US-China (& Japan, South China Sea-- Taiwan, Vietnam, Philippines, etc)

[Crafty_Dog]

Woof All:

Just as we have a "Russia" thread and a "US-Russia" thread and a "Russia-Europe" thread, for purposes of thread coherence and improved research/search function relevance, we need to have a "US-China" thread to accompany the existing thread on "China".

Please post accordingly.  For example, I've asked GM to paste here his Popular Mechanics article here and I note that the Rare Earth Elements story, which we have discussed previously in the China thread, continues to bubble along.  As I recounted there, I made a very nice chunk of change in very short order with the two US rare earth plays MCP and REE.  I sold them in the aftermath of the apparent "resolution" of matters between Japan and China, (MCP at 28.xx and REE at 8.xx) but since then China has further tightened its export restrictions and both MCP and REE have shot up dramatically since then.

TAC!
Marc

[G M]

http://www.popularmechanics.com/technology/military/navy-ships/what-a-war-between-china-and-the-us-would-look-like

What a War Between China and the United States Would Look Like
Any Chinese move to take over Taiwan would trigger a confrontation with the U.S. Navy and Air Force. Is the U.S. prepared to counter this growing threat?

[G M]

http://www.cnbc.com//id/40851371

Chinese Could Become Richer Than Americans: Economist

If the US and Chinese economies move at their present rates, the average Chinese citizen will be wealthier than the average American in less than three decades, Ed Lazear, a Stanford University economics professor, told CNBC Thursday.

“We are talking about a very different world if we don’t get our growth rates back up with the kinds of policies that are aimed toward long-term growth, rather than the policies that fix things for the next six months,” said Lazear, who was the chairman of the President’s Council of Economic Advisors under George W. Bush.

“It means keeping taxes low, getting the fiscal situation in order, keeping spending down, having a positive climate for business and investing in human capital.”


**Read it all.

[G M]

http://www.foreignpolicy.com/articles/2011/01/02/think_again_american_decline?page=full

There are some serious problems with some points here, like using Krugman to validate an argument , but still worth reading.

[bigdog]

http://www.cnn.com/2011/WORLD/asiapcf/01/05/china.us.fighter.jets/index.html?hpt=T1

[G M]

Even if the J-20 is inferior to the F-22, they'll make many more J-20s.

[Crafty_Dog]

IJING—The first clear pictures of what appears to be a Chinese stealth fighter prototype have been published online, highlighting China's military buildup just days before U.S. Defense Secretary Robert Gates heads to Beijing to try to repair defense ties.

The photographs, published on several unofficial Chinese and foreign defense-related websites, appear to show a J-20 prototype making a high-speed taxi test—usually one of the last steps before an aircraft makes its first flight—according to experts on aviation and China's military.

 WSJ's Rebecca Blumenstein explains to Simon Constable new photos indicate the possibility that the Chinese military has developed a new stealth fighter jet, confirming fears of a military buildup.

The exact origin of the photographs is unclear, although they appear to have been taken by Chinese enthusiasts from the grounds of or around the Chengdu Aircraft Design Institute in western China, where the J-20 is in development. A few experts have suggested that the pictured aircraft is a mock-up, rather than a functioning prototype of a stealth fighter—so-called because it is designed to evade detection by radar and infrared sensors.

Related
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On display at Air Show China in Zuhai late last year: this CIA-style drone with missiles.
.China Newspaper Refers to New Jet
China Real Time: China's Military Ambitions: A Walking Tour
China Seen Defusing Korea
China Clones, Sells Russian Fighter Jets

.But many more experts say they believe the pictures and the aircraft are authentic, giving the strongest indication yet that Beijing is making faster-than-expected progress in developing a rival to the U.S. F-22—the world's only fully operational stealth fighter.

China's defense ministry and air force couldn't be reached to comment on the latest photos. Even without official confirmation, however, the photographs are likely to bolster concerns among U.S. officials and politicians about China's military modernization, which also includes the imminent deployment of its first aircraft carrier and "carrier-killer" antiship ballistic missiles.

 Global View Columnist Bret Stephens analyzes the stealth fighter and China's growing firepower.
.Such weapons systems would significantly enhance China's ability to hinder U.S. intervention in a conflict over Taiwan, and challenge U.S. naval supremacy in the Asia-Pacific region.

Gen. He Weirong, deputy head of China's Air Force, announced in 2009 that China's first stealth fighters were about to undergo test flights and would be deployed in "eight or 10 years." But there was no clear physical evidence of their existence until the latest photographs emerged.

Chinese authorities who monitor Internet traffic in the country appear not to have tried to block the J-20 pictures.

"The photos I've seen look genuine," said Gareth Jennings, aviation desk editor at Jane's Defence Weekly.

"It's pretty far down the line," he said. "The fact that its nose wheel is off the ground in one picture suggest this was a high-speed taxi test—that usually means a test flight very soon afterwards. All the talk we've heard is that this could happen some time in the next few weeks."

U.S. officials played down Chinese advances on the plane, which American intelligence agencies believe will likely be operational around 2018. "We are aware that the Chinese have recently been conducting taxi tests and there are photos of it," said Pentagon spokesman Col. David Lapan. "We know they are working on a fifth-generation fighter but progress appears to be uneven."

Col. Lapan said it appears the Chinese are still seeking engines for a fourth-generation fighter from Russia, an indication that they are "still encountering problems" with development work toward the fifth-generation aircraft, the J-20.

But the 2018 estimate suggests U.S. officials believe China's development of the fifth-generation fighter has accelerated. In 2009, Mr. Gates predicted that China wouldn't deploy a fifth-generation fighter until 2020. U.S. officials said the latest disclosures wouldn't affect any U.S. aircraft-development programs.

China has made rapid progress in developing a capability to produce advanced weapons, also including unmanned aerial vehicles, after decades of importing and reverse engineering Russian arms. The photographs throw a fresh spotlight on the sensitive issue of China's military modernization just as Washington and Beijing try to improve relations following a series of public disputes in 2010.

U.S.-China Disputes in 2010
January: China suspends military ties over U.S. arms sales to Taiwan

March: China refuses to blame North Korea for sinking of South Korean ship

July: China protests after Secretary of State Hillary Clinton says U.S. has national interest in South China Sea

September: China angered by perceived U.S. support for Japan in row over disputed islands.

U.S. House of Representatives passes bill authorizing action against China for manipulation of its currency

October: U.S. congratulates Liu Xiaobo, jailed Chinese dissident, for winning the Nobel Peace Prize

November: China refuses to condemn North Korea for artillery raid on South Korea.

U.S. sends aircraft carrier to joint military exercises with South Korea

December: U.S. again expresses support for Liu Xiaobo ahead of Nobel ceremony. U.S. moves two more aircraft carriers to the region
.Defense Secretary Gates is due to begin a long-delayed visit to Beijing on Sunday—almost exactly a year after China suspended military ties in protest over U.S. arms sales to Taiwan.

China's President Hu Jintao is then due to begin a state visit to the U.S. on Jan. 19. President Barack Obama joined in preparatory talks at the White House on Tuesday between his national security adviser, Tom Donilon, and Chinese Foreign Minister Yang Jiechi. During the meeting, Mr. Obama said he was committed to building a bilateral relationship that is "cooperative in nature," the White House said.

The two countries clashed last year over issues including the value of the Chinese currency, China's territorial claims in the South China Sea and vocal U.S. support for a jailed Chinese dissident who won the Nobel Peace Prize.

The U.S. was also frustrated by China's refusal to condemn two North Korean attacks on South Korea, while Beijing was angered by a U.S. decision to respond to the second attack, the shelling of a South Korean island in November, by sending an aircraft carrier to take part in joint naval exercises with Seoul near China's coast.

The U.S. and its Asian allies have also been alarmed by China's naval maneuvers and more forceful stance on territorial issues, while China's military strategists have accused the U.S. of trying to "contain" China—most recently by sending two more aircraft carriers to the region in December.

"The U.S. wants to retain its global hegemony and also preserve its regional interests. It is not comfortable with China's military rise," Senior Col. Han Xudong, a professor at China's National Defense University, was quoted as saying in the Global Times newspaper Tuesday.

Experts who said they thought the photographs were authentic included Andrei Chang of the Canadian-based Kanwa Asian Defence Monthly, and Richard Fisher, an expert on the Chinese military at the International Strategy and Assessment Center in Washington.

Several experts said the prototype's body appeared to borrow from the F-22 and other U.S. stealth aircraft, but they couldn't tell from the photographs how advanced it was in terms of avionics, composite materials or other key aspects of stealth technology.

They said that China was probably several years behind Russia, whose first stealth fighter, the Sukhoi T-50, made its first flight in January 2010, but that Beijing was catching up faster than expected.

The U.S. cut funding for the F-22 in 2009 in favor of the F-35, a smaller, cheaper stealth fighter that made its first test flight in 2006 and is expected to be fully deployed by around 2014. The F-22 has mainly been used for exercises and operations around U.S. airspace, but some have been deployed to Guam and Okinawa to help maintain the U.S. security umbrella in the Asia-Pacific region.

The Chinese prototype looks like it has "the potential to be a competitor with the F-22 and to be decisively superior to the F-35," said Mr. Fisher. The J-20 has two engines, like the F-22, and is about the same size, while the F-35 is smaller and has only one engine.

China's stealth-fighter program has implications also for Japan, which is considering buying F-35s, and for India, which last month firmed up a deal with Russia to jointly develop and manufacture a stealth fighter.

— Adam Entous in Washington contributed to this article.

[Crafty_Dog]

FWIW, here's POTH take on this:

BEIJING — Secretary of Defense Robert M. Gates, on a mission to resuscitate moribund military relations with China, will not arrive in Beijing for talks with the nation’s top military leaders until Sunday. But at an airfield in Chengdu, a metropolis in the nation’s center, China’s military leaders have already rolled out a welcome for him.

It is the J-20, a radar-evading jet fighter that has the same two angled tailfins that are the trademark of the Pentagon’s own stealth fighter, the F-22 Raptor. After years of top-secret development, the jet — China’s first stealth plane — was put through what appear to be preliminary, but also very public, tests this week on the runway of the Aviation Design Institute in Chengdu, a site so open that aircraft enthusiasts often gather there to snap photos.

Some analysts say the timing is no coincidence. “This is their new policy of deterrence,” Andrei Chang, the Hong Kong editor in chief of the Canadian journal Kanwa Defense Weekly, who reported the jet’s tests, said Wednesday. “They want to show the U. S., show Mr. Gates, their muscle.”

These days, there is more muscle to show. A decade of aggressive modernization of China’s once creaky military is beginning to bear fruit, and both the Pentagon and China’s Asian neighbors are increasingly taking notice.

By most accounts, China remains a generation or more behind the United States in military technology, and even further behind in deploying battle-tested versions of its most sophisticated naval and air capabilities. But after years of denials that it has any intention of becoming a peer military power of the United States, it is now unveiling capabilities that suggest that it intends, sooner or later, to be able to challenge American forces in the Pacific.

Besides the J-20, a midair-refuelable, missile-capable jet designed to fly far beyond Chinese borders, the Chinese are reported to be refitting a Soviet-era Ukrainian aircraft carrier — China’s first such power-projecting ship — for deployment as soon as next year.

A spate of news reports allege that construction is already under way in Shanghai on one or more carriers; the military denied a similar report in 2006, but senior military officials have been more outspoken this year about China’s desire to build the big ships. China could launch several carriers by 2020, the Pentagon stated in a 2009 report.

The military’s nuclear deterrent, estimated by experts at no more than 160 warheads, has been redeployed since 2008 onto mobile launchers and advanced submarines that no longer are sitting ducks for attackers. Multiple-warhead missiles are widely presumed to come next. China’s 60-boat submarine fleet, already Asia’s largest, is being refurbished with super-quiet nuclear-powered vessels and a second generation of ballistic-missile-equipped subs.

And a widely anticipated antiship ballistic missile, called a “carrier-killer” for its potential to strike the big carriers at the heart of the American naval presence in the Pacific, appears to be approaching deployment. The head of the United States Pacific Command, Adm. Robert F. Willard, told a Japanese newspaper in December that the weapon had reached “initial operational capability,” an important benchmark. Navy officials said later that the Chinese had a working design but that it apparently had yet to be tested over water.

On that and other weaponry, China’s clear message nevertheless is that its ability to deter others from territory it owns, or claims, is growing fast.

China, of course, has its own rationales for its military buildup. A common theme is that potentially offensive weapons like aircraft carriers, antiship missiles and stealth fighters are needed to enforce claims to Taiwan, should leaders there seek legal independence from the mainland.

