political tensions over protests for Tibetan independence.

"The United States recognizes Tibet to be a part of the People's Republic of China and we do not support Tibetan independence," said National Security Council spokeswoman Caitlin Hayden. "The United States strongly supports human rights and religious freedom in China."

"We are concerned about continuing tensions and the deteriorating human rights situation in Tibetan areas of China," Hayden added. "We will continue to urge the Chinese government to resume dialogue with the Dalai Lama or his representatives, without preconditions, as a means to reduce tensions."  [CNN]

China for its part rejects the Dalai Lama’s “Middle Way” and the US’s support for saying the approach is “at odds with China's constitution and state system in every conceivable way” and that “It is nothing but smoke and mirrors, camouflage and deceit.” [Xinhua]

The debates on this and other issues are fraught with problems. In China there is no real debate, indeed it is one sided, and opposing or dissenting views or opinions are blocked. In the West both sides of the debate may be covered and discussed, but such discussions will not effect any change.

Those who need to hear the arguments, indeed rarely hear the counter argument. It is a situation brought about by a state that fear change, or an upset to the status quo.

But perhaps with the ongoing political and violent protest seen in the Ukraine these last few weeks, Beijing is justifiably cautious in allowing too much debate.


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Scotland's long fight for independence

While Britain reels over the continuing bad weather than has seen hurricane strength winds and almost constant rain for weeks there is another storm brewing in Scotland of a political kind, that of Scottish independence.

The Scottish government set out its plan for how Scotland would operate as an independent country, subject to a yes vote in this year's independence referendum. The 670-page White Paper on independence was hailed by First Minister Alex Salmond as being "Scotland's future in Scotland's hands".

The re-balancing of Scotland's economy, by increasing manufacturing, is noted as a priority. But should Scotland become an independent state, it may face some serious challenges.

In the last few days all parties in Westminster have said the pound may not shared with the Scots [D Mail].

Indeed with independence, Scotland may find itself not only politically independent but financially independent. This could create problems on both sides of the border with Scotland having to decide whether to join the euro or creating its own separate currency.

Some small business owners feel that independence would be an attractive proposition whilst others believe independence may come at a cost. "On the face of it, I would say with regard to small businesses it looks quite attractive," one business owner told the BBC in November as plans for a referendum were published. Another voice raised concern, saying, "Can the country really afford it?" [BBC]

Long fight for independence

Scotland joined the union in the early 17th century following the Anglo-Scottish Wars, a series of wars fought between the Kingdom of England and the Kingdom of Scotland. This culminated with the Union of the Crowns in 1603.

This was the last major battle between the two Kingdoms, but Scotland had been warring with England for more than a thousand years prior to this. Indeed one of Scotland’s most famous characters in history is Robert the Bruce who won a major victory over the English in 1307 at the Battle of Loudoun Hill. Robert fought successfully during his reign to regain Scotland's place as an independent nation, and even today he is remembered in Scotland as a national hero.

However battles continued between both countries for the next three centuries until Scotland eventually succumbed to English dominance.

Now after some 400 years Scotland may be reasserting itself. But this time the battle battle will be fought at the ballot box rather than in a battle field.

Financial hurdles

For many Scots independence will be welcome. But economically there maybe many difficulties ahead. With Chancellor George Osborne having make clear that Scotland could not keep the pound, an independent Scotland will face many hurdles [BBC].

Speaking in Edinburgh, Osborne said, "The pound isn't an asset to be divided up between two countries after a breakup like a CD collection...If Scotland walks away from the UK, it walks away from the UK pound."

In such a scenario, an independent Scotland would be more exposed to risks from the "volatile" energy and finance industries according to some analysts.

However, it has been widely suggested that an independent Scotland would not be obliged to take a share of UK debts. This could be a contentious issue on both sides of the border.

The UK's national debt in January 2012 stood at £988.7 billion. This excluded bank bailouts. Scotland's GDP per capita is only slightly below the UK's average, standing at about 98.7% of the UK average, so it might be a reasonable approximation to divide this debt evenly by population.

Thus, given Scotland has a population of around 5.1 million of the UK's 62.2 million people, its share of the debt would be about £81 billion. However, UK debt has increased over the past two years and may rise further still.

