State Department Official Makes a Moral Equivalency Between China/Arizona on Human Rights

Bill O'Reilly spent almost half his show eviscerating State Department official Michael Posner for drawing a moral equivalency between China and Arizona on the issue of human rights.

QUESTION: Was there any areas in which China sort of turned the tables and raised its own complaints or concerns about U.S. practices around the globe or at home? Can you give some examples there -

ASSISTANT SECRETARY POSNER: Sure. You know, I think - again, this goes back to Ambassador Huntsman's comment. Part of a mature relationship is that you have an open discussion where you not only raise the other guy's problems, but you raise your own, and you have a discussion about it. We did plenty of that. We had experts from the U.S. side, for example, yesterday, talking about treatment of Muslim Americans in an immigration context. We had a discussion of racial discrimination. We had a back-and-forth about how each of our societies are dealing with those sorts of questions. ...

QUESTION: Did the recently passed Arizona immigration law come up? And, if so, did they bring it up or did you bring it up?

ASSISTANT SECRETARY POSNER: We brought it up early and often. It was mentioned in the first session, and as a troubling trend in our society and an indication that we have to deal with issues of discrimination or potential discrimination, and that these are issues very much being debated in our own society.

This statement is yet another triumph of ideology over competence in the Obama administration. It's obvious that the Obama administration has no use for the Arizona anti illegal immigration law. In fact, the administration is so married to this position that it never occurred to Posner that in bringing it up with the Chinese he was making a moral equivalency between the law and the human rights record of China, where there's no free speech, political dissidents are jailed, no freedom of movement, among a host of human rights violations.

In a situation like this, there is only one thing to do. Posner needs to be fired summarily, immediately, and ruthlessly. Until that happens, his statement will be played in a loop by media, his opponents, and all over the internet. Posner will become the poster child for the Obama foreign policy and it won't be a compliment.

There's an irony here. This sort of moral equivalency is called smart power foreign policy which Secretary of State Hillary Clinton described like this.

We must use what has been called smart power — the full range of tools at our disposal — diplomatic, economic, military, political, legal, and cultural — picking the right tool, or combination of tools, for each situation. With smart power, diplomacy will be the vanguard of foreign policy.

The only smart thing to do now is to remove Posner immediately. If he isn't gone by the end of the week, watch for Obama to fall back into the low 40's at least temporarily. That's because this statement will continue to get played in a loop until he is removed.

China's Currency Manipulation

We've all been hearing lately about how China has been manipulating its currency.

China, of course, viewing the US as both a key trading partner but also a rival threatening its own economic, political and military interests, did not just change its tune on Iran because it was the "right thing to do" for an emerging superpower. Some experts believe the key motivation behind the move is the US' willingness to go slow on accusations and trade sanctions based on continued RMB manipulation, which make China's exports cheaper than they should be under a truly floating currency. In other words, if the US punts on a tough line economic policy with China, the communist giant will support our foreign policy agenda to isolate a severe military threat not only in the middle east, but worldwide.

How does China manipulate its currency? What is the effect of that manipulation, and is there anything the U.S. can do to control their manipulation? The mechanism of China's currency manipulation lies in its trade policy. When China sells goods in the U.S. they get paid in U.S. Dollars. After all, that's our currency. Now, in normal free trade, the Chinese would turn around and buy some of our goods with their new wealth. China is different. First, the Chinese government uses coercive taxation and regulations to discourage spending and encourage savings. As a result, Chinese citizens have a savings rate of about 40%. Our savings rate is near zero.

Instead, the Chinese use their new wealth to buy our securities like U.S. Treasury bonds, mortgage bonds, and real estate. This reduces, artificially, the supply of dollars and thus strengthens, artificially, the dollar. By doing so, their goods are cheaper here and ours are more expensive there. This, in turn, artificially gives the Chinese a larger trade surplus against the U.S. This keeps more jobs in China.