Taiwan’s current status, governed separately but claimed by China as part of its sovereign territory, is maintained in part by an American commitment to defend it should Beijing carry out an attack. Some experts date elements of today’s military buildup from crises in the mid-1990s, when the United States sent aircraft carriers unmolested into waters around Taiwan to drive home Washington’s commitment to the island.

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Chinese officials also clearly worry that the United States plans to ring China with military alliances to contain Beijing’s ambitions for power and influence. In that view, the Pentagon’s long-term strategy is to cement in Central Asia the sorts of partnerships it has built on China’s eastern flank in South Korea, Japan and Taiwan.

“Some Chinese scholars worry that the U. S. will complete its encirclement of China this way,” said Xu Qinhua, who studies Russia and Central Asia at the Renmin University of China and advises government officials on regional issues. “We should worry about this. It’s natural.”

The Pentagon’s official view has long been that it welcomes a stronger Chinese military as a partner with the United States to maintain open sea lanes, fight piracy and perform other international duties now shouldered — and paid for — by American service members and taxpayers.

But Chinese military leaders have seldom offered more than a glimpse of their long-term military strategy, and the steady buildup of a force with offensive abilities well beyond Chinese territory clearly worries American military planners.

“When we talk about a threat, it’s a combination of capabilities and intentions,” said Abraham M. Denmark, a former China country director in Mr. Gates’s office. “The capabilities are becoming more and more clearly defined, and they’re more and more clearly targeted at limiting American abilities to project military power into the western Pacific.”

“What’s unclear to us is the intent,” he added. “China’s military modernization is certainly their right. What others question is how that military power is going to be used.”

Mr. Denmark, who now directs the Asia-Pacific Security Program at the Center for a New American Security in Washington, said China’s recent strong-arm reaction to territorial disputes with Japan and Southeast Asian neighbors had given both the Pentagon and China’s neighbors cause for concern.

Still, a top Navy intelligence officer told reporters in Washington on Wednesday that the United States should not overestimate Beijing’s military prowess and that China had not yet demonstrated an ability to use its different weapons systems together in proficient warfare. The officer, Vice Adm. David J. Dorsett, the deputy chief of naval operations for information dominance, said that although China had developed some weapons faster than the United States expected, he was not alarmed over all.

“Have you seen them deploy large groups of naval forces?” he said. “No. Have we seen large, joint, sophisticated exercises? No. Do they have any combat proficiency? No.”

Admiral Dorsett said that even though the Chinese were planning sea trials on a “used, very old” Russian aircraft carrier this year and were intent on building their own carriers as well, they would still have limited proficiency in landing planes on carriers and operating them as part of larger battle groups at sea.

Little about China’s military intentions is clear. The Pentagon’s 2009 assessment of China’s military strategy stated baldly that despite “persistent efforts,” its understanding of how and how much China’s government spends on defense “has not improved measurably.”

In an interview on Wednesday, a leading Chinese expert on the military, Zhu Feng, said he viewed some claims of rapid progress on advanced weapons as little more than puffery.

“What’s the real story?” he asked in a telephone interview. “I must be very skeptical. I see a lot of vast headlines with regards to weapons procurement. But behind the curtain, I see a lot of wasted money — a lot of ballooning, a lot of exaggeration.”

Mr. Zhu, who directs the international security program at Peking University, suggested that China’s military establishment — not unlike that in the United States — was inclined to inflate threats and exaggerate its progress in a continual bid to win more influence and money for its favored programs.

And that may be true. If so, however, the artifice may be lost on China’s cross-Pacific rivals.

“Ultimately, from a U. S. perspective it comes down to an issue of whether the United States will be as dominant in the western Pacific as we always have been,” Bonnie Glaser, a China scholar at the Washington-based Center for Strategic and International Studies, said in a telephone interview. “And clearly the Chinese would like to make it far more complicated for us.”

“That’s something the Chinese would see as reasonable,” she said. “But from a U. S. perspective, that’s just unacceptable.”

[ccp]

Crafty,
A lot of downplaying about Chinese military build up in the press.  It is obvious China is positioning itself to dominate the East.  While we cut our nuclear sub ballistic capability and our bombers with Start China continues to steal military secrets and build up their military.  Yet our politically correct MSM decides that the big issue is humorous gay bashing by our aircraft carrier commander.   The Chinese have to be laughing as hard as possible behind closed doors.
They are slowly but surely wiping the floor and catching up to us while the media is focused on gays and hollywood celebrities feelings.  And the ONE has feminized our military commanders.  They are no longer warriors.  They come across as mothers.

***Monday, July 26, 2010. (AP Photo/Yonhap, Lee Jung-joon) By Bill Gertz
-
The Washington Times
2:26 p.m., Monday, December 27, 2010
China's military is deploying a new anti-ship ballistic missile that can sink U.S. aircraft carriers, a weapon that specialists say gives Beijing new power-projection capabilities that will affect U.S. support for its Pacific allies.

Adm. Robert F. Willard, commander of the U.S. Pacific Command, disclosed to a Japanese newspaper on Sunday that the new anti-ship ballistic missile (ASBM) is now in the early stages of deployment after having undergone extensive testing.

"An analogy using a Western term would be 'initial operational capability (IOC),' whereby I think China would perceive that it has an operational capability now, but they continue to develop it," Adm. Willard told the Asahi Shimbun. "I would gauge it as about the equivalent of a U.S. system that has achieved IOC."

The four-star admiral, who has been an outspoken skeptic of China's claims that its large-scale military buildup is peaceful, said the U.S. deployment assessment is based on China's press reports and continued testing.

The new weapon, the "D" version of China's DF-21 medium-range missile, involves firing the mobile missile into space, returning it into the atmosphere and then maneuvering it to its target

Military officials consider using ballistic missiles against ships at sea to be a difficult task that requires a variety of air, sea and space sensors, navigation systems and precision guidance technology - capabilities not typical of other Chinese missiles.

Asked about the integrated system, Adm. Willard said that "to have something that would be regarded as in its early operational stage would require that system be able to accomplish its flight pattern as designed, by and large."

The admiral said that while the U.S. thinks "that the component parts of the anti-ship ballistic missile have been developed and tested," China's testing has not gone as far as a live-fire test attack on an actual ship.

"We have not seen an over-water test of the entire system," he said.

Adm. Willard said he did not view the new missile as a greater threat to U.S. and allied forces than China's submarine forces, which also have been expanded greatly in the past decade.

"Anti-access/area denial, which is a term that was relatively recently coined, is attempting to represent an entire range of capabilities that China has developed and that other countries have developed," he said.

"It´s not exclusively China that has what is now being referred to as A2/AD capability. But in China´s case, it´s a combination of integrated air-defense systems; advanced naval systems, such as the submarine; advanced ballistic-missile systems, such as the anti-ship ballistic missile, as well as power-projection systems into the region," he said.

The new weapons can threaten "archipelagos" in Asia, such as Japan and Philippines, as well as Vietnam and other states that "are falling within the envelope of this, of an A2/AD capability of China," Adm. Willard said.

"That should be concerning - and we know is concerning - to those countries," he said.

Adm. Willard said the new weapons are "an expanded capability that ranges beyond the first island chain and overlaps countries in the region."

"For that reason, it is concerning to Southeast Asia, [and] it remains concerning to the United States."

Andrew S. Erickson, a professor at the U.S. Naval War College, said the admiral's comments on the missile deployment confirm earlier reports that the Chinese are moving ahead with the DF-21D missile.

"China must have conducted a rigorous program of tests, most likely including flight tests, to demonstrate that the DF-21D [missile] is mature enough for initial production, deployment and employment," Mr. Erickson said in an e-mail.

Mr. Erickson estimates that at least one unit of China's Second Artillery Corps, as its missile forces are called, must be equipped with the road-mobile system.

"While doubtless an area of continuous challenge and improvement, the DF-21D´s command, control, communications, computers, information, surveillance, and reconnaissance infrastructure must be sufficient to support attempts at basic carrier strike group targeting," he said.

Mr. Erickson said, based on Chinese missile-deployment patterns, that the new missile system likely will be fielded in "waves" at different units to meet deterrence objectives.

Military specialists have said the DF-21D deployment is a potent new threat because it will force U.S. aircraft carrier strike groups to operate farther from hot spots in the western Pacific.

Currently, U.S. military strategy calls for the Pentagon to send several strike groups to waters near Taiwan in the event China follows through on threats to use force to retake the island. The lone U.S. aircraft carrier strike group based permanently in the region is the USS George Washington, whose home port is inYokosuka, Japan. A second carrier is planned for Hawaii or Guam.

Carrier forces also provide air power in the event of a new war in Korea and are used to assure freedom of navigation, a growing problem as the result of recent Chinese military assertiveness in the South China Sea, East China Sea and Yellow Sea.

Adm. Willard did not discuss what U.S. countermeasures the Navy has taken against the new anti-ship missile. U.S. naval task forces include ships equipped with the Aegis system designed to shoot down ballistic missiles.

Wallace "Chip" Gregson, assistant defense secretary for Asian and Pacific security affairs, said in a speech earlier this month that China's new anti-access and area-denial weapons, including the DF-21D, "threaten our primary means of projecting power: our bases, our sea and air assets, and the networks that support them."

He warned that China's military buildup could "upend the regional security balance."

Richard Fisher, a China military-affairs specialist, said the new ASBM is only one part of a series of new Chinese weapons that threaten the region.

"When we add the ASBM to the PLA's [People's Liberation Army's] growing anti-satellite capabilities, growing numbers of submarines, and quite soon, its fifth-generation fighter, we are seeing the erection of a new Chinese wall in the western Pacific, for which the Obama administration has offered almost nothing in defensive response," Mr. Fisher said.

"Clearly, China's communist leadership is not impressed by the administration's ending of F-22 production, its retirement of the Navy's nuclear cruise missile, START Treaty reductions in U.S. missile warheads, and its refusal to consider U.S. space warfare capabilities. Such weakness is the surest way to invite military adventurism from China," he added.

Mr. Fisher said the Pentagon should mount a crash program to develop high-technology energy weapons, like rail guns and lasers in response to the new ASBMs.

Mark Stokes, a retired Air Force officer who has written extensively on the new missile, said the new deployment is a concern.

"China's ability to place at risk U.S. and other nations' maritime surface assets operating in the western Pacific and South China Sea is growing and closer to becoming a reality than many may think," Mr. Stokes said.

© Copyright 2011 The Washington Times, LLC. Click here for reprint permission.
About the AuthorBill Gertz
Bill Gertz is geopolitics editor and a national security and investigative reporter for The Washington Times. He has been with The Times since 1985.

He is the author of six books, four of them national best-sellers. His latest book, “The Failure Factory,” on government bureaucracy and national security, was published in September 2008.***

[Crafty_Dog]

Although expressed briefly, the point about BO neutering our space advantage is pivotal and profound IMHO.

[G M]

Yup.

[Crafty_Dog]

BEIJING — The Pentagon is stepping up investments in a range of weapons, jet fighters and technology in response to the Chinese military buildup in the Pacific, Defense Secretary Robert M. Gates said Saturday on the eve of his visit to Beijing.

Despite billions of dollars in proposed Pentagon budget cuts that Mr. Gates announced this past week, he said that the Chinese development of its first radar-evading fighter jet, as well as an antiship ballistic missile that could hit American aircraft carriers, had persuaded him to make improvements in American weaponry a priority.

“They clearly have potential to put some of our capabilities at risk, and we have to pay attention to them, we have to respond appropriately with our own programs,” Mr. Gates said.

At the same time Mr. Gates doused China’s proud rollout this past week of its new stealth fighter jet, the J-20, saying that even though it was a matter for concern, there “is some question about just how stealthy” it is.

Mr. Gates made his comments to reporters before arriving Sunday night in Beijing, where he is on a three-day visit for talks with Chinese generals and President Hu Jintao that are meant to promote a more open and stable relationship between the American and Chinese militaries.

It is unclear what effect Mr. Gates’s comments will have on the talks, which are occurring a week before President Hu is to meet with President Obama in Washington.

The American weapons that Mr. Gates was referring to included investments in a new long-range nuclear-capable bomber aircraft, which the Pentagon had stopped developing in 2009, as well as a new generation of electronic jammers for the Navy that are designed to thwart a missile from finding and hitting a target. At a Pentagon briefing on Thursday, Mr. Gates said that the jammers would improve the Navy’s ability to “fight and survive” in waters where it is challenged.

Mr. Gates was also referring to continued investment in the Joint Strike Fighter, the Pentagon’s newest radar-evading fighter jet.

The Pentagon provided no estimate on Saturday of the total cost of the three programs or others meant to counter the Chinese buildup in the Pacific.

Although Pentagon officials say that China is a generation or more behind the United States in military technology, Mr. Gates said he has been worried about the Chinese buildup in his four years as defense secretary. And acknowledged that the Pentagon and intelligence agencies had underestimated how quickly the Chinese could act.

