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."
he 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.