Should an independent Scotland be obliged to pay off its past debts, there will undoubtedly be some resentment. Conversely, should Scotland be allowed to walk away from these debts, there may be just as much resentment down south.

The oil question

Alex Salmond has hinged much of his economic dream on North Sea oil. However, according to the latest monthly report from the Organisation of Petroleum Exporting Countries [Opec], the average oil output in 2013 from the North Sea registered its lowest level since 1977.

This represented a roughly 10% decline from the previous year of 90 thousand barrels per day [tb/d] and could undermine the arguments a number of Scottish nationalists regarding the North Sea oil and gas cash cow which would be available to Scots.

The revenues are significant, though the UK's Office for Budget Responsibility [OBR] predict oil revenue will drop from £6.7 billion in 2013 to £4.1 billion by 2017-18.

The bigger issue at hand is whether such reserves would willinngly be handed to an independent Scotland by Westminster. Under the present arrangement, oil tax revenues are assigned to an economic region set up by the UK government, which is called the UK Continental Shelf [UKCS].

This means that oil resources are not officially assigned to Scotland but instead to a region distinct from the British mainland.

But if Scotland were to become independent, and a sovereign state, it might expect the UKCS to be divided up on a "geographical" basis.

Westminster might try to negotiate a Median Line approach; drawing a dividing line on which all points are the same distance from the Scottish and rest of the UK coastline. This would be similar to the approach used to determine the boundary between Scotland and the rest of the UK for fisheries after devolution in 1999.

No discussion has yet taken place between the UK and Scottish governments on the detail of what would happen to oil revenues should Scotland achieve independence [BBC / Guardian / IBT].

Growing economy

Scotland’s GDP stood at £148.73 billion in 2013, though this included revenues from North Sea oil and gas. But even aside from energy reserves, its GDP is strong.

When thinking of Scotland many have images of Whisky, haggis and lochness monsters. But Scotland also has a thriving economy currently growing at around 0.7% per annum.

Beyond its claims on North Sea gas and oil reserves, Scotland also does well in agriculture, banking & finance, the computing sector, construction, fishing, shipbuilding, textiles, tourism as well, of course the production of its most famous of exports, Scottish Whisky.

Indeed whisky is probably the best known of Scotland's manufactured products with exports having increased by 87% in the past decade and currently contributing over £4.25 billion to the UK economy. Indeed should the UK's Office for Budget Responsibility [OBR] be correct in its projected drop in oil and gas revenues, whisky may surpass profits made from North Sea Oil ! [Wikipedia]

Scotland will likely do well on its own. The difficulties it will face will be more a psychological one as the North-South divide becomes a little wide with a potential rift growing between the English and Scots once again.

Forced to join euro?

Even without any real antagonism, England might feel even more isolated within Europe should Scotland join the euro. It would leave only Wales and Northern Ireland still using the pound, apart from a few outlying islands such as Guernsey, Jersey and the Falklands.

Scotland’s acceptance of the euro is a very real prospect, post-independence, at least according to some commentators. Writing in the Telegraph Andrew Lilico, an Economist with Europe Economics, and a member of the Shadow Monetary Policy Committee, suggests that Scotland would essentially be forced to accepting the euro if it wanted to remain in the EU due to financial rules already laid down.

At the end of the day it will be the Scottish people who will decide the direction they wish to go.  

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Floods hit east Britain

Those in the the east of Britain might have thought they had escaped the flooding that has plagued much of the south-west and brought misery to hundreds of thousand of families and businesses. However that all changed this week as incessant rain finally forced river levels up to the point where many burst their banks.

While not as serious as the situation seen in Somerset and other parts of the south-west, for many the resultant floods were just as upsetting and disruptive for many.

Essex was one of the worst hit counties in the east especially to the north-west of the county. The river at the picturesque village of Finchingfield burst its banks after torrential rain fell on Thursday night. By the following morning the village had a what resembled a large lake instead of a river. Teenagers joyfully cycled through the water which was more than a metre deep in parts, though local businesses looked on concerned as water levels lapped at their doors.

The B1053 which runs from Wethersfield, through Finchingfield, to Saffron Walden was almost impassable at many points and several vehicles became stuck.

The owner of one BMW needed the assistance of a local man to tow him to safety using his Range Rover after becoming stuck in water more than half a metre deep [pictured].