“We’ve been watching these developments all along,” Mr. Gates said.

“I’ve been concerned about the development of the antiship cruise and ballistic missiles ever since I took this job,” he added. “We knew they were working on a stealth aircraft. I think that what we’ve seen is that they may be somewhat further ahead in the development of that aircraft than our intelligence had earlier predicted.”

Mr. Gates said he hoped his talks with Chinese leaders would reduce the need for more American weaponry in the Pacific. He also said that if Chinese leaders considered the United States a declining power because of the financial crisis, they were wrong.

“I’ve watched this sort of cyclical view of American decline come around two or three times, perhaps most dramatically in the latter half of the 1970s,” Mr. Gates said. “And my general line for those both at home and around the world who think the U.S. is in decline is that history’s dustbins are filled with countries that underestimated the resilience of the United States.”

[Crafty_Dog]

BEIJING — China’s military conducted a test flight of a new stealth fighter jet on Tuesday, overshadowing an important visit to Beijing by Defense Secretary Robert M. Gates aimed at improving defense ties — and apparently catching China’s civilian leadership off guard.

Staging the test flight of the long-secret J-20 while Mr. Gates was in Beijing amounted to an unusually bold show of force by China. But the demonstration also raised questions about the degree of civilian control of the Chinese military, as President Hu Jintao and other civilian leaders gave their American visitors the impression that they were unaware that the test had been conducted only hours before they received Mr. Gates at the Great Hall of the People.

A senior American defense official said that when Mr. Gates asked Mr. Hu to discuss the test it was evident to the Americans that the Chinese leader and his top civilian advisers were startled by the query and were unprepared to answer him. Photos of the flight of the radar-evading J-20 had been prominently posted on unofficial Chinese military Web sites a few hours before the meeting.

"The civilian leadership seemed surprised by the test," Mr. Gates told reporters on Wednesday morning in Mutianyu, during a visit to the Great Wall outside Beijing.

In remarks to reporters on Tuesday in Beijing, Mr. Gates said that Mr. Hu did acknowledge the test, apparently later in the same meeting, and that he assured Mr. Gates that it “had absolutely nothing to do with my visit.”

Asked if he truly believed that, Mr. Gates said, “I take President Hu at his word.”

But he said the episode also underscored concerns that the Chinese military might sometimes act independently of the country’s political leadership, a growing worry of American defense officials who say they do not know the real goals of the secretive Chinese armed forces. “I’ve had concerns about this over time,” Mr. Gates said.

Chinese officials provided only a brief summary of the meeting between Mr. Gates and Mr. Hu and did not address the perception by Pentagon officials that Mr. Hu had not been informed of the test.

A Hong Kong-based expert on the Chinese military, Andrei Chang, said in a telephone interview that the Chinese stealth fighter, which has the same two angled tailfins that are the trademark of the Pentagon’s own stealth fighter, the F-22 Raptor, flew for about 15 minutes over an airfield in the city of Chengdu. Photos of the jet in flight also appeared on a computer bulletin board run by Global Times, a state-run newspaper known for its hawkish positions.

The J-20, a midair-refuelable, missile-capable jet designed to fly far beyond China’s borders, was for years kept in top-secret development by the Chinese. American officials said they saw the test flight as a provocative display of muscle by China’s military but were unsure for whom the show was meant: Mr. Gates, Mr. Hu or both.

As China’s No. 1 leader, Mr. Hu heads the Central Military Commission, the top military body, as well as the Communist Party. But aside from Xi Jinping, China’s vice president and Mr. Hu’s heir apparent, who recently joined the commission, Mr. Hu is the only civilian official who has authority over the sprawling and increasingly well-financed military bureaucracy. It is not clear to what extent he exercises day-to-day control of military activities.

Some American officials speculated that the test flight was meant in part as an act of defiance against Mr. Hu, who has ordered the Chinese military to try to smooth over years of rocky relations with the Pentagon. Mr. Gates made the trip here at the invitation of Mr. Hu, who is to meet with President Obama at the White House next week and by all accounts is eager for his American visit to be a success.

Joseph S. Nye Jr., a Harvard professor and a former assistant secretary of defense who was in Beijing on Tuesday for a conference on United States-China relations, said it was not a complete surprise to him that Mr. Hu appeared uninformed of the test flight. “The Chinese military often sets its own agenda on day-to-day operations without political approval,” he said.

It is not the first time the Chinese military has operated in its own sphere. In 2007, Bush administration officials said they were unable to get the most basic diplomatic response from China after their detection of a successful Chinese missile test to destroy a satellite, and were uncertain whether China’s top leaders, including Mr. Hu, were fully aware of the test before it occurred.

The rapidly modernizing Chinese military, which has increasingly challenged the United States Navy in Pacific waters, first rolled out the plane last week, in what was regarded as a tough-minded welcome to Mr. Gates before he even arrived.

Mr. Gates, however, reacted by playing down the spectacle. In comments to reporters on his plane en route to Beijing, he questioned “just how stealthy” the Chinese fighter really was, then said the Pentagon was stepping up investments in a range of weapons, jet fighters and technology in response to the J-20 and other aspects of the Chinese military buildup in the Pacific.

The airborne debut of the J-20 capped a series of recent tests that resembled at times a celebration of the nation’s growing military and technological might.

In a string of demonstrations last week at an aviation center in Chengdu, in central China, the fighter taxied down a runway on Wednesday, then reappeared on Thursday for another high-speed runway test, almost taking off before parachutes popped out and slowed it to a halt.

That test was watched by a crowd of luminaries ferried to the site in a Boeing 737, according to Mr. Chang, the military expert. On Friday, two planeloads of officials watched another runway test, this time staging a ceremony and snapping pictures of themselves with the test pilot. Yet another large crowd witnessed Tuesday’s first flight, Mr. Chang said.

Such military high-fives must be measured against the long road the J-20 almost certainly must travel. The F-22 Raptor was conceived in 1981, took its first test flight in 1990, and did not enter operational service until 2004.

The Pentagon ordered four F-22 prototypes built to speed development. As far as is known, the Chinese have built two. Mr. Chang estimated that it could be a decade before China’s stealth plane enters production.

In that sense, the hoopla surrounding the tests — both inside and outside China — suggests that the symbolism of Tuesday’s flight may considerably outweigh its immediate significance.

Pentagon officials have more forcefully pushed the Chinese military to be less secretive about its intent and its weapons. Chinese military experts noted that at the very least, the test flight was transparent.

At the Great Wall, Mr. Gates stood in the cold sunshine framed by China’s attempt to repel foreign invaders and said that the commander of China’s nuclear missile forces, General Jing Zhiyuan, had accepted his invitation to visit the United States Strategic Command in Nebraska.

Mr. Gates said that no date had been set but held it out as an example of a small step of progress.


David E. Sanger contributed reporting.

[bigdog]

http://www.guardian.co.uk/business/2011/jan/12/era-of-owned-by-china 

[Crafty_Dog]

By SUDEEP REDDY
A worthy read BD.

Here's this, which may bear watching:
===================

WASHINGTON—The Export-Import Bank of the U.S. is taking on China's export machine, in a deal designed as a model for developed nations to challenge China in markets around the world.

In a move crafted with White House involvement, the U.S. export-financing agency agreed for the first time to match China's cheaper financing terms to get the Pakistan government to buy 150 General Electric Co. locomotives.

 .The financing terms for the $477 million deal required the U.S. to work with the Organization for Economic Cooperation and Development, a multilateral organization that monitors export-financing terms by developed countries—but not by China—to attempt to provide a level playing field.

The move is one of several challenges the Obama administration has made to China, the world's largest exporter, as its president, Hu Jintao, prepares to visit Washington next week.

"They're winning deals in part because they're not playing by the rules," Ex-Im Bank Chairman Fred Hochberg said in an interview. "This says: We're not going to sit idly by and let you buy business. We will compete and make sure you stand toe to toe with American companies and American workers."

The Ex-Im Bank deal is one of several steps the Obama administration has taken to pursue its goal of doubling U.S. exports over five years. The U.S. and other governments have been pressing China to let its currency appreciate, which would make Chinese exports more expensive. The administration also has brought complaints against China at the World Trade Organization, most recently challenging Chinese subsidies for production of wind-power equipment.

"Anytime the U.S. wins a trade case…it opens the door for other countries," said Eswar Prasad, a professor of trade policy at Cornell University and former head of the International Monetary Fund's China division. "It opens the floodgates for other countries and it emboldens other countries to act more forcefully against China." But, he added, "how far you can push that strategy remains to be seen."

The Pakistan deal was seen as a key test case by the Ex-Im Bank, which financed $25 billion of exports in the fiscal year that ended in September 2010. China's export-financing arm has ramped up in the past decade to support its exports. U.S. officials estimate that the Chinese agency already finances more than the total export financing of the Group of Seven industrialized nations combined.

The Chinese Embassy in Washington didn't immediately respond to requests to comment.

View Full Image

Bloomberg News
 
A General Electric plant in Erie, Pa., pictured, will manufacture the locomotives for Pakistan Railways. The deal, expected to support about 700 jobs in the U.S., fits with the goal of increasing American exports.
.Pakistan had indicated its interest in buying locomotives made by GE if the U.S. matched China's financing terms, which were sweeter than those allowed by the OECD agreement. The Chinese railcars were 30% to 50% cheaper than the GE products, but U.S. officials said Pakistan wanted the American equipment.

"The underlying premise has been that we ought to let products compete on their own merits, their own quality, their own value, and not let financing be a distorting factor," Mr. Hochberg said. China, not an OECD member, has long operated outside the group's agreed-upon terms. "Tolerance of that began to wear thin over the last 18 months," Mr. Hochberg said.

Early last year, the Ex-Im board agreed to finance about $437 million of the deal under a 12-year loan. It would carry a lending rate, tied to Treasury bond yields, that is now about 3% and an exposure fee of 8.2%. Ex-Im Bank notified the OECD, and officials said other OECD members encouraged the bank to move forward as a challenge to China's practices. The locomotives, which Pakistan's government plans to buy over two years, will be manufactured in Erie, Pa. The deal, expected to support about 700 U.S. jobs, has been approved by Pakistan pending a review by its Supreme Court.

"We are pleased that Ex-Im Bank offered fair, competitive and transparent financing to Pakistan Railways in support of GE's proposal," GE said in a statement Tuesday. "Ex-Im Bank's financing creates a level playing field for U.S. companies to compete and, ultimately, lays the foundation to sustain existing and to create new U.S. high-tech manufacturing jobs."

Officials at the U.S. Treasury, State Department, Commerce Department and White House were involved in striking the deal with Pakistan, which is important to U.S. strategic interests.

Last month, Chinese Premier Wen Jiabao visited Pakistan and promised billions of dollars in infrastructure spending. The Chinese are building rail and road links from Xinjiang down through Kashmir to the Arabian Sea, and also financed the port of Gwadar on the Arabian Sea coast, through grants and concessional financing. Pakistan imports more than twice as much in goods from China annually as it does from the U.S. The U.S. has reoriented its aid in Pakistan to focus more on infrastructure, in part to challenge China. That has antagonized India, which is especially angered by the Kashmir rail link through disputed territory. The U.S. hopes its new focus will help influence Pakistan to be more pliable in fighting Taliban militants and help boost the U.S.'s image with Pakistanis.

The Chinese are expected to try to avoid embarrassment in the Hu-Obama meeting next week, and the Obama administration is expected to play on that to press China for changes in trade, foreign exchange and national-security policies. But thus far China's military has rebuffed U.S. calls for regular high-level defense talks.

In the U.S., the administration isn't the only player setting the tone. On Tuesday, the U.S.-China Economic and Security Review Commission, a panel created by Congress that often takes a hard line on China, said growing Chinese strength in telecommunications could pose a danger for the U.S. "This greater potential role for China has generated concerns regarding corresponding potential national security implications of manufacturing and investment by China's telecommunications companies," its report said.

At least one House panel, the Foreign Affairs Committee, is considering holding hearings during Mr. Hu's visit on China's human rights, economic and foreign exchange practices.

—Bob Davis and Tom Wright contributed to this article.

[Crafty_Dog]

As always, Wesbury offers thinking worth the consideration.  This piece could be posted in other threads as well, but I put it here because, , , well, because I had to choose 

Monday Morning Outlook
China and the Dollar To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 1/18/2011

Chinese leader Hu Jintao visits the US this week. Getting past the public
pleasantries, our leaders will have much to say behind closed doors. On economic
issues, the focus will be on monetary policy, particularly the role of the US
dollar, the RMB/$ exchange rate, and the recent jump in China’s inflation.
On the issue of the US dollar’s role as the world’s reserve currency, we
think the critical comments out of China – as well as other comments from
France, Russia, and the Middle East – are just bluster.
 