The United States allows this willingly. First of all, our government has an insatiable appetite for debt. The U.S. can't stop spending and its being financed, in large part, by the Chinese. A side effect is that all this debt financing gives the Chinese a stronger trading position. Second, the U.S. imposes no penalties or pain on foreigners buying our securities. The Swiss once faced a similar problem and their manufacturing suffered. So, the Swiss imposed heavy taxes on foreigners buying their debt and that financing went down significantly.

The U.S. faces a more complicated problem. The U.S. needs as much foreign debt purchases as we can afford because without it interest rates will shoot up. Another idea is to increase U.S. citizens' savings rate. This seems to be an idea that's easier said than done. So, I asked Ian Fletcher, author of the book Free Trade Doesn't Work, what we can do. Following through on his trade policy proposal, Fletcher says that tariffs would increase savings rates.

Think of savings production minus consumption. So, adding tariffs would decrease consumption. That would increase savings. By doing so, our governments' insatiable appetite for debt could be financed in larger part by our own citizens. China would be in a smaller position to manipulate its currency. Our trade deficit would decrease.

Watered Down Iran Sanctions

The sanctions against Iran have been watered down to satisfy Russia and China.

The U.S. has backed away from pursuing a number of tough measures against Iran in order to win support from Russia and China for a new United Nations Security Council resolution on sanctions, according to people familiar with the matter.

Among provisions removed from the original draft resolution the U.S. sent to key allies last month were sanctions aimed at choking off Tehran's access to international banking services and capital markets, and closing international airspace and waters to Iran's national air cargo and shipping lines, according to the people.

If we learned anything from the Bush administration it's that going to the UN and kow towing to Russia and China doesn't work. These sorts of sanctions were seeked and received throughout the Bush administration and we got nowhere.

Iran Thumbs Its Nose at the World

A few days back the IAEA approved a strongly worded censure of Iran over its nuclear program. The Politico had a story that called this censure a "vindication", at least according to the White House.

The resolution was hailed by the White House and won praise from the Israeli government, which has previously expressed skepticism that much can be gained from trying to engage Iran.

"Today's overwhelming vote at the IAEA's Board of Governors demonstrates the resolve and unity of the international community with regard to Iran's nuclear program," White House spokesman Robert Gibbs said in a statement. "Indeed, the fact that 25 countries from all parts of the world cast their votes in favor shows the urgent need for Iran to address the growing international deficit of confidence in its intentions."

Not two days later, the same Politico, along with most media, is reporting that Iran is thumbing its nose at the censure by no longer working with the same IAEA.

Iran will no longer voluntarily cooperate with the International Atomic Energy Agency after its vote last week to rebuke the nation, the Tehran Times is reporting.

As Laura noted, the IAEA vote was a big win for Obama in that China and Russia, the two powers that have been most resistant to taking a harder line, both signed on to the resolution.

Thus, we continue this diplomatic dance that has played out in front of the world and it's a dance that Iran has manipulated perfectly to their benefit. So far the world community is patting itself on the back over a strongly worded letter that was rebuked publicly by Iran two days later. That's sum total of the diplomatic accomplishments of the Obama administration.



Listening to politicians from all parties and from all countries, none have a clue what to do. Everyone must understand that if nothing happens Israel will bomb Iran's nuclear sites. Even Israel itself wants to avoid this outcome. In fact, even Iran's chief defenders, China and Russia, have no clue.



No one wants Israel to bomb Iran, not even China and Russia. The price of oil would go to some unheard of level if that happened. That's not what China wants. That's what Russia wants but they also want a situation they can manage. A nuclear strike would very likely create a regional if not an all out war. Plenty of terrorist groups near Russia would take advantage of said situation.



Yet, both insist on stopping any significant sanctions giving Iran carte blanche to create a nuclear weapon. Meanwhile, the U.S. and our allies are acting like high school kids with a major research paper due. They'd all rather procrastinate with a series of meaningless diplomatic gestures and actions rather than making the difficult decisions necessary to actually stop Iran from getting a nuclear weapon diplomatically.



