EFTA00932995.pdf

From: Office of Terje Rod-Larsen Subject: April 7 update Date: Sun, 08 Apr 2012 17:04:38 +0000 7 April, 2012 Article 1. The Washington Post Mubarak loyalist to run for president Ernesto London° Article 2. The Daily Star Populism threatens to undo Egypt's Mubarak-era economic reforms Mohsin Khan Article 3. The New Yorker Our Men in Iran? Seymour M. Hersh Article 4. Foreign Policy The proxy war between Saudi Arabia and Iran grinds on Robert Haddick Article 5. Foreign Affairs The Future of U.S. - Chinese Relations Henry A. Kissinger Article 6. NYT The Big Bang Jonathan Freedland Article 7. The New Yorker A Haggadah for the Internet Age Sasha Weiss Anicic The' Washington Post Mubarak loyalist to run for EFTA00932995 Ernesto Londoflo April 6 -- CAIRO - Egypt's powerful spy chief under deposed President Hosni Mubarak roiled the country's presidential race Friday by announcing his candidacy and presenting himself as the best choice for restoring security and prosperity. Omar Suleiman's announcement was widely seen as a game changer in the landmark election scheduled for next month. The prospect of his return to power would have been laughable a year ago, when he vanished from public view after somberly announcing that the country's longtime autocratic ruler was stepping down. But much has changed since that afternoon of Feb. 11, 2011. Islamists have thrived in the country's newly open political system, alarming secular Egyptians and Western nations that would like to see non- Islamists leading Egypt. In addition, a large segment of Egyptian society has come to yearn for the safety and relative prosperity that prevailed until the popular uprising sent the economy into a tailspin and eroded the pillars of the country's police state. Suleiman's candidacy broadens a field of front-runners dominated by Islamists. Political analysts said his entry, coming just days after he publicly ruled out a presidential bid, suggests that the ruling military council opted to anoint him as a contender, possibly in response to the Muslim Brotherhood's decision to field a candidate and robust support for more hard-line Islamist candidates. It offers Egyptians their clearest choice yet between the old order and the new: a contender who is an old hand of the Mubarak-era security establishment facing off against Islamists who were banned from politics under the government he served. "It just became a more interesting race, because it has become increasingly clear the regime has not collapsed," said Khaled Fahmy, chairman of the history department at the American University in Cairo. "This represents the realization that the standoff with Islamists in parliament is very serious to them." Suleiman, a former army general, has remained largely invisible since the final days of Mubarak's rule, during which he served briefly as vice president. Unlike the ousted president and several of his senior loyalists, Suleiman has not been put on trial, and the ruling military council has EFTA00932996 shown no sign of wanting to hold him to account for any of the abuses of the old government. The former spy master was among Washington's closest backers in the Middle East in recent years, championing Egypt's unpopular alliance with neighboring Israel. The agency he ran played a key role in the rendition of U.S. terrorism suspects, a program in which suspects were secretly flown to countries around the world for interrogation after the Sept. 11, 2001, attacks, according to leaked diplomatic cables and news reports. Suleiman announced his decision to run for president in a statement published Friday afternoon on the Web site of the state-run newspaper al- Ahram. He attributed his change of heart to a mass show of support at a rally in the Abbasiya district of Cairo earlier in the day. "I was touched by your strong stance and your insistence on changing the status quo," Suleiman's statement said. He added that he was running in response to Egyptians' desire for "security, stability and prosperity." Shadi Hamid, an Egypt expert at the Brookings Doha Center, said Suleiman could emerge as a strong candidate if the military council, which continues to command widespread backing, manages to galvanize support for the former Mubarak loyalist among pro-military Egyptians and those wary of the prospect of a fundamentalist leader. "He'll have a chance of winning if SCAF puts its weight around the candidate," Hamid said, referring to the Supreme Council of the Armed Forces. "We'll have to wait and see how much coordination there is between Suleiman and SCAF." If his candidacy was, in fact, engineered by the country's military chiefs, the move could prove a risky gamble, opening up a once-shadowy figure to close scrutiny. "I'm excited because now all the atrocities he committed over the years will be under the spotlight for the next two months," said Hossam Bahgat, a prominent human rights activist. "He is the only member of Mubarak's close circle who has not only not been indicted, but is not even being questioned over anything." To get on the ballot for the May 24 vote, Suleiman, 75, must gather 30,000 signatures or secure an endorsement from 30 lawmakers by Sunday, the deadline to register. EFTA00932997 The announcement marked the latest surprise in a presidential race that a year ago had just three presumed front-runners: well-known former Egyptian diplomats Amr Moussa and Mohamed ElBaradei; and Abdel Moneim Aboul Fotouh, a moderate Islamist. ElBaradei dropped out, and two prominent Islamists — the Muslim Brotherhood's Khairat el-Shater and Hazem Abu Ismail, who enjoys the support of many in Egypt's conservative Salafist community — emerged as credible rivals. An opinion poll released this month by the al-Ahram Center for Political and Strategic Studies — which didn't list Shater or Suleiman — has Moussa, the former head of the Arab League, in the lead with the support of 31 percent of the 1,200 Egyptians polled. Ismail ranked second, with the backing of 