Many motorists failed to take the advice of the local fire service which were called to dozens of incidents where cars had become stranded. The Essex County Fire and Rescue Service urged drivers to exercise “a little common sense and consideration” when confronted with flooded roads.

Not only were drivers creating problems for themselves, they were also creating problems for others. Inconsiderate motorists continued to drive into water, creating waves which pushed water into homes near the road and in some cases trapping themselves, their passengers and their vehicles in the water.

Assistant Divisional Officer Dave Moore, who was on scene at several flooding incidents, said, “It beggars belief, we have signs telling motorists the roads are closed and instead of stopping and finding another way around they are accelerating into the water.”

“This creates a wave which pushes water from the road into people’s homes. It is both inconsiderate and stupid. There are fire crews, signs saying the road is closed and deep water in the road and that is not enough to stop people driving into water.”

Just 60 cm of water is enough to float a car and 15 cm of water will reach the bottom of most passenger cars. This depth can cause loss of control or possible stalling as water is sucked into the exhaust or washes into the air intake. “When confronted with flood water the best thing to do is to find an alternative route,” ADO Dave Moore added.

Fire crews meanwhile attended multiple flooding incidents in the Saffron Walden, Newport and Stansted areas of the county. In Saffron Walden soldiers from the nearby Carver Barracks added support to those affected by the floods, helping to sandbag properties [BBC].  

The occupants of 20 flats in Radwinter Road, Saffron Walden, were helped to safety by fire crews. Across the north of the county thousands of pupils were also affected having been sent home because of the flooding.

Meanwhile the Environment Agency issued flood warnings for five rivers; the Stour, Brook, Chelmer, Colne and Box. The flood risk is unlikely to diminish in the coming days as the Met Office forecast heavy rain for much of next week.

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Ten injured after explosion at Essex house

Ten people were injured in a suspected gas explosion that virtually destroyed two houses on a street in Clacton, Essex.

A man in his 70s and a woman in her 50s were badly burnt in the fire that followed and were flown by an air ambulance to Broomfield Hospital in what was initially described as a serious condition. Both were later said to be "stable".

Emergency services were on the scene with minutes of the blast, though some local residents had already mounted their own rescue attempts dragging victims from the wrecked houses.

Debris was strewn over a wide area and into adjacent streets damaging cars and breaking windows of several houses. A power outage also forced the local school to close. Police evacuated several homes close to the scene though most were allowed to return later in the day.

Fearing there might be others buried beneath the rubble Search and Rescue teams scoured the scene with dogs. Fortunately no further people were found.

All the emergency services described it a miracle that no-one was killed. Meanwhile late into Wednesday evening Essex police were continuing to work with Essex County Fire & Rescue Service to establish the cause of the explosion.

BBC / Guardian / Telegraph / D Mail / Mirror / Daily Star / Express

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Banker "targeted" in shooting at Essex station

A 44-year-old banker was shot in a station car park in what police believe was a targeted attack. The man received a gunshot injury to the leg after the assailant wearing a balaclava shot him before fleeing the scene.

The victim, who has been named as Robin Clark, a broker with City firm RP Martin, got out of his car in Mount Avenue car park behind Shenfield station, Essex, and was approached by a balaclava-wearing man at around 05:51 GMT. He was taken to Basildon hospital to receive treatment, though police said his condition was not life-threatening.

Meanwhile police carried out a detailed examination of the scene before removing Mr Clark's vehicle, a Ford S-Max, on a lorry. Speaking about the incident Detective Superintendent Gary Richardson said, "At this stage we believe the victim of this assault was deliberately targeted."

"We do not believe this incident was gang-related and I would like to reassure the public that there is no reason for any undue concern," he added.

Trains running through the station were disrupted and a number of services were cancelled while investigations were conducted by police. However services resumed at about 07:00 GMT.

Many commuters also faced problems parking as the main railway station car park remained closed for much of the day.

© tvnewswatch, London, UK

Dotted lines, slowing economy and cigarette bans

China's economy is slowing or, as some media outlets have described it, stabilising. But the country faces many troubles ahead, financially, politically, territorially and domestically. With potential property bubbles, a rise in corruption, a risk of clashes in the South China Sea and growing pollution, the future looks extremely uncertain. With all that stress a proposed ban on indoor smoking might be a step too far.