If you ever listen to any politician from either side of the aisle talk about what we should do to stop Iran from getting the bomb all you get is a series of platitudes designed to make a nice sounding sound bite not to have any meaningful practical plan. It will be things like working with our allies, getting Russia on board, and show strength. No politicians really have a clue.



There's only a limited number of options short of war. We can encourage all our allies to pull their ambassadors. All internal investment funds can make it clear to all companies that do business in Iran: they'll divest if the business continues. Most meaningful sanctions are unlikely because of Russia and Iran. Finally, we can engage in a Naval blockade, an act of war. That's it.

Yet, every politician from both sides offers nothing but platitudes. Platitudes won't get it done. Soon, we'll have to have real solutions and so far no one has shown they have any.

Obama's Friday Night Doc Drop

This was announced by the Obama administration last evening.

President Barack Obama on Friday slapped punitive tariffs on all car and light truck tires entering the United States from China in a decision that could anger the strategically important Asian powerhouse but placate union supporters important to his health care push at home.

Obama had until Sept. 17 -- next week -- to accept, reject or modify a U.S. International Trade Commission ruling that a rising tide of Chinese tires into the U.S. hurts American producers. A powerful union, United Steelworkers, blames the increase for the loss of thousands of American jobs.

I immediately had two thoughts. First, I thought about history. In the early 1930's, we had an act called Smoot/Hawley. This was a sweeping bill that provided tariffs and other protectionist policies on all sorts of goods and services. Smoot/Hawley sparked a trade way and it contributed greatly toward turning a recession into a depression.

President Obama's tariffs are much more limited. They are limited strictly to tires. Still, the Chinese are not happy. Trade wars don't have to start with a sweeping piece of legislation. You can expect protectionist retaliation from China. Our companies, in some industry, will see the price of their goods get whacked with tariffs on their product from China. From there, who knows what can happen.

During periods of economic contraction, and frankly always, the last thing you want to do is stunt trade. All companies need access to all markets now more than ever. Now, Chinese tire companies don't have as much access to our markets. That makes the price of tires more expensive. China will now protect those companies with a retaliatory tariff and our companies will have less access to China. That will stunt growth all over the world and create upward inflationary pressure.

This move makes no economic sense. It's strictly political. Unions control the tire makers and they've been complaining that cheap tires from China are causing them jobs. This is yet another nod to the unions from the Obama administration.

More than that, we count on China to finance our massive deficits and debts. Is ticking off our biggest creditor really the wisest geopolitical move? China is already weary of buying up our bonds. Now, the Obama administration has just given them another reason not to buy our bonds. At the same time, Secretary Geithner is assuring the Chinese that our debt is safe, we are telling them our markets are not welcome to them. How exactly does that work?

The Russia Card?

In the hoopla over health care reform, this geopolitical story went largely unnoticed.

Israeli President Shimon Peres said Wednesday that the Kremlin has promised to reconsider the planned delivery of powerful air defense missiles to Iran.

Russian President Dmitry Medvedev made the pledge during their talks Tuesday in the Black Sea resort of Sochi, Peres said.

"President Medvedev gave a promise he will reconsider the sales of S-300s because it affects the delicate balance which exists in the Middle East," Peres told reporters via video link from Sochi.

The most important unreported business and geopolitical story of the year was this one.

On Jan. 18, just hours after a cease-fire began in the Gaza Strip, Israel announced the discovery of a major natural gas field off its northern Mediterranean coast.

The news sent the Tel Aviv stock market sharply higher on Sunday as the size of the find appeared to eclipse the negative impact of the recession the country is now facing. Shares of the Israeli partners in the Tamar-1 drilling site jumped between 42% and 124%, though profit-taking pulled some down on Jan. 19. Even the Israeli shekel joined in, climbing by up to 1.6% against the dollar on Monday before settling the day up a half-point.

The discovery of this natural gas pipeline immediately made Israel a player in the natural gas market. It's an open secret that Russian President Vladimir Putin wants to create a pseudo OPEC cartel in natural gas.