Countries that do not have a gold standard – which, at this point in history,
includes all of them – must still back their currencies with something. These
“reserves” create confidence. The Federal Reserve typically uses US
Treasury securities as reserves, although it also holds many mortgage-backed
securities these days. The Fed makes a profit on these holdings and turns them over
to the government. The European Central Bank also holds the sovereign debt of its
member countries and turns their earnings over to member governments.
 
Emerging market central banks have a choice of what to hold as reserves, and they
will always make the one that maximizes earnings and creates the most confidence in
their currencies. That’s why China links its currency to the dollar and holds
mostly US Treasury debt as reserves.
 
No one forces a foreign central bank to buy US Treasury debt. Each country would
prefer to have their central bank buy their own local government debt as reserves.
But who would trust these currencies if they were backed up by local government
debt? Imagine Thailand trying to encourage the use of its currency if it was backed
only by Thai government debt. And if fewer people held the currency, the central
bank would generate lower profits to hand over to the government.
 
In other words, the international role of the dollar is a by-product of
profit-seeking central banks pursuing their own self-interest. And that’s not
going to change anytime soon. There is simply no other instrument issued by anyone
that has the liquidity and certainty of payment of US Treasury debt.
 
Moreover, as emerging markets keep growing, their central banks will issue more
local currency, which will continue to elevate the demand for Treasury debt. So
while other countries must learn to accept the US dollar’s role, Americans
must learn to accept that, over time, the share of our debt owned by foreigners is
likely to keep rising. And, that the demand for US debt helps generate large US
trade deficits.
 
Many assume large foreign ownership of US debt makes the US vulnerable to foreign
governments. We think the vulnerability is the other way around. For example, the US
could protect Taiwan with its Navy. Or, instead, the US could send a message that
any attack would mean no payments on our debt to the attacking country until it
withdraws and makes reparations. The US did something similar when World War II
began. No wonder Hu Jintao told the Washington Post “the current international
currency system is a product of the past.” China realizes it’s
vulnerable. But, any major changes are decades in the future. The dollar will remain
the world’s reserve currency for a long time to come.
 
This does not mean the dollar cannot lose value. The yuan can strengthen as China
continues to emerge from Mao’s Communist tyranny. Since mid-2010, the yuan has
gained 3.5% versus the dollar, which adds to the 17.4% appreciation that occurred
between mid-2005 and mid-2008.
 
We think this trend will continue. It has to. The US is running a very loose
monetary policy, and because China links to the dollar it is experiencing rising
inflation. Commodity prices, like oil, are rising rapidly and China, which imports
lots of commodities for processing into consumer goods, is feeling that inflationary
pain before it hits home in the US. Letting the yuan gain versus the dollar is one
way for China to ease the pain from the Fed’s overly loose monetary policy.
It’s also a way for China to enhance the purchasing power of its workers and
companies.
 
The US should not take this week’s visit as an opportunity to lecture the
Chinese about the yuan. If we do, Fed Chairman Ben Bernanke may find himself on the
receiving end of a lecture about the importance of price stability and how to run a
central bank. And he would deserve it.



This information contains forward-looking statements about various economic trends
and strategies. You are cautioned that such forward-looking statements are subject
to significant business, economic and competitive uncertainties and actual results
could be materially different. There are no guarantees associated with any forecast
and the opinions stated here are subject to change at any time and are the opinion
of the individual strategist. Data comes from the following sources: Census Bureau,
Bureau of Labor Statistics, Bureau of Economic Analysis, the Federal Reserve Board,
and Haver Analytics. Data is taken from sources generally believed to be reliable
but no guarantee is given to its accuracy.

[G M]

http://www.nationalreview.com/corner/257501/stain-upon-american-honor-jay-nordlinger

A Stain Upon the American Honor
January 19, 2011 1:10 P.M.
By Jay Nordlinger   

The Associated Press begins a story, “Chinese leader Hu Jintao is being feted in Washington this week with a lavish state banquet at the White House and other pomp usually reserved for close friends and allies . . .” Here is another passage, from later in the story:

“For the protocol-obsessed Chinese leadership, a highlight of the visit will be Wednesday’s state banquet — an honor denied Hu on his last trip to the White House in 2006. President George W. Bush thought state banquets should be reserved for allies and like-minded powers and instead gave Hu a lunch.”

Yes, that’s how a decent nation should treat a police state — lunch, at most.

The AP continues, “Even worse” — i.e., even worse than the insult of a mere lunch — “a member of Falun Gong, the spiritual movement banned by China, disrupted Hu and Bush’s joint appearance . . .”

“Worse”? Not in my book. That Falun Gong member’s “disruption” was just about the only ray of truth in that entire state visit. Hu’s government “disrupts” the lives of Falun Gong practitioners by kidnapping them, throwing them into camps and cells, and torturing them to death. I read reports of this every single week.

Here is a passage from a Bloomberg report: “While former President George W. Bush met with Hu in the U.S., the session wasn’t accorded the status of a state visit. That trip was marred by a demonstrator who criticized persecution of the Falun Gong religious group at Hu’s welcome ceremony at the White House.”

“Marred”? “Marred”? The demonstrator redeemed the whole awful affair: the head of a police state being received by the greatest democracy in the world.

China, to remind you, is a country with a gulag (laogai). The Chinese government is a regime that imprisons and tortures some of the most admirable people in all the world: the human-rights lawyer Gao Zhisheng, for one. What he has endured is unimaginable, not to mention unendurable, by most people. The 2010 Nobel peace laureate, Liu Xiaobo, sits in prison, while his wife is under house arrest.

There were two other Nobel peace laureates blocked from going to Oslo to collect their prize: Carl von Ossietzky, a political prisoner of the Nazis; and Andrei Sakharov, the heroic physicist-dissident in the Soviet Union. (Lech Walesa and Aung San Suu Kyi were different cases, as I’ve explained in the past. They could have gone, but did not want to run the risk of being prevented from returning home.) The Chinese Communists have well earned their position with the Nazis and the Soviets.

The demands of “realpolitik” do not include a “lavish state banquet,” to borrow the AP’s words. George W. Bush did not bow to the Chinese Communists in this way. (Remember, Obama has literally bowed to the Chinese.) He gave them a lunch. Sino-American relations proceeded normally in his eight years.

Let me get a little corny on you: America is a nation that’s supposed to stand for something — for freedom, and human dignity, above all. We’re not supposed to be like every other nation. We’re supposed to be exceptional. Different. A beacon unto man.

I’m not a babe in the woods, and I understand the necessity of getting along in a wicked world. But we don’t have to abase ourselves as we are doing now. We should not be honoring the PRC boss. We should be honoring, and standing with, the men and women in the camps and the cells. Are we America? (Does this sort of talk make you gag?) What is America? What are we supposed to celebrate on the Fourth of July? Is it just an excuse for fireworks and a picnic?

American honor has been stained this week. A degree of shame rests upon this nation. We should hope that the prisoners and the strugglers — who want nothing more than what you and I are damn lucky to have — forgive us.

[G M]

http://www.washingtontimes.com/news/2011/jan/19/usacross-out-usa-china-1/

''If China becomes the world's No. 1 nation ... ." That was the headline in the official newspaper of the Chinese Communist Party, The People's Daily, on the eve of Chinese President Hu Jintao's state visit to Washington. The article went on to boast how "China's emergence is increasingly shifting to debate over how the world will treat China, which is the world No. 1 and has overtaken the U.S."

A story like this does not appear by accident in the official Chinese Communist Party newspaper on the eve of a state visit to the world's (current) No. 1 power, the United States.

It was a signal. The latest and boldest signal yet that China intends to become the world's No. 1 power.

President Obama took the occasion of his first visit to China to show "humility" and to assure his Shanghai audience that "we do not seek to contain China's rise."

The Chinese communists are taking the occasion of their first visit to the Obama White House - not to show humility, as Mr. Obama did to them - but to openly show their clear intention to dominate the world from the Middle Kingdom.

As Constantine Menges wrote in "China: The Gathering Threat," "In the traditional Chinese view, the world needs a hegemon - or dominant state - to prevent disorder. The communist Chinese regime believes China should be that hegemon." Traditionally, the Chinese communists have cloaked their hegemonic ambitions under the guidance of the late Deng Xiaoping to "keep a cool head and maintain a low profile. Never take the lead - but aim to do something big."

But in early 2010, cool heads and low profiles gave way to a senior People's Liberation Army officer openly calling for "China to abandon modesty about its global goals and sprint to become world No. 1," adding that "China's big goal in the 21st century is to become world No. 1, the top power."

Now we have the official state paper of the Chinese Communist Party openly discussing "China as the world's top nation" on the eve of China's state visit to the Obama White House. Why is this happening? And why now?

When Mr. Obama "arrived in China ... as a fiscal supplicant, not the leader of the free world," as stated in the Times Online, and bowed down to their communist premier, the Chinese communists took the president's gestures as the signs of weakness they were, and quickly made "radical departures from late patriarch Deng Xiaoping's famous diplomatic credo of 'adopting a low profile and never taking the lead' in international affairs" by unveiling China's new "ambitious agenda" to assume a more powerful stance on the world stage and "to become world No. 1, the top power," according to the Asia Times.

[Crafty_Dog]

Of all the differences between dictatorship and democracy, probably none is so overlooked as the ability of the former to project strength, and the penchant of the latter to obsess about its own weakness.

In 1957 the Soviets launched Sputnik and the U.S. went into a paroxysm of nerves about our supposed backwardness in matters ballistic. Throughout the 1980s Americans lived with "Japan as Number One" (the title of a book by Harvard professor Ezra Vogel, though the literature was extensive) and wondered whether Mitsubishi's purchase of Rockefeller Center qualified as a threat to American sovereignty.

Now there's China, whose President is visiting the U.S. this week amid a new bout of American hypochondria. In an op-ed last week in these pages, Andrew Kohut of the Pew Research Center noted that a plurality of Americans, 47%, are under the erroneous impression that China is the world's leading economy. News reports regarding Chinese military strides, or the academic prowess of Shanghai high school students, contribute to Western perceptions of Chinese ascendancy. So does the false notion that Beijing's holdings of U.S. debt amounts to a sword of Damocles over Washington's head.

Oh, we nearly forgot: Tough-as-nails Chinese mothers are raising child prodigies (a billion of them!) while their Western counterparts indulge their kids with lessons in finger-painting.

We'll leave it to others to debate the merits of Tiger-style mothering, except to say that the overnight success of Amy Chua's book fits the pattern of democratic fretting over our own perceived shortcomings. Such fretting does have its uses. Free societies that constantly adapt to swings in political opinion, innovations in the marketplace, evolving tastes and norms and the arrival of new neighbors are societies that almost never crack. Ours hasn't since Fort Sumter was bombarded 150 years ago this April.

 
Global View columnist Bret Stephens and Mary Kissel of the editorial board on Hu Jintao's visit to the U.S.
Slideshow: China's Dissidents Then again, it's a thin line between healthy self-criticism and neurotic—or opportunistic—self-loathing. The rise of China combines economic opportunities for the U.S. with competitive and strategic challenges. At a minimum, it's an occasion to pull up our collective socks and rethink some welfare-state attitudes about work, investment, entitlements and spending. The 112th Congress seems ready to do that by voting to repeal ObamaCare, and even President Obama is bowing to some economic sense.

If China's rise presents any immediate danger, it's the risk that it might cause Americans to ignore the sources of our strength. For all of China's genuine successes, there's an even greater dose of exaggeration—the product of a political system long adept at hiding its weaknesses to strangers.

China remains an underdeveloped country, its economy barely one-third the size of America's. Its leaders live in fear of peasant revolts, ethnic separatists, underground religious movements, political dissidents and the free flow of information. Its economy remains profoundly hobbled by corruption, inefficient state-owned enterprises and an immature banking system. (See Joseph Sternberg nearby.)

There is no genuine rule of law and its regulatory environment has become increasingly unpredictable for foreign investors and local entrepreneurs. It suffers from an aging population and environmental damage Americans wouldn't tolerate. Its greatest comparative advantage—cheap labor—is under strain from rising domestic wages and competition from places like Vietnam and Bangladesh.

Above all, China suffers from an absence of self-correcting mechanisms, beginning at the top with its authoritarian political system. And while it can trumpet achievements like a stealth fighter or bullet trains—some based on pilfered designs—it has a harder time adjusting to failure, much less admitting to it.

None of this strikes us as a particularly worthy model for the U.S. to emulate, and it's worth noting how few of China's neighbors seem eager to embrace its leadership. But it does seem to excite admiration among Western pundits with a soft spot for economic dirigisme and technocratic politics. That, too, is an old debate, one the technocrats always lose.