Slowing economy

According to official data China's 2013's growth rate matched that for 2012. Gross domestic product (GDP) grew at an annual rate of 7.7% in the October-to-December period, down from 7.8% in the previous quarter. Nonetheless it was still higher than the government's target rate of 7.5%.

Monday's announcement of another lackluster economic performance struck investors hard. To many in the west, where growth of 2% would be considered an achievement, China's numbers may still inspire awe and envy. However China's ailing performance might be of some concern given it has routinely seen 10% growth a year since the 1980s. On the surface it may appear worrying but China's steady growth through the Great Recession of 2008 helped prevent the entire global economy from slipping into an even more destructive downturn.

These are the views of many financial analysts, though there are some who believe that all is not what it appears to be.

Economic concerns

China is well known for having an opaque political system. But its financial system too is far from open, and given that statistics are compiled and issued by state bodies there is scepticism amongst some that the whole truth is not being told.

Writing in Forbes only days before China released its annual financial report Gordon Chang spoke of issues that could devastate the Chinese banking system and the larger economy as well. In short, wrote Chang, "China's growth since the end of 2008 has been dependent on ultra-loose credit first channelled through state banks, like ICBC and Construction Bank, and then through the WMPs [Wealth Management Projects], which permitted the state banks to avoid credit risk."

"Any disruption in the flow of cash from investors to dodgy borrowers through WMPs would rock China with sky-high interest rates or a precipitous plunge in credit, probably both. The result? The best outcome would be decades of misery, what we saw in Japan after its bubble burst in the early 1990s."

Chang is not the only one to raise concerns. Al Jazeera reported that shadow banking - non-transparent, less regulated credit - could stoke asset bubbles and threaten stability. Indeed, one of the biggest worries for Chinese policy makers has been the rapid increase of debt, much of it channelled through a loosely regulated shadow banking system.

Rising debt

Furthermore there are increased concerns that burgeoning local government debt will only add to China's economic problems.

"Borrow and spend, or in China's case, borrow and invest, works great to prop up growth for a while but eventually debt rises, investment becomes less productive and the risks rise," says Steven Barnett, division chief at the International Monetary Fund, who covers China.

There is also the growing concern of a crash in property prices if the housing market bubble bursts. This is highly possible given the saturation of empty properties sitting idle across China, bought up by individuals and corporations as an investment. Should the price of property crash millions would find themselves in negative equity. The consequences could spiral out of control and make the sub-prime mortgage fiasco in the US, that triggered the 2008 downturn, look like a mere blip [BBC / Time].

Rise in nationalism

Faced with devastating economic problems, massive unemployment, bankruptcies and a property crash, president Xi Jinping is rallying support under the flag of nationalism and once again wielding the Communist sledgehammer [American Thinker].

China's radically undervalued Yuan currency has allowed the country to import manufacturing jobs and export low-priced products under a form of state-sponsored capitalism called "Socialism with Chinese Characteristics".

From 1993 to 2008, China's economy quadrupled, raising 500 million people out of abject poverty. The US economy only doubled, while Europe's rose by just half and Japan stagnated. Now there are concerns that could all become unravelled in a matter of years.

However, China's growth could receive a boost from one unexpected source as demand for Chinese exports from strengthening developed economies, led by the US, picks up in 2014, Jamil Anderlini writes in the Financial Times.

In the years since the financial crisis, China's economy has become less dependent on exports than it once was, and slowing investment and shrinking overcapacity should more than negate any positive effect from stronger trade, Anderlini suggests. But China's economic future is far from certain.

Dotted lines

Another issue that raises concern and uncertainty is the territorial dispute in the South and East China Sea.

In the last month concerns were raised further after China implemented new rules which required all foreign fishing vessels seek Beijing's permission to operate in most of the South China Sea. The US called the rules "provocative" [BBC]. Meanwhile some countries directly affected by the new rules responded in other ways. For the first time since Vietnam clashed with China some 40 years ago in a territorial battle, the country announced it would mark the occasion with a memorial to the dozens of Vietnamese soldiers who were killed in the bloody battle [BBC].

Meanwhile a government spokesperson in Hanoi called the new regulations "illegal and invalid" and stated, "Vietnam demands that China abolish the above said erroneous acts, and practically contribute to the maintenance of peace and stability in the region." [Yahoo News]

In Chinese state media there have been continued dismissals of those criticising China's territorial claims. In one article published by Xinhua it was claimed that the South China Sea rules were no threat to peace, this according to "experts."