Last week, Russian President Vladimir Putin sent chills through Western Europe when he discussed the possibility of forming a gas-producers' association with countries like Libya and Iran. "A gas OPEC is an interesting idea. We will think about it," he said. "We are not going to set up a cartel. But it would be correct to co-ordinate our activities with an eye to the solution of the main goal of unconditionally and securely supplying the main consumers of energy resources."

Uh-oh!

Here is a government that already uses its control of vital energy supplies as a weapon against its neighbors proposing to join forces with a charter member of the Axis of Evil—the better to intimidate rival nations all over the world.

Everyone is well aware that Iran is moving quickly towards developin nuclear weapons and has threatened to destroy Israel. What hasn't been reported as much is a series of high level meetings between Israeli officials and Russian officials. The latest of which I just cited.

It continues to be more and more clear that Israel has no confidence that the U.S. will do anything to stop Iran from getting nuclear weapons. The Israelis can attack Iran before that happens but they would clearly like to find a better way to resolve this.

That's where Russia enters this geopolitical chess match. Iran's nuclear weapons development depends in very large part on Russia's support. That's because most of the equipment and weaponry comes from Russia. With the discovery of the natural gas pipeline in Israel, Israel becomes a major player in the natural gas market. They would be a very natural part, pardon the pun, of a natural gas cartel headed by Russia. Russia has no interest in Iran attaining nuclear weapons per se. They would gladly cut Iran off if it meant securing Israel's place in their cartel. This latest meeting appears to have been a step toward Russia cutting Iran off and thus cutting off their nuclear weapons program.

Israel cannot have Iran get a nuclear weapon. They have no confidence that the Obama administration will help them in this cause. As such, that country is now reaching out to other geo political players to ally themselves. Russia has much more influence on Iran than the U.S. anyway. So, it appears the geo political balance of power is changing with little scrutiny. Israel is moving away from their alliance with the U.S. and moving toward an alliance with Russia.

Russia increases its influence in the world, and with Israel in their back pocket, they are one step closer toward creating a natural gas cartel. Meanwhile, in its quest to reach out to Iran, the U.S. is pushing away its long term ally Israel. Israel also has plenty of business dealings with China, another country with influence over Iran. Of course, if Israel were to ally itself with China and Russia, that would end any hope that the U.S. could influence Israel into a peace agreement with the Palestinians. It would also create a formidable alliance that would challenge the U.S. both militarily and economically. It appears that it is unfolding with little notice.

What's Popularity Worth

The president continues to enjoy outstanding popularity, or at least, that's what nearly every pundit says when they write a story about him. He's apparently just not popular enough to win his time slot.

The one-hour ABC News special "Primetime: Questions for the President: Prescription for America" (4.7 million viewers, 1.1 preliminary adults 18-49 rating) had the fewest viewers in the 10 p.m. hour (against NBC's "The Philanthropist" debut and a repeat of "CSI: NY" on CBS). The special tied some 8 p.m. comedy repeats as the lowest-rated program on a major broadcast network.

Given we're in the summer time re run season, it's all the more stunning just how poorly the president's health care townhall debate did. Maybe, the pollsters can poll the popularity of The Philanthropist. If the president polls at 60%, I can only imagine how well the Philanthropist would poll.

Apparently, the president is overwhelmingly popular, just not so popular that anyone could stand watching him talk about health care for an hour. Tomorrow, the House has scheduled a vote on cap and trade. Reports say that if it passes it will be by a razor thin margin. Health care is stalled. His financial reform overhaul is already met with skepticism, and the Senate voted overwhelmingly not to fund Let's think about that for a second. The president is supposed to be overwhelmingly popular. He has a massive majority in both chambers. Yet, he can't seem to get any of his agenda passed.

Overseas, the president is even more popular. Yet, that doesn't seem to have had any effect on policy. He got nothing more than token support in Afghanistan. He had to go to the previously unknown island of Palau to be able to rid himself of the Uighers housed at GITMO. Germany and France are concerned by our out of control deficits. Meanwhile, Russia and China have all but stopped buying our bonds.