As Reagan showed in the 1980s, nothing cures a national funk as well or as quickly as a revival of economic growth. The U.S. has work to do to repair the damage of the last four years, but as always our fate is in our hands, not China's.

[G M]

Just as complacency kills on a personal level, it does on the national level as well. Every criticism of China listed above is true, at the same time, the US, as well as the rest of the west is busy committing slow motion suicide. The 21st. century will require that we remain the technological leader, but we are falling behind. India and China are hungry and motivated while we gut the values that put us where we are.

[Crafty_Dog]

I took the underlying point to be more a matter of we should not be looking to emulate them, that we should be who we are.  Properly understood, being who we are rejects His Glibness and the Progressives too.

[G M]

Our disfunctional education system (ruined by the marxists) is creating a generation that will have their asses handed to them by asia.

[Crafty_Dog]

Unfortunately that seems to be true.

[G M]

http://althouse.blogspot.com/2011/01/2009-nobel-peace-prize-winner-hosted.html

"The 2009 Nobel Peace Prize Winner hosted a dinner for the guy holding the 2010 Nobel Peace Prize Winner in prison..."
"... and the media does not get the irony of this at all."

[Crafty_Dog]

I heard that contrast noted my someone earlier today.  Whoever it was went on to note that the honor of a state dinner usually goes to a few close friends.  

The mindboggling naivete and general pussiness of our Commander in Chief is doing damage for which we are going to pay dearly for a very long time.
===========================
Alexander's Essay – January 20, 2011

U.S. v Red China, Version 3.0
"[Confinement] to a passive commerce would [compel us] to see the profits of our trade snatched from us, to enrich our enemies and persecutors. [Our] spirit of enterprise ... an inexhaustible mine of national wealth, would be stifled and lost; and poverty and disgrace would overspread our country." Alexander Hamilton
Hu Jintao, president of the People's Republic of China (as designated by the central politburo of the Chinese Communist Party, not the Chinese people), arrived in Washington this week for a lavish state soiree with Barack Hussein Obama and company. Hu and Obama will meet eight times, culminating with an extravagant state dinner underwritten by a loan from China.

After China's Olympic coming out party in 2008, Obama kow-towed to Red China with a visit in November 2009. Obama expected Hu to reciprocate in 2010, but the Chinese dictator did not -- a clear signal that Jintao would come here on his own terms in his own time.

It was no small irony that Hu arrived in Washington on a China Air Boeing 747-400, a very large affirmation of U.S. trade relations with China.

Hu's primary objective on this visit is to promote the establishment of a "G-2" partnership, conferring the honor of the new world order upon the two most powerful economies in the world (assuming Europe is not considered one economy, which would demote China to the number three position).

Obama will chatter about human rights, particularly the oppression in Tibet and the imprisonment of dissident Liu Xiaobo, who was awarded the 2010 Nobel Peace Prize in absentia because he was "otherwise detained." Expect to hear about the incarceration of human-rights attorney Gao Zhisheng, among countless others. But these concerns are tantamount to watching a few snowflakes in a blizzard. Complaining to Communists about human rights violations is a waste of air.

There will also be talk about the impending environmental catastrophes created by China's economic expansion, and, of course, China's impact on global climate change.

However, U.S. negotiators are rightly more concerned about bilateral trade, the valuation of U.S. and Chinese currencies, Chinese restrictions on export of its natural resources, re-establishment of military-to-military communications, China's substantial military buildup and Beijing's influence in North Korea, where the Chinese plan an economic consortium, undermining U.S. efforts to isolate Pyongyang's dictator, Kim Jong Il.

Hu, however, is more concerned about China's substantial investment in the U.S., a two-edged sword, which is the trillion-dollar gorilla hovering over every other discussions or negotiations between the two nations. The size and strength of that gorilla is a game-changer.

The evolution of U.S./China relations over the last 60 years can be characterized by three distinct eras.

In 1949, a Soviet-inspired Marxist/Stalinist revolution subordinated the Chinese people to the will of a Communist tyrant, Mao Tse-tung. Mao's 25-year reign of terror resulted in the deaths of some 30 million Chinese during his "Great Leap Forward" to centralize China's agricultural production. He also supervised the near-complete eradication of China's cultural and intellectual advances during the "Cultural Revolution" of the 1960s, when his Red Guard murdered more than a million Chinese academic and cultural leaders and exiled the rest to communal farms for "re-education." (Indeed, the Red on the Chinese flags flying in our nation's capital this week is symbolic of horrendous bloodshed.)

During this infamous era of tyranny, the U.S. and Red Chinese governments were Cold War adversaries of the first order.

A second era of U.S.-Sino relations began in 1972, when President Richard Nixon traveled to the People's Republic of China as a first step toward opening diplomatic channels and normalizing relations. This rapprochement was codified over the next three decades with accelerated trade agreements. The strategic aim of these trade arrangements in world markets was to create economic bonds that would deter China from expansionist mischief.

That strategy worked reasonably well until 2008, when Leftist economic policies helped bring about a crisis of confidence in the U.S. economy and a politically fortuitous collapse of the U.S. securities markets. Obama and his socialist bourgeoisie rode that crisis into office.

Subsequently, Red China has underwritten the largest share of Obama's socialist plan for economic recovery, and now holds more than $1 trillion in Treasury debt (about 7 percent of our total outstanding debt). Of course, Obama's plan has accomplished little other than saddling future generations with enormous amounts of debt.

China's U.S. debt holdings have, however, given rise to a new era of relations with China, replacing the Cold War's mutually assured destruction (MAD) nuclear standoff doctrine with a new version of MAD based on an economic standoff doctrine.

Hu says, "We should abandon the zero-sum Cold War mentality." But the power of China's economic leverage can't be understated, and history provides no record of a Communist nation holding such leverage over a Capitalist nation.

The Chinese had no means of attacking North America with nuclear weapons during the Cold War, and they relied on the protective umbrella of the Soviet Union's offensive capabilities. But in this new era, the Chinese have the ability to manipulate their massive U.S. debt holdings; should they cut off their U.S. credit line and/or dump their U.S. securities, it could propel our economy into a tailspin.

Red China is well aware of the cards they hold in this latest era.

Both parties know, however, that should China take any action that is detrimental to the U.S. economy, the result would have dire implications for the welfare of their own economy. There are 1.2 billion Chinese, 800 million of whom are, in effect, slave-laborers in Chinese factories; these laborers receive an economic benefit of about $2,400 per year. If the Chinese Communists want to forestall a national revolution, they must make every effort to improve the standard of living of those laborers or risk widespread civil unrest. Such an improvement will require economic expansion in the range of 10 percent annually -- a daunting task that includes other risks, including runaway inflation. (In 2010, China's GDP grew 10.3 percent.)

"We have an enormous stake in each other's success," Obama proclaimed in yesterday's press conference with Hu. "Nations, including our own, will be more prosperous and more secure when we work together," he said.

Hu concurred, saying, "We both stand to gain from a sound China-U.S. relationship, and lose from confrontation."

However, recall if you will that Red China is still under the oppressive thumb of Hu's Communist regime, and they do not answer to "the People." Mao may be dead, but his iconic image is ubiquitous in both urban and rural China, even appearing on the face of every denomination of Chinese currency. The Russian people tore down statues of V.I. Lenin soon after the collapse of the Soviet empire. The prevalence of Mao's image is a good indication that the Red Chinese government is still alive and well, despite reports of its imminent demise.

Needless to say the Red Chinese government, like all tyrannical regimes, does not handle civil unrest politely, as aptly demonstrated at Tiananmen Square 22 years ago. A likely response to civil discord would be the absorption of unemployed Chinese into the Red Army and service corps, bolstered by a resurgence of Communist nationalism. Predictably, that would be followed by some "creative activity" in the region to take the minds of the Chinese people off their empty stomachs.

Thus, China's rapid military expansion in the Pacific is a looming threat for Australia, Japan, Taiwan, South Korea, Indonesia and, of course, the U.S., as we have critical national interests in the region.

It has been said that "as goes the U.S. economy, there goes the world." The same can now be said of China, and this demands the full and undivided attention of every Western nation.

In the end, however, amid all of the posturing and pretense, the most valuable natural resource that the United States has in limitless quantity is Essential Liberty. Though Obama and his Leftist cadres are doing all they can to constrain that resource, it is the export of Liberty to China that will best protect our own national interests.

Semper Vigilo, Fortis, Paratus et Fidelis!

Mark Alexander
Publisher, The Patriot Post

[G M]

"The mindboggling naivete and general pussiness of our Commander in Chief is doing damage for which we are going to pay dearly for a very long time."

If you look like food, you will be eaten.

[Crafty_Dog]

The Simmering Strategic Clash of U.S.-China Relations

Chinese President Hu Jintao met with U.S. President Barack Obama on Wednesday for the long-awaited bilateral summit and grand state dinner. The night before, Hu met with Obama, Secretary of State Hillary Clinton and National Security Adviser Tom Donilon to discuss strategic issues.

Precious little was novel in Hu’s and Obama’s comments to the press Wednesday, though there were a few points worth noting. Obama stressed that U.S. forward deployment of troops in the Asia-Pacific region brought the stability that was necessary to enable China’s economic rise over the past 30 years — a thinly veiled warning to China against acting as if the United States were an intruder. Obama emphasized, as his generals have, that the United States has a fundamental interest in free and secure passage in international waters in the region, a push against China’s growing military clout in its peripheral seas. But aside from these points, Obama’s tone was relatively meek. Hu, for his part, was also relatively meek. He reiterated the need for ever deepening cooperation — i.e. for the United States not to confront China over disputes — and in particular the need for the United States and China to work multilaterally — i.e. for the United States to not act unilaterally.

“Hence we have an unresolvable strategic clash; tempers are simmering, giving rise to occasional bursts of admonition and threat.”
The lead-up to the summit prepared the world for positivity and good feelings. U.S. Treasury Secretary Timothy Geithner, in a speech last week, advertised an optimistic estimate of the growth of U.S. exports to China and seemed relatively satisfied with progress on China’s appreciation of the yuan. Obama echoed Geithner’s points, showing optimism about China as a model market for his national export initiative, and raising, but not harping on, the undervalued currency. Strategic disagreements were not allowed to interfere with the pageantry. Though the United States has warned that North Korea’s ballistic missiles pose a threat to the homeland, implying that China’s lack of willingness to restrain North Korea is extremely serious, nevertheless both sides signaled their agreement on moving toward resuming international negotiations to contain the problem.

Beijing and Washington have good reason to avoid confrontation. Both are overburdened with problems entirely separate from each other. The United States is consumed with the search for jobs while attempting to restore balances of power in the Middle East and South Asia so it can withdraw from these regions. China’s rapid economic growth is becoming more and more difficult to manage, and a slowdown could trigger a powder keg of social discontent. The United States could force an economic crisis on China, and China can, if not force the United States into crisis, at least make its strategic quandary far more complex (for instance by emboldening North Korea or helping Iran cope with sanctions). Hence, despite nationalist factions at home, Washington and Beijing continue to court stability and functionality.

To give an appearance of improving relations, all China need do is let the yuan crawl a bit upward, make a gigantic $45 billion purchase of U.S. goods (a reasonable use of surplus dollars timed to fit the meeting), promise to make U.S. products eligible for government procurement (which does not mean they will always be in fact procured), and launch another of its many (mostly ineffective) crackdowns on intellectual property theft. All the United States needs do is allow some relatively high-tech goods to be sold (though without loosening export restrictions in general) and refrain from imposing sweeping trade tariffs (though retaining the ability to do so any time). And to show the talks are candid, both sides can also offer faint words of criticism on topics like U.S. dollar hegemony or human rights violations.

This is, for the most part, the basis that U.S.-China relations have operated on since the 1970s — deepening economic interdependence coinciding with military standoffishness, and political mediation to keep the balance. The balance is getting harder to maintain because the economic sphere in which they have managed to get along so well is suffering worse strains as China becomes a larger force and the U.S. views it as a more serious competitor. But it is still being maintained.

But the strategic distrust is sharpening inevitably as China grows into its own. Beijing is compelled by its economic development to seek military tools to secure its vital supply lines and defend its coasts, the historic weak point where foreign states have invaded. With each Chinese move to push out from its narrow geographical confines, the United States perceives a military force gaining in ability to block or interfere with U.S. commercial and military passage and access in the region. This violates a core American strategic need — command of the seas and global reach. But China cannot simply reverse course — it cannot and will not simply halt its economic ascent, or leave its economic and social stability vulnerable to external events that it cannot control. Hence we have an unresolvable strategic clash; tempers are simmering, giving rise to occasional bursts of admonition and threat. Yet unresolvable does not mean immediate, and both sides continue to find ways to delay the inevitable and inevitably unpleasant, whether economic or military in nature, confrontation.