10 percent. Ismail is fighting to stay in the race amid allegations that his late mother was a U.S. citizen, which under Egyptian law would bar him from the country's highest office. Thousands of Ismail's supporters thronged Tahrir Square after Friday prayers to demand that he be allowed to stay on the ballot. Many in the crowd said they saw Washington's hand in the attempt to disqualify him. "America is the number one player in what is happening in Egypt right now," said Mohammed Hamdi, 45, an accountant who supports Ismail. "America wants a president under its wings that abides by its orders." The Daily Star Populism threatens to undo Egypt's Mubarak-era omicrfrm Mohsin Khan April 07, 2012 -- The political aspirations of the Egyptian population have dominated the country's public life since the fall of President Hosni Mubarak just over one year ago. Unfortunately, as those aspirations are being addressed, the country's economy has entered into a steep decline, EFTA00932998 jeopardizing one of the revolution's main goals, namely an improvement in the living standards and welfare of Egyptians. Indeed, the populist rhetoric of Egyptian politicians threatens to undo the economic reforms that were undertaken by the Mubarak regime. In 2004, a major reform program was launched under the then prime minister, Ahmad Nazif. It was aimed at removing bureaucratic constraints to economic growth by restructuring the financial sector, streamlining business regulations, liberalizing foreign trade, and reducing the government's role in the economy. The 2004 reforms, with their elimination of restrictions on access to foreign exchange and reduction of import tariffs, gradually improved the business and investment climate in Egypt. Coupled with favorable international conditions, the country's annual GDP growth rate rose to 7.2 percent in 2008, from 4.1 percent in 2004, and remained at 5 percent in the period between 2009 and 2010, despite the global recession. The new measures also helped to attract large capital inflows and foreign direct investment. These dynamics helped underpin a dramatic rise in foreign- currency reserves, from $14.8 billion in 2004 to more than $36 billion by the end of 2010. In 2011, the situation worsened on virtually all fronts. Annual growth fell to about 0.5 percent, and inflation remained in the double digits. The unemployment rate reached 12.4 percent in the fourth quarter, up from 8.9 percent in the same period of 2010. The current-account balance deteriorated rapidly, owing to the loss of more than $4 billion in tourism revenues and a sharp fall in remittances by Egyptian workers abroad. The fiscal deficit widened to 10 percent of Gross Domestic Product, causing government debt (including external debt), which had been falling steadily, to rise to 76 percent of GDP. The most striking development, however, was the loss of international reserves in the year following the Tahrir Square revolution. The International Monetary Fund estimates that foreign-currency reserves fell by half, to $18 billion, by December 2011, owing partly to the worsening current-account balance, but, more importantly, to withdrawal from Egypt by foreign and domestic investors alike. In the face of large and growing external imbalances, the Central Bank of Egypt chose to defend the Egyptian pound during the period of political EFTA00932999 and economic turmoil last year. The Central Bank allowed the exchange rate, which is formally defined as a "managed float," to depreciate by only 3 percent. Keeping the currency relatively stable was considered a higher priority than preventing the loss of foreign reserves. Today, Egypt not only remains vulnerable to unstable domestic politics; owing to the depletion of its international reserves — at a rate of roughly $2 billion a month since last October — the country now also faces the threat of a currency crisis. Moreover, this decline in reserves almost certainly underestimates the extent of the losses, because it does not exclude inflows of $3.5 billion since November of last year from auctions of United States dollar-denominated Treasury bills. In addition, the Egyptian military has provided a $1 billion loan to the government, and another $1 billion was received through grants from Saudi Arabia and Qatar. This brought the loss of foreign currency reserves since December 2010 closer to $22 billion. The other source of international reserves, tourism, brought in only $8 billion last year, down sharply from the $12 billion that was earned in 2010. Egypt continues to import almost double what it exports, which had resulted in a trade deficit of over $10 billion by the end of 2011. As a result, Egypt's financing must continue to grow: The country now needs to borrow about $14-15 billion to plug its estimated financing gap of $24 billion. Much depends on when, or whether, external aid materializes, which is contingent on approval of Egypt's renegotiated $3.2 billion International Monetary Fund loan. Assuming this is finalized, the International Monetary Fund program could trigger further aid packages by the World Bank and other international donors. If the aid arrives, Egypt could begin to address some of its financing problems, but it is still in need of a long-term strategy to spur sustainable growth. Egypt's economy is facing continued risks, owing to capital flight, rising inflation, unemployment, and populist policies. Even with the availability of external finance, Egyptian leaders must look for ways to engage the private sector in reviving the country's economy. Unfortunately, the latest political incident involving the democracy- promoting activities of American non-governmental organizations has cooled bilateral relations and threatens the $1.3 billion in military EFTA00933000 assistance that Egypt receives annually from the United States. This may have an impact on other donors, as well as the international financial institutions, particularly the International Monetary Fund and