At some point, popularity has to turn into real political capital. Either that or popularity goes away. Tomorrow's vote on cap and trade will be a crucial step. If the president loses that vote, it won't be long before he loses his popularity as well.

Obama's Brilliant Coup

Yesterday, President Obama showed everyone just how formidable a politician he is. Inside his camp, the most threatening rival appeared to be John Huntsman, Governor of Utah. Huntsman had developed a reputation for not only moderation but effective governance. He enjoyed high approval and an excellent reputation. He was starting to become a serious threat in 2012. How did Obama deal with that threat? He appointed him envoy to China.

With a reach across the political divide for Utah Gov. Jon Huntsman as ambassador to China, President Barack Obama may have sidelined for now a potentially formidable Republican moderate and possible White House challenger in 2012.

Yet Huntsman, who has upset the GOP's conservative base by supporting gay civil unions, may gain, too. The appointment, which requires Senate approval, gives him a chance to burnish his credentials and position himself as a viable presidential contender in 201state6, if Obama appears to be a strong candidate for a second term in 2012.

The beauty of this move is that it also makes perfect sense for Huntsman. As a Governor, the biggest deficiency he would face in any potential Presidential run would be his lack of foreign policy experience. By being appointed ambassador to China, he instantaneously removes that negative. While Huntsman is now no longer a candidate to run in 2012, he strengthens his candidacy in 2016 and beyond.

He also creates all sorts of other bonafides. He strengthens his moderate image. This will strengthen his appeal to both moderates and even liberals. While moderation is usually a negative in the primaries, his image is already that of a moderate. By doing this, he carves that space out all to himself. If he is to survive the primaries, this move will be a huge coup in the general election. In the end, both men win and ultimately it's a huge coup for Obama.

The Symbiotic Relationship Between the Chinese and the U.S. Treasury Bond

I bet that just about everyone reading this has also read and heard elsewhere that the Chinese are America's biggest debtor. Often following such a pronouncement is often a misguided and naive rant that is long on political rhetoric and very short on sophisticated financial knowledge. The reality is that Chinese being America's biggest creditor creates a symbiotic relationship that means that the Chinese become partners with the U.S. In fact, in many ways, the Chinese are put in just as precarious position, if not more, as the U.S. as a result.

The best estimate put us into debt to the Chinese to roughly one trillion Dollars. The U.S. Treasury bond is mechanism by which the Chinese become our creditors. That's of course because that's how the U.S. government borrows money. The U.S. Treasuries are traded like any other security on the open market. While I don't have their books in front of me, I would assume that for the most part their investment is in the 10 year U.S. Treasury. That's because the 10 year is the most popular and actively traded of the Treasury Bonds.

By holding on to so much U.S. Treasuries, the Chinese have in effect made themselves more dependent on the U.S. Treasury Bond itself than our government is on the Chinese. That's because the U.S. Treasury Bond is both a tool of income and of investment. As the interest rate goes up, the worth of the bond goes down. As such, the Chinese have a significant vested interest, about a trillion Dollars worth, in doing everything they can to make sure that the rate on the Treasury bond stays as low as possible.

As such, here is what the Chinese leader, Wen Jiabao, said today.

Speaking ahead of a meeting of finance ministers and bankers this weekend near London to lay the groundwork for next month’s Group of 20 summit meeting of the nations with the 20 largest economies, Mr. Wen said that he was “worried” about
China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely

.

He should be worried. That's because as the U.S. borrows more and more money, that puts upward pressure on the rate on the bond. The more the U.S. borrows, the more the Chinese will have to buy up these new bonds, if for no other reason, then to protect the investment they already have. By investing even more, the Chinese are married even more to the bond. They have already committed the first cardinal sin of investment, putting too much into one investment. Yet, their investment is so large that to the Chinese it's even worse. With each successive investment into the bond, the Chinese have even more riding on the investment. As such, they are that much more indebted to continue investing or face the real possibility of losing serious investment wealth.