[G M]

"To give an appearance of improving relations, all China need do is let the yuan crawl a bit upward, make a gigantic $45 billion purchase of U.S. goods (a reasonable use of surplus dollars timed to fit the meeting), promise to make U.S. products eligible for government procurement (which does not mean they will always be in fact procured), and launch another of its many (mostly ineffective) crackdowns on intellectual property theft. All the United States needs do is allow some relatively high-tech goods to be sold (though without loosening export restrictions in general) and refrain from imposing sweeping trade tariffs (though retaining the ability to do so any time). And to show the talks are candid, both sides can also offer faint words of criticism on topics like U.S. dollar hegemony or human rights violations."

http://seattletimes.nwsource.com/html/businesstechnology/2013975730_chinaorder20.html?prmid=related_stories_section

China's 'new' jet orders anything but

The Truth Needle | The big Boeing order from China trumpeted during Chinese President Hu Jintao's state visit to the White House is actually a re-announcement of previous orders.

By Dominic Gates


The claim: A White House fact sheet released Wednesday to coincide with the state visit of Chinese President Hu Jintao said: "In preparation for this visit, several large purchases have been approved including for 200 Boeing airplanes. ... The approval, the final step in a $19 billion package of aircraft, will help Boeing maintain and expand its market share in the world's fastest growing commercial aircraft market."

What we found:

The deal President Hu signed does not include any new jet orders.

Delivering the formal approval during Hu's visit is designed to make the Chinese government appear responsive to U.S. concerns about the balance of trade.

However, all of the airplanes in the sale were announced and booked by Boeing as firm orders over the past four years. Chinese airlines had already paid nonrefundable deposits and signed contracts for the jets, most of them as far back as 2007.

[G M]

http://www.nypost.com/p/news/national/chinese_tiger_ate_us_dove_for_lunch_7Ro396zi1n6vZrCwLsp05M

WASHINGTON -- Who did you think would come out on top if you put a tiger and a dove in the same room together to work out their differences?

[G M]

**This could go into education, but this is why I fear China more than anything else.

http://pajamasmedia.com/blog/many-students-learn-little-to-nothing-in-college-surprise/?singlepage=true

Your son probably ended up in my class. He was the kid who slouched in his chair and sat in the back entertaining himself with his Nintendo or cell phone. At least, that’s how he behaved when he bothered to show up for class. Sometimes he disrupted class by coming late and being sure to walk across the front of the lecture hall to draw attention to himself. I wished that on such occasions he had the grace to have pulled his Levis above his underwear. But that was too much to ask.

Of course, he got a degree.

We have to sit through lectures by our incomparable elected officials and our distinguished administrators telling us how many people the state needs by such and such a year with college degrees. We know how to give degrees. We’re good at that. But an education? Even God could not compensate for the lack of skills, the lack of interest, and the lack of raw talent your son brought to us. Social promotion is not restricted to high schools any more. After all, somehow we have to pay for all those buildings, athletic facilities, and shopping malls that so impressed you.

Now your son is carrying a load of debt that he can’t pay off, and he can’t find a meaningful job because he really has no skills that translate into the marketplace. He never committed himself to the discipline, rigor, and fortitude it takes to get a meaningful education. He didn’t know what to do with himself; you didn’t know what to do with him, and you thought he should have a college experience. He did, in the sense that four years of recreational sex, hard drugs, and bars that are open late into the night provided him with a college experience.

You would have been better off giving him the cash to invest and sending him to the Caribbean or Vegas for several weeks every year where he could have indulged his sexual appetites and legally smoked ganja. Financially you would have both been ahead. So too would we.

Now, we have an overly credentialed population carrying an enormous debt.

These are people who feel they deserve good-paying jobs. After all, the education establishment told them that having a college degree was worth millions. Well it is, if it is in the right subjects and you did well. A political science degree is not exactly equal to a degree in computer engineering, although the campus feminists are always grousing over how much less they are paid than males of equal rank and seniority. How convenient to forget that the liberal arts, which possess no competitive external marketplace, are dominated by women, and engineering, science, and mathematics are dominated by men.

The next financial bubble is out there. It is comprised of people like your son who are carrying enormous debt without any prospect of paying it off. They are going to default. It’s our fault, you say. Well, you say that now. But if we gave your son the grades he deserved you both would have screamed foul and due processed us to death. If your son is a member of some protected class, we would have had to defend against the accusation that we discriminated against him. Anyhow, he got more than he deserved, and the rest of us subsidized his education directly or indirectly with our tax dollars. Of course, you do know that we are going to have to pick up the defaults, just as we picked up the sub-prime mortgages.

Oh yes, if you think the statistic that half don’t learn anything in the first two years is terrible, how does this one grab you? After four years 36% did not experience significant educational improvement. And that statistic is worse than it appears, because at many institutions nearly half the students drop out after two years. So among the self-selected that continued, more than a third learned almost nothing in four years of college.

And if you controlled by academic major and prior preparation, you would find that these failures cluster. How? It’s easy enough to figure out, even if you never finished college.

[ccp]

Correct. It isn't the education in general it is what type of education.

Here in NJ we have *enormous* numbers of Asians and Middle Easterners pouring in getting IT jobs, MDs, opening businesses (patel-hotel-motel), working in or owning franchises in banks, 7 -11s, dunkin donuts, gas stations and on and on and on.  Yet I have countless American borns coming in complaining of their stress and how it is not worth looking for a job that doesn't pay them what they want when they can easily get the same or so in unemployment checks.


The other day they were interviewing some sort of College football player who was some sort of big shot player and all.  He was speaking and couldn't even speak decent English.  I am thinking what a joke.  This guy gets a college degree and can't speak decent English.  I could never imagine anyone other than a jock getting all the way through a four year college without being able to put a decent grammatically correct sentence together.

The left perpetuates the nanny state and it only gets worse, spreads like a metastatic cancer.  Chinese and Indians will run us over. The Mexicans they are a different breed.   Education does not seem to be a factor for them like the others I noted.  It appears to be cultural.

[Crafty_Dog]

Alright gents, lets take this to the Education thread on the SCH forum please.

[G M]

http://www.theepochtimes.com/n2/content/view/49822/

Chinese Pianist Plays Propaganda Tune at White House
US humiliated in eyes of Chinese by song used to inspire anti-Americanism
By Matthew Robertson
Epoch Times Staff Created: Jan 22, 2011 Last Updated: Jan 23, 2011


Lang Lang, a Chinese pianist, plays the piano at the White House on Jan. 19, 2011. The music he is playing is the theme song from an anti-American propaganda movie about the Korean War. (Screenshot from Youtube)
Lang Lang the pianist says he chose it. Chairman Hu Jintao recognized it as soon as he heard it. Patriotic Chinese Internet users were delighted as soon as they saw the videos online. Early morning TV viewers in China knew it would be played an hour or two beforehand. At the White House State dinner on Jan. 19, about six minutes into his set, Lang Lang began tapping out a famous anti-American propaganda melody from the Korean War: the theme song to the movie “Battle on Shangganling Mountain.”

The film depicts a group of “People’s Volunteer Army” soldiers who are first hemmed in at Shanganling (or Triangle Hill) and then, when reinforcements arrive, take up their rifles and counterattack the U.S. military “jackals.”

The movie and the tune are widely known among Chinese, and the song has been a leading piece of anti-American propaganda by the Chinese Communist Party (CCP) for decades. CCP propaganda has always referred to the Korean War as the “movement to resist America and help [North] Korea.” The message of the propaganda is that the United States is an enemy—in fighting in the Korean War the United States’ real goal was said to be to invade and conquer China. The victory at Triangle Hill was promoted as a victory over imperialists.

The song Lang Lang played describes how beautiful China is and then near the end has this verse, “When friends are here, there is fine wine /But if the jackal comes /What greets it is the hunting rifle.” The “jackal” in the song is the United States.

The name of the song is “My Motherland,” originally titled “Big River.” In an interview broadcast on Phoenix TV, the first thing Lang Lang is quoted as saying is that he chose the piece.

He then said, “I thought to play ‘My Motherland’ because I think playing the tune at the White House banquet can help us, as Chinese people, feel extremely proud of ourselves and express our feelings through the song. I think it’s especially good. Also, I like the tune in and of itself, every time I hear it I feel extremely moved.”

He expressed this idea more frankly in a later blog post, writing: “Playing this song praising China to heads of state from around the world seems to tell them that our China is formidable, that our Chinese people are united; I feel deeply honored and proud.”

[G M]

http://www.cbsnews.com/stories/2011/01/23/world/main7274614.shtml

Jan. 23, 2011
Chinese Stealth Jet May Use U.S. Technology
Experts Believe Newly-Unveiled High-Tech Fighter May Borrow Technology Taken From U.S. Jet Shot Down in 1999

[G M]

http://www.cnbc.com/id/41643598

China Flexes Muscles With US As Biggest Creditor: WikiLeaks

[Crafty_Dog]

http://www.latimes.com/business/la-fi-rare-earth-20110220,0,4161956.story
http://online.wsj.com/article/SB10001424052748703561604576150301821467250.html
http://finance.yahoo.com/news/Rare-Earths-Stocks-Get-A-Lift-indie-1668243288.html?x=0&.v=1

[G M]

So, depending on what happens with the so-called "Jasmine Movement" in China, REE might get very expensive.

I don't expect the movement to do much but increase China's prison camp population/supply of organs for sale.

[Crafty_Dog]

The Chinese opera starring Huawei Technologies Co. and Washington regulators hit another high note Friday when a spurned Huawei issued a public plea for understanding, fairness—and access to the rich U.S. telecom market.

Why has Washington repeatedly said no to Huawei as the China telecom giant tries to tap into the lucrative U.S. market? The Journal's John Bussey and Simon Constable discuss.

There are two lessons to draw from all the yodeling:

First, this drama isn't just about the Chinese suitor Huawei. It's about China Inc. and cybersecurity in the U.S. Because of that, Huawei may not be getting into the U.S. market in a big way anytime soon.

And second, Huawei—one of the biggest suppliers of telecom equipment in the world—may be the least of America's problems when it comes to thwarting aspiring cyberspies.

Huawei's latest travails stem from a tiny deal the company struck in California. It bought some patents and hired some employees from an outfit called 3Leaf Systems that did work in cloud computing. The Pentagon demanded Huawei retroactively seek approval of the transaction from a secretive panel called CFIUS, which reviews foreign investment that might threaten national security.


Huawei cried foul and said the deal didn't merit review because it wasn't an outright acquisition. Sens. Jim Webb and Jon Kyl and other U.S. lawmakers fired back, likening Huawei to a dangerous arm of communist China intent on snatching U.S. secrets. This month, CFIUS essentially ordered Huawei to unwind the purchase. As the dust settled, a Chinese government spokesman condemned the decision and, in an ironic footnote, grumbled that the U.S. should be "more transparent" in how it treats foreign investors.

Then on Friday, Huawei publicly challenged the U.S. to investigate the company and clear the air.

"Huawei is Huawei," says Bill Plummer, the company's spokesman. "It's a multinational company. It isn't China. It shouldn't be held hostage to the tense relationship between the two governments." Huawei's supporters say U.S. companies are missing out on quality Huawei gear that's safely sold to virtually every major phone company in the world.

Maybe so, but a range of intelligence agencies that sit on CFIUS, or the Committee on Foreign Investment in the U.S., appear to feel differently. Huawei's plea "seems disingenuous," says an individual familiar with the government's thinking. "Why come out with that offer publicly? We've been asking for transparency" from the company for years.

The problem is that Huawei lives in a certain context. Its founder served in the People's Liberation Army. The company has prospered greatly in its home market and has grown almost overnight into a global giant. And while Huawei insists it is entirely independent of the Chinese government, the company thrives in an authoritarian country where success on so large a scale is usually carefully observed, and carefully prescribed. There are few subjects of greater interest to Beijing than telecommunications and technology—and creating national champions in both.

Rightly or wrongly, Huawei to many people in Washington is a proxy for China. They fear the company's equipment may contain bugs that could spy on American industrial secrets, shut down communications during a conflict, or make networks easier to hack. Huawei says that's nonsense.

CFIUS proceedings are secret, and a spokeswoman declined to comment on the Huawei case. But actions speak loudly. The committee, which includes the departments of Homeland Security and Defense, has blocked Huawei's access to the U.S. repeatedly, including Huawei's bid to buy electronics maker 3Com Corp. in 2008, its effort to upgrade Sprint Nextel Corp.'s network in 2010, and now the 3Leaf deal.

Noting the importance of context, a former intelligence official says: "You have senior officials in Washington going to work every week and their assistants telling them, 'Sir, the Chinese have hacked into your system and are reading your email again. We're trying to get them out. Don't use your computer.' China is contemptuous when we complain about this, and that probably deepens the reaction toward Huawei," he says.