the World Bank. Egypt's transition from populist economic policies to anti-American populism exemplifies the impact that political uncertainty can have on economic developments. The upcoming presidential election in May and the formation of a democratically elected government, one hopes, will calm the political turmoil and lead to economic stabilization and revival. Otherwise, Egyptians' hard-won political gains may well be lost. Mohsin Khan is a senior fellow at the Peterson Institutefor International Economics in Washington, D.C. THE DAILY STAR publishes this commentary in collaboration with Project Syndicate © (www.project- syndicate.org). Article 3. The New Yorker Our Men in Iran? Seymour M. Hersh April 6, 2012 -- From the air, the terrain of the Department of Energy's Nevada National Security Site, with its arid high plains and remote mountain peaks, has the look of northwest Iran. The site, some sixty-five miles northwest of Las Vegas, was once used for nuclear testing, and now includes a counterintelligence training facility and a private airport capable of handling Boeing 737 aircraft. It's a restricted area, and inhospitable—in certain sections, the curious are warned that the site's security personnel are authorized to use deadly force, if necessary, against intruders. It was here that the Joint Special Operations Command (JSOC) conducted training, beginning in 2005, for members of the Mujahideen-e-Khalq, a dissident Iranian opposition group known in the West as the M.E.K. The M.E.K. had its beginnings as a Marxist-Islamist student-led group and, in the nineteen-seventies, it was linked to the assassination of six American citizens. It was initially part of the broad-based revolution that led to the EFTA00933001 1979 overthrow of the Shah of Iran. But, within a few years, the group was waging a bloody internal war with the ruling clerics, and, in 1997, it was listed as a foreign terrorist organization by the State Department. In 2002, the M.E.K. earned some international credibility by publicly revealing—accurately—that Iran had begun enriching uranium at a secret underground location. Mohamed ElBaradei, who at the time was the director general of the International Atomic Energy Agency, the United Nations' nuclear monitoring agency, told me later that he had been informed that the information was supplied by the Mossad. The M.E.K.'s ties with Western intelligence deepened after the fall of the Iraqi regime in 2003, and JSOC began operating inside Iran in an effort to substantiate the Bush Administration's fears that Iran was building the bomb at one or more secret underground locations. Funds were covertly passed to a number of dissident organizations, for intelligence collection and, ultimately, for anti-regime terrorist activities. Directly, or indirectly, the M.E.K. ended up with resources like arms and intelligence. Some American-supported covert operations continue in Iran today, according to past and present intelligence officials and military consultants. Despite the growing ties, and a much-intensified lobbying effort organized by its advocates, M.E.K. has remained on the State Department's list of foreign terrorist organizations—which meant that secrecy was essential in the Nevada training. "We did train them here, and washed them through the Energy Department because the D.O.E. owns all this land in southern Nevada," a former senior American intelligence official told me. "We were deploying them over long distances in the desert and mountains, and building their capacity in communications— coordinating commo is a big deal." (A spokesman for J.S.O.C. said that "U.S. Special Operations Forces were neither aware of nor involved in the training of M.E.K. members.") The training ended sometime before President Obama took office, the former official said. In a separate interview, a retired four-star general, who has advised the Bush and Obama Administrations on national- security issues, said that he had been privately briefed in 2005 about the training of Iranians associated with the M.E.K. in Nevada by an American involved in the program. They got "the standard training," he said, "in commo, crypto [cryptography], small-unit tactics, and weaponry—that EFTA00933002 went on for six months," the retired general said. "They were kept in little pods." He also was told, he said, that the men doing the training were from JSOC, which, by 2005, had become a major instrument in the Bush Administration's global war on terror. "The JSOC trainers were not front- line guys who had been in the field, but second- and third-tier guys— trainers and the like—and they started going off the reservation. `If we're going to teach you tactics, let me show you some really sexy stuff..." It was the ad-hoc training that provoked the worried telephone calls to him, the former general said. "I told one of the guys who called me that they were all in over their heads, and all of them could end up trouble unless they got something in writing. The Iranians are very, very good at counterintelligence, and stuff like this is just too hard to contain." The site in Nevada was being utilized at the same time, he said, for advanced training of elite Iraqi combat units. (The retired general said he only knew of the one M.E.K.