Those "experts" were, needless to say, academics belonging to state run bodies.

One such "expert" quoted in the article was Wu Shicun, president of the National Institute for South China Sea Studies. He insisted that China's claim, defined by the South China Sea "nine-dash line", was established long before the United Nations Convention on the Law of the Sea took effect.

"In accordance with the intertemporal law, the nine-dash line should be recognized by the international community," Wu said. "The waters that China claims had been under Chinese jurisdiction long before the United Nations Convention on the Law of the Sea was established [in 1982], and therefore should be taken into consideration," he added.

Drifting pollution

Closer to home Xi Jinping is facing another battle to curb the ongoing threat of industrial pollution. Not only is it directly affecting China's citizens' health, it may also be affecting their wealth. New statistics appear to show that tourism has dropped, partly due to the rise in air pollution.

The "Green Book of China's Tourism" issued by the Chinese Academy of Social Sciences said revenue at hotels with a three-star rating or above dropped by nearly 12% in the first half of 2013, compared with the same period in 2012. Foreigners' reluctance to come to China was attributed by researchers to poor travel services and damage to tourist cities' reputations because of air pollution, food safety scandals and traffic congestion, the South China Morning Post reported.

But those staying at home may not escape Beijing's smog it has been revealed. According to several articles published in the last few days China's pollution is drifting across the Pacific Ocean and arriving on American shores.

The US study, upon which the reports were based, suggests that up to 25% of the sulphates found in the air of cities on the western seaboard may have originated in China [Daily Mail / Business Week].

Smoking curbs

Back in China many face more localised pollution in the form of cigarette smoke. But lawmakers are about to curb smoking in enclosed spaces, though such attempts have failed in the past. Recent reports suggest that by the end of 2014 those wishing to light up will have to go outside, a practice now seen the world over [SCMP].

China ratified the World Health Organisation's Framework Convention on Tobacco Control in 2005, but missed the deadline to honour it by 2011. The latest announcement, published in state media, indicates that China may be more serious in its commitment [Xinhua].

So far only a few cities have implemented the 2011 rules, but they are rarely enforced and often flouted [Guardian].

About one in three cigarettes smoked in the world is smoked in China, according to the World Health Organization. And more than half of Chinese men smoke, according to the Global Adult Tobacco Survey in 2010. China had the highest number of smokers in the world in 2012 with 281 million, about one-third of the world's smoking population. A report late last year by the state-run broadcaster CCTV [CNTV - Chinese] put the number of smokers in China around 350 million [NYT blog].

The statistic in themselves will make it difficult for authorities trying to impose such a ban. While many comply with no smoking bans in hospitals, stations, airports and buses, in other places notices are simply ignored. It is quite common in Beijing, for example, to see a 'no smoking' sign placed adjacent to an ashtray on a restaurant table.

Meanwhile even where restaurants do enforce the ban more strictly patrons often either blatantly ignore the restriction or smoke in the toilets.

Tax loss

With such a large percentage of the population smoking, China could face unrest should such a ban be imposed. Furthermore the country could face big financial issues. Some of China's provinces rely heavily on tobacco. Yunnan province, for example, produces around 40% of China's entire tobacco harvest, the sales of which account for around 45% of the provincial government's tax revenue. And while cigarettes are not taxed as highly as in the west, tobacco taxes account for a tenth of central government revenue.

There are also social issues. Tobacco companies often sponsor and fund schools, ironic given the health concerns, and any drop in revenue could have a knock on effect on many children's education.

But Dr. Judith Mackay, the senior adviser at the World Lung Foundation, who examines tobacco issues in China, says that there are far more important considerations. "This isn't a health problem. It's a huge economic problem. There's all these things ranging from medical and health care costs, the costs to the families and there's the cost of second-hand smoke," she told CNN.

It may be that the new rules will not be applied strictly, as was seen in 2011. Indeed with the risk of losing tax revenue, angering 250 million smoking men and potentially running some businesses into the ground [as was seen when the smoking ban was implemented in the UK as hundreds of pubs saw their custom drop], Xi Jinping may be more focused as waving the nationalist flag, asserting dominance in the South China Sea and stabilising the economy.


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