Even Washington knows that at the end of the day Huawei is but a blip on a much larger radar screen of worry. Virtually every technology company is plugged into a global supply chain and gets its products from multiple sources. A given piece of consumer or industrial electronics can cross borders dozens of times as it is designed, coded and assembled before landing in the U.S. The rogue might be anywhere: in China, or in the piece of equipment stamped INDIA that was preassembled in China.

"The cyber side is where the real national-security issues are growing exponentially, the vulnerabilities created by the global supply chain," says Nova Daly, a consultant with Wiley Rein in Washington who previously managed the CFIUS program at the Treasury Department. "We need clear cyberpolicy from the administration and Congress."

That effort is under way, there are some early steps to better vet the source of key electronics distributed in the U.S. Scrubbing software and hardware before it crosses the border is a tricky business. Experts say it's almost impossible to find every bug.

So trusting the source of origin becomes all the more important.



Read more: http://online.wsj.com/article/SB10001424052748704293304576169080516080892.html#ixzz1FHHcON2a

[G M]

I don't want Huawei anywhere in the US, in any way.

[Crafty_Dog]

BEIJING—China announced plans to increase its defense budget by 12.7% this year, a pickup from last year's sharply lower growth that comes amid fresh confrontations over territorial issues with Japan, South Korea and the Philippines.

China expects to spend 601.1 billion yuan ($91.4 billion) on defense in 2011, up from 533.4 billion yuan last year, Li Zhaoxing, spokesman for the National People's Congress, said Friday, ahead of the start of the legislature's annual session on Saturday.

Mr. Li said the military budget would be used for purposes including "appropriate armament development," training and human resources, while stressing that it remained relatively low as a proportion of China's GDP and overall budget, and dismissing concerns that it threatened neighboring countries.

"China's defense spending is relatively low in the world," he said. "Every bit of China's limited military strength will be used for safeguarding national independence, sovereignty and territorial integrity, and this will not pose a threat to any country."

The projected rise is faster than last year's 7.5% increase—the slowest clip in decades—but is significantly slower than the roughly 19% annual growth in years before 2010.

The headline figure does not, however, include key items such as arms imports and the program to develop a stealth fighter and an aircraft carrier, according to foreign military experts who estimate that China's real defense spending is far higher.

The figure's announcement also comes amid signs that China's growing economic and military power is prompting other nations in the region to beef up their own militaries, pushing Asia into a new arms race, and in many cases to shore up defense ties with the U.S.

Japan, which revised its national-defense guidelines last year to focus more on the threat from China, expressed fresh concern Friday about the rise in Chinese military spending.

Japanese Foreign Minister Seiji Maehara told reporters that China's defense expenditure was "very high," and urged the Chinese government to be more transparent about how it planned to use its newfound military firepower.

"Whether it should be regarded as offensive or defensive would require a close look," he said, according to Japan's Foreign Ministry.

On Wednesday, Japan scrambled fighter jets to chase off two Chinese military planes which it said flew within 34 miles of disputed islands in the East China Sea, which are known as Senkaku in Japan and as Diaoyu in China.

Japanese government spokesman Yukio Edano said Japan would not protest formally as the Chinese planes did not leave international airspace, but he also voiced concern over China's growing military power and said Japan would monitor the situation. China's Foreign Ministry didn't immediately respond to a request for comment.

Relations between Asia's two biggest economies plunged to their lowest ebb in years in September following collisions near the islands between two Japanese coast guard patrol boats and a Chinese fishing vessel.

China's more forceful stance on that and other territorial issues last year also alarmed other countries in the region.

On Wednesday, the Philippines deployed two war planes to protect oil explorers who complained that they were being harassed by two Chinese patrol boats in a disputed area of the South China Sea.

The Philippine government demanded an explanation Friday for the incident at Reed Bank near the Spratly Islands, which are claimed by China, Brunei, Malaysia, Taiwan, Vietnam and the Philippines.

Chinese Embassy spokesman Ethan Sun reiterated his country's claim to the Spratly Islands and adjacent waters, but said Beijing was committed to maintaining peace and stability in the area and resolving disputes through peaceful negotiations, according to the Associated Press.

South Korea's Coast Guard said Friday it seized two Chinese fishing boats and their crews on Thursday after they were found fishing illegally in South Korea's Exclusive Economic Zone, 64 miles southwest of Keokrulbiyeol island in the west sea.

During the process, one South Korean policeman was hurt by a weapon wielded by Chinese fishermen, and one Chinese fisherman was shot in his leg, the coast guard said.

China's Foreign Ministry didn't immediately respond to a request for comment on that incident.

But Chinese officials and academics have toned down their rhetoric this year in an apparent bid to address concerns that China plans to use its expanding military clout to assert its territorial claims, and to challenge U.S. military supremacy in the Asia-Pacific region.

In January, China jolted the region with a test flight of a new stealth jet fighter, indicating that China is further along in using the advanced technology than previous Pentagon statements had suggested.

China is also developing an antiship ballistic missile that could threaten U.S. naval vessels in the Asia-Pacific region, where the U.S. has long been dominant.

However, Mr. Li pointed out that China's military spending accounted for only about 6% of China's national budget, which he said was lower than in recent years—and well below the level of the U.S.

The defense budget "will see some increase, but the ratio of spending to GDP is quite low -- lower than in many countries," he added.

[G M]

**Click the link to see the CNBC interview

http://www.cnbc.com/id/42067433

Barack Obama Is the New Jimmy Carter: Niall Ferguson
Published: Monday, 14 Mar 2011 | 7:17 AM ET

By: CNBC.com


The current inflation scenario is reminiscent of the 1970s and the transition of economic dominance from the United States to China is already well under way, Harvard Professor Niall Ferguson told CNBC Monday.

Geopolitical events all add up "to a pretty bearish scenario because of all the inflation implications we're seeing right now," Ferguson said.

"You already had massive deficits and money printing in the developed world," he said. "On top of that you had enormous demand-side pressure from China relative to commodities."

"Now you've got the prospect of massive geopolitical disturbance in the great oil-producing centers of the world," he added. "That has to be a pretty inflationary scenario."

"At best case, we're going to re-run the 1970s, only with Barack Obama instead of Jimmy Carter in the White House," Ferguson said.

Globally, Western dominance peaked in the 1970s and the rise of Eastern dominance is evident with China taking over the top spot as world's biggest manufacturer, he said.

The dollar will likely keep its status as a reserve currency for a while, but there is "a sense around the world that exposure to the dollar has higher risk in it," Ferguson said.

[Crafty_Dog]

The United States and China began the third Strategic and Economic Dialogue since the Obama administration took office. The range of topics is expanding, and both sides are maintaining the warm relations that they began in the beginning of the year. But the underlying strains on the relationship are very much present and can burst forward at any point.

What’s new to this round of dialogue is that the two sides will initiate a strategic security track of dialogue, which China has just agreed to. This was an American proposal to discuss defense and military matters alongside the normal foreign affairs and economic and financial matters that are discussed at the Strategic and Economic Dialogue. Now the reason this is important is because the U.S. and China have a really irregular past when it comes to sharing information and communicating on their military. Now they’ll be able to broach topics like nuclear disarmament or missile defense or general naval issues and questions about how China intends to use its growing military power in the region. And these topics will be discussed in a format that perhaps could become more regular, although it’s really hard to say; typically, China cuts off military-to-military communications when the U.S. sells a new arms package to Taiwan. Perhaps the hope is that by initiating a new track of strategic security dialogue, that irregularity can be put to an end and they’ll have a consistent means of communicating on the really tricky defense matters that these two countries face, especially going forward.

Now the next point is the economic and financial issues. Looking at the Chinese yuan, this as always is a major topic of discussion. The United States is going to be pressing for China to appreciate its currency faster against the dollar. The yuan has risen by about 5 percent over the past year and the U.S. is glad to see movement there. But at the same time it’s clear that this movement isn’t really very comparable to what’s happened with other currencies, such as the Japanese yen, the euro, the Swiss franc or the British pound, all of which have risen much more dramatically against the dollar in the past year. But the U.S. isn’t really going to limit its focus to the yuan. But now, Washington wants to expand the range of topics including interest rate ceiling, the idea being that if China can raise the interest rates for its vast pool of depositors at home, they will make more money on their savings and eventually they’ll be able to build up savings and feel more comfortable, perhaps even consume more. And at the same time that would force China’s banks to be much more particular about what rates they lend to their state-owned companies. In other words, it would force a total rebalancing of the Chinese economic system in which consumers would have more money and corporations and industry would have to pay more for the capital that they borrow.

On the strategic track, the truth is that China has a lot to be anxious about going forward. On the one hand, the U.S. has introduced the topic of Middle East unrest and how that applies to Chinese society, implying that China has this large problem of growing social frustration. How is China going to deal with that? Is it going to use force to quell protests or is it going to be proactive and improve living standards for people? China is afraid that the U.S. is simply going to be fanning the flames of domestic unrest in order to weaken China and take advantage of it. So obviously there’s a lot of distrust there, especially with the U.S. taking this very proactive stance on Internet movements, social networking and projecting democratic values across the world. On the other hand, in South Asia, with the U.S. having killed Osama bin Laden, we’re getting closer to a time that China realizes the U.S. will withdraw from Afghanistan and take less of a role in the region. That will put more of a burden on China and its ally Pakistan to stabilize the region, and China will be concerned that militancy running wild in the area will impact its western borders. So China’s looking at having to take a much bigger role in stabilizing the area and in making sure that Pakistan does its part to prevent militancy from spreading.

And finally, China fears that if the U.S. does withdraw successfully from South Asia, that the increased freedom of maneuver that the U.S. gains will in fact later be brought to bear on China itself, as the two are seeing much greater strategic competition, and a number of U.S. allies in the region are demanding that the U.S. take a greater role in the Asia-Pacific to counterbalance China’s rising power.

[Crafty_Dog]

Doubts Cloud Future of U.S.-China Relations

The third round of the Strategic and Economic Dialogue between the United States and China started May 9. Cabinet-level officials on both sides emphasized that cooperation in all categories is strong and growing. They credited the January meeting between Presidents Barack Obama and Hu Jintao with establishing a new period of warm relations. Both sides expressed confidence that disagreements on everything from economic policy to human rights can be overcome.

Yet the optimistic tone seems to rise in proportion with the deepening of doubts in the relationship. Most recently, events in South Asia have complicated matters. While the United States achieved a victory in killing Osama bin Laden, the event has clouded its relations with Pakistan. China and Pakistan are historical and contemporary allies with mutual antagonism toward India. While China has no trouble formally applauding the death of bin Laden — and using it to highlight its concerns about the East Turkestan Islamic Movement — it is shocked at the Americans’ open criticism of Pakistan in the aftermath. U.S. actions have stirred up public anger in Pakistan in a way that would seem to pose unnecessary risks to U.S.-Pakistani relations and regional stability. China senses that U.S. foreign policy is shifting in important ways.

When the terrorist attacks of 9/11 occurred, the United States and China were in the midst of rocky relations symbolized by the bombing of the Chinese Embassy in Belgrade and the EP-3 incident in Hainan. China supported America’s new war on terrorism, sensing an opportunity to crack down on militants in its far west and to enjoy Washington’s refocusing on a different region. China also lent Pakistan assistance as the latter withdrew support for the Taliban to assist the U.S. invasion of Afghanistan, and Beijing pledged to support U.S. counterterrorism efforts as long as the United States reciprocated. This arrangement served as a basis for new cooperation.

“The very topics to be included in the strategic security talks read like a list of the new threats the two countries pose to each other: nuclear proliferation, missile defense, cyber-security, and the militarization of space.”
As the United States waded deeper into Afghanistan and Iraq, China faced a period of extraordinary opportunity. Beijing had just joined the World Trade Organization and benefited from having the doors to export markets flung open during a global credit boom. Although Washington complained about China’s delays on economic liberalization, Beijing found that a little currency appreciation, along with other adjustments here and there, was enough to fend off American pressure so long as Washington was embroiled in crises in the Middle East.

The arrangement began to weaken toward the end of the decade. Fast-growing China, emboldened by the global economic crisis in 2008, began to test the waters in its region to see where its rising clout would give it greater bargaining power. Meanwhile, the United States began to see that its relative neglect of the Asia-Pacific region had opened up a space that China was seeking to fill. Washington declared its return to the region in 2009, but it has not yet been able to put much effort behind the initiative. China enjoyed a bout of assertiveness in its periphery, provoking a U.S. backlash. By 2010 the situation had grown bleaker than it had been for a long time.