-affiliated group that went though the training course; the former senior intelligence official said that he was aware of training that went on through 2007.) Allan Gerson, a Washington attorney for the M.E.K., notes that the M.E.K. has publicly and repeatedly renounced terror. Gerson said he would not comment on the alleged training in Nevada. But such training, if true, he said, would be "especially incongruent with the State Department's decision to continue to maintain the M.E.K. on the terrorist list. How can the U.S. train those on State's foreign terrorist list, when others face criminal penalties for providing a nickel to the same organization?" Robert Baer, a retired C.I.A. agent who is fluent in Arabic and had worked under cover in Kurdistan and throughout the Middle East in his career, initially had told me in early 2004 of being recruited by a private American company—working, so he believed, on behalf of the Bush Administration—to return to Iraq. "They wanted me to help the M.E.K. collect intelligence on Iran's nuclear program," Baer recalled. "They thought I knew Farsi, which I did not. I said I'd get back to them, but never did." Baer, now living in California, recalled that it was made clear to him at the time that the operation was "a long-term thing—not just a one-shot deal." EFTA00933003 Massoud Khodabandeh, an I.T. expert now living in England who consults for the Iraqi government, was an official with the M.E.K. before defecting in 1996. In a telephone interview, he acknowledged that he is an avowed enemy of the M.E.K., and has advocated against the group. Khodabandeh said that he had been with the group since before the fall of the Shah and, as a computer expert, was deeply involved in intelligence activities as well as providing security for the M.E.K. leadership. For the past decade, he and his English wife have run a support program for other defectors. Khodabandeh told me that he had heard from more recent defectors about the training in Nevada. He was told that the communications training in Nevada involved more than teaching how to keep in contact during attacks—it also involved communication intercepts. The United States, he said, at one point found a way to penetrate some major Iranian communications systems. At the time, he said, the U.S. provided M.E.K. operatives with the ability to intercept telephone calls and text messages inside Iran—which M.E.K. operatives translated and shared with American signals intelligence experts. He does not know whether this activity is ongoing. Five Iranian nuclear scientists have been assassinated since 2007. M.E.K. spokesmen have denied any involvement in the killings, but early last month NBC News quoted two senior Obama Administration officials as confirming that the attacks were carried out by M.E.K. units that were financed and trained by Mossad, the Israeli secret service. NBC further quoted the Administration officials as denying any American involvement in the M.E.K. activities. The former senior intelligence official I spoke with seconded the NBC report that the Israelis were working with the M.E.K., adding that the operations benefitted from American intelligence. He said that the targets were not "Einsteins"; "The goal is to affect Iranian psychology and morale," he said, and to "demoralize the whole system— nuclear delivery vehicles, nuclear enrichment facilities, power plants." Attacks have also been carried out on pipelines. He added that the operations are "primarily being done by M.E.K. through liaison with the Israelis, but the United States is now providing the intelligence." An adviser to the special-operations community told me that the links between the United States and M.E.K. activities inside Iran had been EFTA00933004 long-standing. "Everything being done inside Iran now is being done with surrogates," he said. The sources I spoke to were unable to say whether the people trained in Nevada were now involved in operations in Iran or elsewhere. But they pointed to the general benefit of American support. "The M.E.K. was a total joke," the senior Pentagon consultant said, "and now it's a real network inside Iran. How did the M.E.K. get so much more efficient?" he asked rhetorically. "Part of it is the training in Nevada. Part of it is logistical support in Kurdistan, and part of it is inside Iran. M.E.K. now has a capacity for efficient operations that it never had before." In mid-January, a few days after an assassination by car bomb of an Iranian nuclear scientist in Tehran, Secretary of Defense Leon Panetta, at a town-hall meeting of soldiers at Fort Bliss, Texas, acknowledged that the U.S. government has "some ideas as to who might be involved, but we don't know exactly who was involved." He added, "But I can tell you one thing: the United States was not involved in that kind of effort. That's not what the United States does." Foreign Policy The proxy war between Saudi Arabia and Iran grinds on Robert Haddick April 6, 2012 -- The Turkish government hosted a conference last weekend in Istanbul to discuss possible international responses to Syria's budding civil war. The conference attendees, including the United States along with dozens of other countries and organizations, called themselves the "Friends of Syria" and declared open support for the rebels fighting the Syrian army. The Friends also announced substantial financial support for the rebellion, including $100 million -- pledged by Qatar, Saudi Arabia, and the United Arab Emirates (UAE) -- to pay salaries to the fighters, a direct inducement to government soldiers to defect to the EFTA00933005 rebellion. For its part, the U.S. government pledged an additional $12 million in humanitarian assistance to international organizations aiding the Syrian opposition. This assistance will include satellite communications equipment for rebel fighters and night vision goggles. Attending the conference, Secretary of State Hillary Clinton said discussions were occurring on "how best to expand this support." The broad and growing international support for the Syrian rebels is no doubt motivated by several concerns. On a humanitarian level, Bashar al- Assad's security forces are now suspected of killing more than 9,000 civilians over the past year. From this perspective, non-lethal assistance to the opposition seems the least the international community can do to help civilians cope with the widespread disorder inside the country. At a more practical level, leaders like Turkey's Prime Minister Recep Tayyip Erdogan, host of the Istanbul conference, undoubtedly fear population displacement and cross-border refugee flows as a result of the fighting. Assisting the rebels may help keep them and their