China’s Rising ‘Working Class Insurrection’ Problem

China’s Rising ‘Working Class Insurrection’ Problem

Tyler Durden on 05/22/2014 20:27 -0400

Last week we highlighted the stunning images of China’s “fists and daggers” police force training for a “working class insurrection.” It appears to be good timing, given last night’s terrible blasts in Urumqi. The chart below shows the worrying escalation in social unrest in China – at a time when the leadership is pushing a “strike first” anti-terrorist policy that appears to be failing badly. The “serious violent terrorist incident” that occurred last night in Urumqi, killing 31 and injuring 94, was the worst in years and prompted domestic security chief Meng Jianzhu to vow to strengthen a crackdown on the “arrogance of terrorists,” but, as one analyst warns tightening controls on the Uighur region may be “smacking them in the face.”

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As Reuters reports,

The Xinjiang government could not be immediately reached for comment, but China’s Foreign Ministry spokesman Hong Lei said the attack “should be condemned jointly by the Chinese people and the international community”.

“The Chinese government has the confidence and the ability to combat the terrorists,” Hong said at a daily news briefing. “These terrorists are swollen with arrogance. Their schemes will not succeed.”

In a posting on its Chinese-language microblog account, the U.S. Embassy said it offered condolences to victims of the “violent attack”, but stopped short of labeling it terrorism.

In contrast, Russian President Vladimir Putin expressed condolences over what he called the “terrorist act” in Urumqi in a telegram to Chinese President Xi Jinping on Thursday, the Kremlin said, a day after a visit to Shanghai that produced a landmark agreement on supplies of Russian natural gas to China.

President Xi said police would tighten security at possible targets and vowed to “severely punish terrorists”, Xinhua reported.

However, in recent weeks, China has intensified a crackdown on Uighurs in the region, jailing dozens for spreading extremist propaganda and manufacturing arms, among other charges.

Christopher Johnson, a former China analyst at the CIA, said China’s leadership may eventually realize that a policy of constantly tightening controls on Xinjiang may not be effective in preventing attacks.

“I’m kind of doubtful that they are going to announce some sort of more liberal policy,” said Johnson, who now works at the Center for Strategic and International Studies in Washington.

“But sooner or later I think they are going to have to come to that reality because the evidence is just smacking them in the face.”

But hey – buy stocks because PMI printed in contraction but better than expected… even if employment was dismal.

 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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