This is the context in which Obama and Hu relaxed tensions in January 2011, an arrangement that appears to be holding for now. China’s yuan is rising and Beijing is cooperating on North Korea. Washington remains preoccupied with foreign wars and domestic troubles and is not willing to confront Beijing. Meanwhile, the two are making economic trade-offs. Both sides recognize underlying pressures but point to the strategic and economic talks as a means of containing their disagreements. They are specifically talking up the new “strategic security” dialogue as a way to bring top military leaders into the civilian dialogue. Washington hopes the dialogue will provide a forum that will eliminate the problems arising from the intermittent military communication and mixed signals sent from China’s military and civilian leaders.

Despite efforts to manage tensions and delay confrontation, the relationship looks set to deteriorate. The very topics to be included in the strategic security talks read like a list of the new threats the two countries pose to each other: nuclear proliferation, missile defense, cyber-security and the militarization of space.

On a deeper level, bin Laden’s death is a harbinger of the coming U.S. withdrawal from Afghanistan. This move will leave China with the burden of suppressing militancy and helping Pakistan do the same. While the United States prods Beijing over the implications of Arab popular unrest for the future of China’s political system, Beijing points to the threat of instability in the Persian Gulf, hoping to prolong China’s strategic opportunity — and mitigate threats to its oil supplies — by keeping Washington preoccupied there. China sees American commitment waning in the Middle East and South Asia and worries that its priorities will next shift to containing China’s rise.

China is an emerging power attempting to expand its influence into a large space where it has not felt challenged for more than a decade. But ultimately the United States views the Asia-Pacific theater as one critical to its global strategy and to the naval supremacy it forged in the fires of World War II. The two countries have yet to settle their spheres of influence in this region, and dialogue alone will not accomplish such delineation. When U.S. Secretary of State Hillary Clinton said the U.S.-China dialogue should “demystify long-term plans and aspirations,” she meant the United States wants to make sure that China does not seek regional hegemony. Washington is bound to try to undercut any such claimant. In other words, since U.S. hegemony is not vanishing, the “demystifying” is up to Beijing.

None of this is to say the United States and China cannot cooperate further. Chinese State Councilor Dai Bingguo struck a sincere tone May 9 when he recalled that 2011 is the 40th anniversary of the United States and China’s “ping-pong diplomacy” — the ice-breaker that allowed for detente during the Cold War. Dai said the only reason for a 70-year-old like himself to engage in diplomacy is to make sure this detente continues into the future. However, Dai’s comments also called attention to the generational change sweeping China’s leadership and the doubts about the durability of the Sino-American Cold War arrangement. In this context, Clinton’s talk of “forward-deployed diplomacy” — in this case, re-engagement in the Asia-Pacific — made for a stark contrast that underlined the doubts.

[Crafty_Dog]

This week was a big week in China news. The United States and China sat down for strategic and economic dialogue, China’s new economic statistics revealed that the economy is starting to slow its pace of growth a little bit and beneath all of this there is a growing awareness that the U.S. is going to be putting more pressure for China to open up and more rapidly reform its economy. The United States and China concluded the strategic and economic talks this week with an agreement to hold consultations on the Asia-Pacific region. That’s really the big takeaway from this round of dialogue, but looking at the economic issues you can see a number of technical agreements that the two sides made.

China gave some concessions — they said the U.S. would be able to invest more in Chinese stocks and bonds, U.S. companies would be able to offer mutual funds or car insurance in China. They also pledged that the indigenous innovation policies that have been so controversial will not really apply to government procurement contracts, meaning that U.S. companies would be able to be considered at any level for Chinese government. We’ll see how that’s implemented, there’s obviously a lot of reason for doubt, but clearly China making that statement and making that pledge to the United States was important. And the Chinese also said that they would stop condoning the theft of intellectual property from the U.S. at least in regards to software that is being used on Chinese government computers. One industry group suggested the U.S. may lose about $8 billion a year because of that kind of theft.

The U.S. concessions had mainly to do with the suggestion that the U.S. will gradually ease the controls on its exports so that China can import more high-technology goods from the U.S. which it was hoping to do. Also, the U.S. said that it would allow more Chinese investment in, and of course there are national security concerns for the U.S. and that will continue to apply on a case-by-case basis. But overall, what China was really demanding was to get more access into the U.S. market, and there is a number of interests in the U.S. of course that would like to see that happen, so the U.S. claims that that will proceed very rapidly going forward.

Now at the same time that the dialogue was taking place, new economic statistics came out of China showing that in the month of April, the pace of growth in China is starting to slow a little bit. This comes as the government has taken over the past year, very, very tiny steps incrementally to moderate the pace of growth, and what we’re seeing is some of that bearing small fruit. We’ve seen that industrial output has started to slow its pace of growth a little bit, and also we’ve seen inflation stabilize a little bit, even sinking slightly compared to the previous month. Inflation of course has been the big worry. We’re still at three-year highs, in terms of inflation, and we’re also seeing asset bubbles grow as people withdraw their money from banks and invest in things that they think will gain in value namely real estate, because they’re afraid of this inflation problem. And we’re also seeing social frustration bubble up in different parts of China because of the rising prices, and that’s not going away. So fighting inflation will remain the priority in the short term even as we’re starting to hear the conversation shift a little bit among experts in China who are starting to see that in the second half of the year the government may have to become more accommodative and push growth a little bit more, which makes sense in terms of a normal Chinese economic cycles.

Now beneath the mostly technical discussions between the U.S. and China, reinforced by these new economic statistics, there is a growing awareness that the U.S. is going to begin to put more pressure on China to open up its economy and reform in ways that bring it into line with mainstream international practice as led by the United States. One event that created dissonance with the dialogue was China registering an $11.4 billion trade surplus for the month of April, but the U.S. is familiar at this point with large trade surpluses on a monthly basis from China and these negotiations are not really about a month by month development. Rather, the U.S. is expecting something much bigger. They’re putting pressure on China gradually to entirely rebalance and transform its economy. They’re aware that many in China are also arguing for this rebalancing to take place, but they’re also aware as the trade surplus shows, that this process is not happening very quickly. Vice Premier Wang Qishan said that China needs to make sure that all of its leaders are on the same page when it comes to this transformation of their economic model. His implication is of course that there are factual disagreements in China that are preventing reforms from happening. While it’s certainly true that there are factional divisions within China, it’s also curious that he would choose this platform and the United States to make that comment and what it suggests is that the Chinese are using these internal divisions as an excuse for the fact that they continue to move very slowly and reluctantly on the reforms that the U.S. is demanding.

[G M]

http://www.washingtontimes.com/blog/watercooler/2011/may/17/gm-sponsors-and-celebrates-soon-be-released-chi-co/

PICKET: GM sponsors and celebrates soon to be released Chi-Com propaganda film

[G M]

http://www.thetruthaboutcars.com/2011/05/the-chinese-are-coming-part-one-a-tale-of-two-nobles/





For years now the Chinese automakers have been the bête noir of the global car industry, inspiring equal parts fear and contempt in boardrooms and editorial meetings from Detroit to Stuttgart. In an industry built on scale, China’s huge population and rapid growth can not be ignored as one scans the horizon for dark horse competitors. And yet no Chinese automaker has yet been able to get even a firm toehold in the market China recently passed as the world’s largest: the United States.
 
Certainly many have tried, as the last decade is littered with companies who have tried to import Chinese vehicles, only to go out of business or radically rethink their strategy (think Zap for the former and Miles/CODA for the latter). Others, like BYD (or India’s Mahindra), have teased America endlessly with big promises of low costs and high efficiency, only to delay launch dates endlessly. In short, a huge gulf has emerged between overblown fears of developing world (particularly Chinese) auto imports and the ability of Chinese automakers to actually deliver anything. No wonder then, that we found what appears to be the first legitimate attempt at importing Chinese cars to the US quite by accident…

[G M]

Yup.  Just look at all that spare bandwidth we have. 

Well, there is the Crafty Doctrine that some clever guy came up with that suggested upsetting the apple cart anyway. Maybe pulling most of the US forces from Trashcanistan proper and placing them in Indian bases on the border of Pure-land might be a gambit consistent with that doctrine?

Any predictions on how BO will respond?

Bwahahahahahaha! A strongly worded letter of concern, or a double-down on the bowing?

[Crafty_Dog]

The Crafty Doctrine was formulated in the context of Afpakia.  Pakistan having a patron in China, perhaps giving it a seaport, is a major new variable.

[G M]

To me, that makes rapid action to implode Pakistan even more critical.

[Crafty_Dog]

By DAN BLUMENTHAL
Most countries celebrated this month's slaying of Osama bin Laden as an unadulterated good, but two of them are reacting with ambivalence. China and Pakistan have found the death of the al Qaeda leader an opportune time to solidify a relationship that has a distinct anti-American odor. Pakistan wants to play the "China card." And China wants to further its narrow national interests, no matter the broader consequences.

Islamabad's reaction to bin Laden's death is understandable if unjustifiable. U.S. special forces felled the terrorist on Pakistani soil without Pakistani foreknowledge. Pakistani leaders felt compelled to appeal to nationalist sentiment by decrying the violation of sovereignty—even if by harboring terrorists Pakistan has lost its right to sovereignty.

It also has reason to fear its standing in Washington. Questions linger about Pakistani knowledge of or support for bin Laden's long stay in Abbottabad. Naturally, there is a steady drumbeat in Washington to reexamine the entire relationship with Pakistan, including the generous provision of aid.

From a Pakistani perspective, it then makes sense to ease the pressure from Washington by embracing China. With a "China card," Islamabad is assured an ally who can stand up for it in international circles as well as provide capital. Visiting Beijing last week, Prime Minister Yousuf Gilani praised China as "an all weather friend"—in stark contrast to you-know-who. President Asif Zardari declared that the Pakistan-Sino relationship was unmatched "by any other relationship between two sovereign countries."

Mr. Gilani also secured the delivery of 50 JF-17 multirole fighter jets. Receiving aircraft from China—already Pakistan's largest supplier of weaponry by far—must have been all the more satisfying coming a month after its arch rival India turned down two U.S. fighter bids. It sent a message that Islamabad's relations with Beijing are more stable than New Delhi's with Washington.


.Beijing offers its ally more support than just fighters. While China announced it was happy that bin Laden was dead, it quickly followed with expressions of sympathy for Pakistan and praise for its less-than-stellar record of fighting terrorism. China's foreign ministry explained that China "will continue to support Pakistan formulating…counter-terrorism strategies based on its own national conditions…." From this point of view, the U.S was supposed to respect Pakistan's "national conditions" while going after the world's most wanted man.

Finally, Pakistan and China agreed that Beijing will operate the strategically positioned port in Gwadar, Pakistan. The port has raised concerns in New Delhi and Washington for the ability it gives the Chinese navy to operate in the Indian Ocean.

These Sino-Pakistani transactions are an intensification of a blossoming relationship. Just last year, China circumvented its obligations as a member of the Nuclear Supplier's Group to sell two new nuclear reactors to Pakistan with no strings attached. An unstable Pakistan with a burgeoning nuclear arsenal is the stuff of nightmare security scenarios for the rest of the world, and yet Beijing decided to sell it more nuclear material.

Pakistan's interests are clear here. But what explains China's disturbing diplomacy?

China's Pakistan policy has three objectives. First, Beijing sees Islamabad as a way to distract India from its great-power aspirations. An India concerned about a Pakistan threat is an India that cannot compete with China. Second, China wants to get into the great-power maritime game by operating ports throughout the Indian Ocean. Chinese projection of maritime power in the Indian Ocean can pose a threat to Indian and American naval mastery. Third, China wants help from Pakistan in keeping Islamic radicals from entering its Western province of Xinjiang.

From a charitable point of view, China is simply advancing its narrow national interests. But China's very concept of its national interest is the problem at hand.

China's pursuit of narrow interests, consequences be damned, is the equivalent of taking a wrecking ball to the current international order. It has pursued its interests before with Iran and North Korea, and the results of that are evident. The only reason China can afford to behave irresponsibly in these cases is because American arms and diplomacy are there to save the day.

Indeed, the international order the United States promotes and maintains—however imperfectly at times—benefits all those who want to join it. It produces public goods like the freedom of navigation in the seas, keeps the peace between great powers and leads in the fight against nuclear proliferation and terrorism that threaten the whole world—including pressuring countries that harbor terrorists, even if it sometimes violates their sovereignty. Washington cannot accomplish these strategic tasks if Beijing actively thwarts it.

China's Pakistan diplomacy offers a glimpse of one possible future in international politics. Beijing is clearly building up its power to challenge Washington's dominance and frustrate its goals, but it doesn't provide a responsible alternative to U.S. primacy. Should China succeed in undermining American aims, the world will not face a choice between Chinese or American leadership. Rather, Chinese behavior is leading to a choice between order and chaos.

Mr. Blumenthal is a resident fellow at the American Enterprise Institute in Washington, D.C.