supporting populations inside the country. Erdogan's support for the rebels may also be an acknowledgement that Assad's remaining time may be limited. If there is to be regime change in Damascus, Erdogan and other leaders will be in a better position to protect their interests if they already have a supportive relationship with Syria's future leaders. It is at the strategic level where the stakes in Syria are high and rising. The country has become a battleground in the proxy war between Saudi Arabia and its smaller Sunni-Arab neighbors against Iran. Smaller versions of the Saudi-Iran proxy war have played out in Bahrain, Lebanon, and Yemen. The clash in Syria raises the intensity and the stakes to a much higher level. Should the Assad regime fall and Syria's Sunni majority win control, Iran would suffer a crushing geo-strategic defeat. Not only would Tehran lose a loyal and well-located ally, Tehran's line of support to Hezbollah in southern Lebanon would be imperiled. The arrival of Sunni control in Syria might also boost the morale and material support of Iraq's anti- Iranian Sunni minority, a development Riyadh would no doubt welcome. The proxy war in Syria provides Qatar, Saudi Arabia, the United Arab Emirates, and their friends with a chance to develop and employ their emerging capabilities in covert action, subversion, and irregular warfare. EFTA00933006 Over the past three decades, the Quds Force -- the external covert action arm of Iran's Islamic Revolutionary Guards Corps (IRGC) -- has achieved remarkable success building up Hezbollah in southern Lebanon, Hamas in Gaza, and supporting anti-U.S. militias in Iraq and Afghanistan. Since the 1980s, Iran has demonstrated great skill at using covert action and deniable proxies to intimidate adversaries while simultaneously avoiding conventional military retaliation. If these techniques are warfare's latest weapons, Saudi Arabia and its allies likely desire to have them in their own armories. During last year's rebellion in Libya, tiny Qatar punched way above its weight when it sent hundreds of military advisors to assist the fighters who eventually overwhelmed Muammar al-Qaddafi's security forces. Saudi Arabia has called for arming Syria's rebels, an operation that would presumably entail many of the same tactics Qatar employed in its successful unconventional warfare campaign in Libya. If the Saudis are serious about fighting the proxy war in Syria, the kingdom and its allies will have to master the irregular warfare techniques that both the Quds Force and Qatari special forces have recently used. The emerging civil war in Syria harkens back to the Spanish civil war in the late 1930s. That ugly conflict drew in Europe's great powers and served as both as a proving ground for the weapons and tactics that would be used a few years later in World War II and as an ideological clash between fascism and socialism. For Saudi Arabia and Iran, the stakes in Syria are likely even higher than they were for Germany and the Soviet Union in Spain, which could add to the likelihood of escalation. It is Syria's rebels that need some more escalation from their outside friends. The Istanbul conference was one small success but the rebels will need more. Russian Foreign Minister Sergei Lavrov has argued that Syria's rebels will never defeat the army, even if they are eventually "armed to the teeth." Without more explicit external intervention, he is very likely correct. In Libya, the rebels benefited greatly from NATO's air power, which attacked massing Libyan security forces in their assembly areas, precluded their open movement against rebel locations, and provided close air support for the rebels during the final drive on Tripoli. The Syrian army faces none of these threats as it maneuvers against rebel concentrations. EFTA00933007 Syria's rebels should not look to the sky for the support Libya's rebels received. NATO will not intervene. U.S. support will very likely remain minor, discreet, and indirect. And as much as Qatar, Saudi Arabia, and the UAE may want to prevail in Syria, their air forces don't have the technical skills to do over Syria what NATO did over Libya. For now, cash is the weapon of choice in Syria rather than laser-guided bombs. Saudi Arabia hopes to buy the Syrian army rather than bomb it. For this war, the kingdom's oil-financed bank accounts may be more powerful than its squadrons of F-15 fighter-bombers. Until some event triggers military escalation, Riyadh and its friends will have to perfect the black arts of covert action and irregular warfare to fight the war in Syria. When they master these skills, they will be catching up to where the Quds Force has been for a long time. Syria may only be a preview of Saudi-Iranian clashes yet to come. Robert Haddick is managing editor of Sinai! Wars Journal. Ankle 5. Foreign Affairs The Future of U.S. - Chinese Relations Henry A. Kissinger March / April 2012 -- On January 19, 2011, U.S. President Barack Obama and Chinese President Hu Jintao issued a joint statement at the end of Hu's visit to Washington. It proclaimed their shared commitment to a "positive, cooperative, and comprehensive U.S.-China relationship." Each party reassured the other regarding his principal concern, announcing, "The United States reiterated that it welcomes a strong, prosperous, and successful China that plays a greater role in world affairs. China welcomes the United States as an Asia-Pacific nation that contributes to peace, stability and prosperity in the region." EFTA00933008 Since then, the two governments have set about implementing the stated objectives. Top American and Chinese officials have exchanged visits and institutionalized their exchanges on major strategic and economic issues. Military-to-military contacts have been restarted, opening an important channel of communication. And at the unofficial level, so-called track-two groups have explored possible evolutions of the U.S.