Here's the dirty little secret that the Chinese are almost certainly well aware of. The U.S. Treasury Bond has a perfect 100% payback, but here's how they pay back each and every time. The U.S. Treasury issues even more bonds. It is in effect a house of cards. It's a house of cards that the Chinese have taken a significant position into. As such, if it were to crumble, with it, would about a trillion Dollars worth of Chinese investment as well. For this reason, the Chinese have just as much riding on the deal as the U.S. does. It is a symbiotic relationship.

Democrat's Foreign Policy Rhetoric and Geopolitical Reality

Throughout the campaign you are likely to hear this sort of rhetoric from the Democrats regarding our foreign policy.

Former Senate Democratic leader Tom Daschle says Barack Obama will restore America's credibility in the world if he's elected the next president of the United States.

Daschle, an adviser to the Obama campaign, says Obama "would return to the days of aggressive multilateralism."

Obama "has come to the realization that we would have to work in concert with our allies and friends," Daschle told reporters in Berlin on Wednesday.

Hillary Clinton sounds much the same.

Finally, a person that listens to the people, listens and works with people, and can get the country together and reunite us, restore our credibility, restore our military, and put us back in a fiscal policy worth the United States history.

These sorts of nebulous statements have always bothered me because while they are totally nonsensical, they are likely to sway those that have no foreign policy sophistication. The Dems would have us believe that we alienated our friends and allies and that they are the ones to restore our reputation and bring us back to the world community. The problem is that there really isn't necessarily any evidence of the former, and furthermore, their actions are counter to the latter.

Over the last few weeks, the Democrats have made several actions and statements that show that not only are these statements naive and disingenuous, but that they ignore geopolitical reality.

The first is their firm refusal not only to pass the free trade pact with Colombia but their indication that other free trade pacts with countries like South Korea and Panama will face the same fate. The Presidential candidates have also threatened to renegotiate NAFTA and CAFTA. Now, folks around the world aren't stupid. Everyone understands that the Democrats are playing to the wishes of their most important constituency...the unions. Free trade isn't merely an issue of economic but also of geopolitics. If the Democrats indicate to the rest of the world that the wishes of the unions trump the wishes of our allies, that is the opposite of restoring our credibility. The Democrats want to have it both ways. They want to bemoan our foreign policy position and claim that they will restor credibility. At the same time they are willing to play politics with that same credibility the first chance they get.

Second, both Democratic Presidential candidates have called for the President to boycott the opening ceremonies of the Olympic Games. I, myself, haven't really figured out if this is a good move or not, however this is a dicey geopolitical maneuver. If China is shunned for civil rights violations, then we must maintain a consistent civil rights position. If it is inconsistent, then we look as though China is singled out. If we single out China for civil rights violations and ignore others, that will only further weaken our credibility. That's why what Barack Obama recently said about Iran is so troubling.

Democratic presidential candidate Barack Obama on Tuesday called for a "diplomatic surge" including talks with US foe Iran, to help stabilize the situation in Iraq.

Barack Obama would have China be embarrassed in their shining moment at the same time that he would invite Iran into the world community. Both countries have serious civil rights problems. Yet, he wants to shun one during their moment, and he wants to invite the other to the negotiating table. How does this duplicitous dichotomy restore our credibility?

It doesn't. The reality is that the whole narrative that the Democrats have created about restoring our credibility is nothing more than empty rhetoric. It is nothing more than reaching out to some enemies and shunning most allies. This doesn't restore credibility. All it does is make us look opportunistic, weak, and duplicitous, and that, frankly, is how their empty rhetoric looks.

Dialogue for the Sake of Dialogue: The China Example

Gordon Chang penned this piece that attacks the notion that dialogue for the sake of dialogue is a good thing and uses China as an example. Chang makes several interesting points in the piece. The best one is this...

As an initial matter, China's central government moves slowly during crises, largely due to the fragmented nature of decision making in the Chinese capital. There are numerous civilian and military factions that must be consulted and won over before anyone can speak on behalf of the central government. In 2001, for instance, the fragile coalition that ruled China took days to decide what to say and do after a reckless Chinese fighter pilot clipped an unarmed Navy reconnaissance plane, which was forced to land on China's Hainan island.