-Chinese relationship. Yet as cooperation has increased, so has controversy. Significant groups in both countries claim that a contest for supremacy between China and the United States is inevitable and perhaps already under way. In this perspective, appeals for U.S.-Chinese cooperation appear outmoded and even naive. The mutual recriminations emerge from distinct yet parallel analyses in each country. Some American strategic thinkers argue that Chinese policy pursues two long-term objectives: displacing the United States as the preeminent power in the western Pacific and consolidating Asia into an exclusionary bloc deferring to Chinese economic and foreign policy interests. In this conception, even though China's absolute military capacities are not formally equal to those of the United States, Beijing possesses the ability to pose unacceptable risks in a conflict with Washington and is developing increasingly sophisticated means to negate traditional U.S. advantages. Its invulnerable second-strike nuclear capability will eventually be paired with an expanding range of anti-ship ballistic missiles and asymmetric capabilities in new domains such as cyberspace and space. China could secure a dominant naval position through a series of island chains on its periphery, some fear, and once such a screen exists, China's neighbors, dependent as they are on Chinese trade and uncertain of the United States' ability to react, might adjust their policies according to Chinese preferences. Eventually, this could lead to the creation of a Sinocentric Asian bloc dominating the western Pacific. The most recent U.S. defense strategy report reflects, at least implicitly, some of these apprehensions. No Chinese government officials have proclaimed such a strategy as China's actual policy. Indeed, they stress the opposite. However, enough material exists in China's quasi-official press and research institutes to EFTA00933009 lend some support to the theory that relations are heading for confrontation rather than cooperation. U.S. strategic concerns are magnified by ideological predispositions to battle with the entire nondemocratic world. Authoritarian regimes, some argue, are inherently brittle, impelled to rally domestic support by nationalist and expansionist rhetoric and practice. In these theories -- versions of which are embraced in segments of both the American left and the American right -- tension and conflict with China grow out of China's domestic structure. Universal peace will come, it is asserted, from the global triumph of democracy rather than from appeals for cooperation. The political scientist Aaron Friedberg writes, for example, that "a liberal democratic China will have little cause to fear its democratic counterparts, still less to use force against them." Therefore, "stripped of diplomatic niceties, the ultimate aim of the American strategy [should be] to hasten a revolution, albeit a peaceful one, that will sweep away China's one-party authoritarian state and leave a liberal democracy in its place." On the Chinese side, the confrontational interpretations follow an inverse logic. They see the United States as a wounded superpower determined to thwart the rise of any challenger, of which China is the most credible. No matter how intensely China pursues cooperation, some Chinese argue, Washington's fixed objective will be to hem in a growing China by military deployment and treaty commitments, thus preventing it from playing its historic role as the Middle Kingdom. In this perspective, any sustained cooperation with the United States is self-defeating, since it will only serve the overriding U.S. objective of neutralizing China. Systematic hostility is occasionally considered to inhere even in American cultural and technological influences, which are sometimes cast as a form of deliberate pressure designed to corrode China's domestic consensus and traditional values. The most assertive voices argue that China has been unduly passive in the face of hostile trends and that (for example, in the case of territorial issues in the South China Sea) China should confront those of its neighbors with which it has disputed claims and then, in the words of the strategic analyst LongTao, "reason, think ahead and strike first before things gradually run out of hand launch[ing] some tiny-scale battles that could deter provocateurs from going further." The Past Need Not Be Prologue EFTA00933010 Is there, then, a point in the quest for a cooperative U.S.-Chinese relationship and in policies designed to achieve it? To be sure, the rise of powers has historically often led to conflict with established countries. But conditions have changed. It is doubtful that the leaders who went so blithely into a world war in 1914 would have done so had they known what the world would be like at its end. Contemporary leaders can have no such illusions. A major war between developed nuclear countries must bring casualties and upheavals impossible to relate to calculable objectives Preemption is all but excluded, especially for a pluralistic democracy such as the United States. If challenged, the United States will do what it must to preserve its security. But it should not adopt confrontation as a strategy of choice. In China, the United States would encounter an adversary skilled over the centuries in using prolonged conflict as a strategy and whose doctrine emphasizes the psychological exhaustion of the opponent. In an actual conflict, both sides possess the capabilities and the ingenuity to inflict catastrophic damage on each other. By the time any such hypothetical conflagration drew to a close, all participants would be left exhausted and debilitated. They would then be obliged to face anew the very task that confronts them today: the construction of an international order in which both countries are significant components. The blueprints for containment drawn from Cold War strategies used by both sides against an expansionist Soviet Union do not apply to current conditions. The economy of the Soviet Union was weak (except for military production) and did not affect the global economy. Once China broke off ties and ejected Soviet advisers, few countries except those forcibly absorbed into the Soviet orbit had a major stake in their economic relationship with Moscow. Contemporary China, by contrast, is a dynamic factor in the world economy. It is a principal trading partner of all its neighbors and most of the Western industrial powers, including the United States. A prolonged confrontation between China and the United States would alter the world economy with unsettling consequences for all. Nor would China find that the strategy it pursued in its own conflict with the Soviet Union fits a confrontation with the United States. Only a few countries -- and no Asian ones -- would treat an American presence in Asia as "fingers" to be "chopped off" (in Deng Xiaoping's graphic phrase EFTA00933011 about Soviet forward positions). Even those Asian states that are not members of alliances with the United States seek the reassurance of an American political presence in the region and of American forces in nearby seas as the guarantor of the world to which they have become accustomed. Their approach was expressed by a senior Indonesian official to an American counterpart: "Don't leave us, but don't make us choose." China's recent military buildup is not in itself an exceptional phenomenon: the more unusual outcome would be if the world's second- largest economy and largest importer of natural resources did not translate its economic power into some increased military capacity. The issue is whether that buildup is open ended and to what purposes it is put. If the United States treats every advance in Chinese military capabilities as a hostile act, it will quickly find itself enmeshed in an endless series of disputes on behalf of esoteric aims. But China must be aware, from its own history, of the tenuous dividing line between defensive and offensive capabilities and of the consequences of an unrestrained arms race. China's leaders will have their own powerful reasons for rejecting domestic appeals for an adversarial approach -- as indeed they have publicly proclaimed. China's imperial expansion has historically been achieved by osmosis rather than conquest, or by the conversion to Chinese culture of conquerors who then added their own territories to the Chinese domain. Dominating Asia militarily would be a formidable undertaking. The Soviet Union, during the Cold War, bordered on a string of weak countries drained by war and occupation and dependent on American troop commitments for their defense. China today faces Russia in the north; Japan and South Korea, with American military alliances, to the east; Vietnam and India to the south; and Indonesia and Malaysia not far away. This is not a constellation conducive to conquest. It is more likely to raise fears of encirclement. Each of these countries has a long military tradition and would pose a formidable obstacle if its territory or its ability to conduct an independent policy were threatened. A militant Chinese foreign policy would enhance cooperation among all or at least some of these nations, evoking China's historic nightmare, as happened in the period 2009-10. Dealing With The New China EFTA00933012 Another reason for Chinese restraint in at least the medium term is the domestic adaptation the country faces. The gap in Chinese society between the largely developed coastal regions and the undeveloped western regions has made Hu's objective of a "harmonious society" both compelling and elusive. Cultural changes compound the challenge. The next decades will witness, for the first time, the full impact of one-child families on adult Chinese society. This is bound to modify cultural patterns in a society in which large families have traditionally taken care of the aged and the handicapped. When four grandparents compete for the attention of one child and invest him with the aspirations heretofore spread across many offspring, a new pattern of insistent achievement and vast, perhaps unfulfillable, expectations may arise. All these developments will further complicate the challenges of China's governmental transition starting in 2012, in which the presidency; the vice-presidency; the considerable majority of the positions in China's Politburo, State Council, and Central Military Commission; and thousands of other key national and provincial posts will be staffed with new appointees. The new leadership group will consist, for the most part, of members of the first Chinese generation in a century and a half to have lived all their lives in a country at peace. Its primary challenge will be finding a way to deal with a society revolutionized by changing economic conditions, unprecedented and rapidly expanding technologies of communication, a tenuous global economy, and the migration of hundreds of millions of people from China's countryside to its cities. The model of government that emerges will likely be a synthesis of modern ideas and traditional Chinese political and cultural concepts, and the quest for that synthesis will provide the ongoing drama of China's evolution. These social and political transformations are bound to be followed with interest and hope in the United States. Direct American intervention would be neither wise nor productive. The United States will, as it should, continue to make its views known on human rights issues and individual cases. And its day-to-day conduct will express its national preference for democratic principles. But a systematic project to transform China's institutions by diplomatic pressure and economic sanctions is likely to backfire and isolate the very liberals it is intended to assist. In China, it EFTA00933013 would be interpreted by a considerable majority through the lens of nationalism, recalling earlier eras of foreign intervention. What this situation calls for is not an abandonment of American values but a distinction between the realizable and the absolute. The U.S.