Since then, Chinese officials have tried to clarify and streamline their decision-making process, but recent evidence shows that not much progress has been made. In November, China denied Hong Kong port-call privileges to the Kitty Hawk strike group on the day before Thanksgiving. On the day of the denial, Foreign Minister Yang Jiechi told President Bush that the turndown had been the result of a "misunderstanding." Yet a few hours later the Foreign Ministry in Beijing repudiated Yang's characterization of events.

The point Chang makes is that China's system is so chaotic and decentralized that dialogue is a difficult thing to figure out. It is never clear who exactly is the decision maker. The Kitty Hawk example is just one. Thus, if we are going to dialogue, who is it with. On the question of China, it ultimately depends on which issue we want to talk about.

There is a great irony in some of the criticism of Bush's foreign policy. On the issue of China, he has done exactly what his critics accuse him of not doing. He has reached out unconditionally and is looking for dialogue at all costs. Chang painstakingly analyzes how this policy has been an abject failure. The main reason is that we have created an open dialogue policy without having any understanding of the dynamics of their own internal decision making. As such, we have many times wound up dialoguing with folks that have no power on certain issues.

Another reason that the policy has failed is that the Chinese aren't impressed with a country that wants desperately to be its friend. Here is how Chang described it...

Yet there is an even more fundamental problem between China and the United States. In short, Washington and Beijing have fundamentally inconsistent objectives. Americans believe they have a role in Central and East Asia. The Chinese do not agree. To implement its grand strategy, Beijing is creating multilateral organizations, such as the Shanghai Cooperation Organization, from which the United States is excluded. Moreover, Beijing has worked hard to separate Washington from its two military allies in the region, Tokyo and Seoul. This is, despite all the happy talk that one hears in Washington, a zero-sum contest.

Americans have sought to integrate the Chinese into the international system, to make them "responsible stakeholders," to borrow the State Department's hopeful formulation. In order to do that, we have chosen to overlook a pattern of especially dangerous conduct in Asia. We issued a letter of regret, for instance, for the Hainan incident in 2001, even though the Chinese stripped the plane of sensitive equipment and imprisoned the crew of 24 for eleven days. We said nothing when the Chinese aggressively challenged the Bowditch, an unarmed Navy oceanographic vessel, in the Yellow Sea in September 2002. Nor did we publicly complain when, in October 2006, a Chinese submarine for the first time surfaced in the middle of an American strike group and within torpedo range of its flagship. This episode, which occurred in the Philippine Sea southeast of Okinawa, was an obvious warning to the U.S. Navy to stay away from Asian waters. And periodically in the last two decades, Chinese generals have publicly threatened to incinerate American cities.

Beijing, through a pattern of conduct, could not be clearer about its intentions. China intends to project force "way beyond the Taiwan Strait," as Hong Yuan, a military strategist at the Chinese Academy of Social Sciences, said last October. Therefore, it is time for Condoleezza Rice to stop complaining about China's lack of transparency and start commenting upon the nature of its ambitions.

In other words, China doesn't reciprocate a hand of friendship just because. China has its own agenda and just because we extend a hand of friendship doesn't mean they will give that hand back.

There are those now that believe unconditional dialogue with our enemies is the way to inject bold new foreign policies. Much like China our other enemies also have their own agenda and they are also totalitarian regimes that have power structures that we are unaware of. The abject failure of unconditional open dialogue with China should be a lesson in judging the ideas of unconditional dialogue with the rest of our enemies.

Chang makes his most provocative and intuitive point at the end...

We fundamentally misunderstand the Chinese. Unlike us, they are not impressed by displays of friendship. Like us, they respect strength. They are ruthlessly pragmatic. By adopting an overly tolerant approach, we are merely papering over problems, thereby ensuring that new incidents will occur and that differences will widen over time.

That is something to think about not only with China but the world at large...