- Chinese relationship should not be considered as a zero-sum game, nor can the emergence of a prosperous and powerful China be assumed in itself to be an American strategic defeat. A cooperative approach challenges preconceptions on both sides. The United States has few precedents in its national experience of relating to a country of comparable size, self-confidence, economic achievement, and international scope and yet with such a different culture and political system. Nor does history supply China with precedents for how to relate to a fellow great power with a permanent presence in Asia, a vision of universal ideals not geared toward Chinese conceptions, and alliances with several of China's neighbors. Prior to the United States, all countries establishing such a position did so as a prelude to an attempt to dominate China. The simplest approach to strategy is to insist on overwhelming potential adversaries with superior resources and materiel. But in the contemporary world, this is only rarely feasible. China and the United States will inevitably continue as enduring realities for each other. Neither can entrust its security to the other -- no great power does, for long -- and each will continue to pursue its own interests, sometimes at the relative expense of the other. But both have the responsibility to take into account the other's nightmares, and both would do well to recognize that their rhetoric, as much as their actual policies, can feed into the other's suspicions. China's greatest strategic fear is that an outside power or powers will establish military deployments around China's periphery capable of encroaching on China's territory or meddling in its domestic institutions. When China deemed that it faced such a threat in the past, it went to war rather than risk the outcome of what it saw as gathering trends -- in Korea in 1950, against India in 1962, along the northern border with the Soviet Union in 1969, and against Vietnam in 1979. The United States' fear, sometimes only indirectly expressed, is of being pushed out of Asia by an exclusionary bloc. The United States fought a EFTA00933014 world war against Germany and Japan to prevent such an outcome and exercised some of its most forceful Cold War diplomacy under administrations of both political parties to this end against the Soviet Union. In both enterprises, it is worth noting, substantial joint U.S.- Chinese efforts were directed against the perceived threat of hegemony. Other Asian countries will insist on their prerogatives to develop their capacities for their own national reasons, not as part of a contest between outside powers. They will not willingly consign themselves to a revived tributary order. Nor do they regard themselves as elements in an American containment policy or an American project to alter China's domestic institutions. They aspire to good relations with both China and the United States and will resist any pressure to choose between the two. Can the fear of hegemony and the nightmare of military encirclement be reconciled? Is it possible to find a space in which both sides can achieve their ultimate objectives without militarizing their strategies? For great nations with global capabilities and divergent, even partly conflicting aspirations, what is the margin between conflict and abdication? That China will have a major influence in the regions surrounding it is inherent in its geography, values, and history. The limits of that influence, however, will be shaped by circumstance and policy decisions. These will determine whether an inevitable quest for influence turns into a drive to negate or exclude other independent sources of power. For nearly two generations, American strategy relied on local regional defense by American ground forces -- largely to avoid the catastrophic consequences of a general nuclear war. In recent decades, congressional and public opinion have impelled an end to such commitments in Vietnam, Iraq, and Afghanistan Now, fiscal considerations further limit the range of such an approach. American strategy has been redirected from defending territory to threatening unacceptable punishment against potential aggressors. This requires forces capable of rapid intervention and global reach, but not bases ringing China's frontiers. What Washington must not do is combine a defense policy based on budgetary restraints with a diplomacy based on unlimited ideological aims. Just as Chinese influence in surrounding countries may spur fears of dominance, so efforts to pursue traditional American national interests can be perceived as a form of military encirclement. Both sides must EFTA00933015 understand the nuances by which apparently traditional and apparently reasonable courses can evoke the deepest worries of the other. They should seek together to define the sphere in which their peaceful competition is circumscribed. If that is managed wisely, both military confrontation and domination can be avoided; if not, escalating tension is inevitable. It is the task of diplomacy to discover this space, to expand it if possible, and to prevent the relationship from being overwhelmed by tactical and domestic imperatives. Community Or Conflict The current world order was built largely without Chinese participation, and hence China sometimes feels less bound than others by its rules. Where the order does not suit Chinese preferences, Beijing has set up alternative arrangements, such as in the separate currency channels being established with Brazil and Japan and other countries. If the pattern becomes routine and spreads into many spheres of activity, competing world orders could evolve. Absent common goals coupled with agreed rules of restraint, institutionalized rivalry is likely to escalate beyond the calculations and intentions of its advocates. In an era in which unprecedented offensive capabilities and intrusive technologies multiply, the penalt