Heartland - 1/2005 China America The Great Game

CHINA-AMERICA
THE GREAT GAME
1 •2005
contents no. 1/2005
2 Editorial
AN EMPIRE IN MAKING
5 Interview with Lieutenant General Liu Yazhou of the Air Force of the
People’s Liberation Army
33 Francesco SISCI - China is an Enigma
40 Zhang WENMU - Sino-American Relations and the Question of Taiwan
47 Yu XILAI - Made in the USA: The Future of International Justice and

the World Order
56 Wang SIRUI - Sino-Russian relations: Where do we go from here?
ANOTHER AMERICAN CENTURY?
68 Martino DOLFINI - Debt and Empire
88 Margherita PAOLINI – Crude Awakenings
97 Lucio CARACCIOLO - The Empire on Credit
108 John C. HULSMAN - A View from the Truman Balcony: The Second Term
of George W. Bush
115 David POLANSKY - Living Without Europe
120 Alexis DEBAT - Return to Reality: Iran seen from Washington
128 David DONADIO - Why We Back Israel
135 Charles D. FERGUSON - Dirty Bombs, Suitcase Nukes, and Cruise Missiles:
A Technological and Geographical Assessment
140 AUTHORS
CHINA-AMERICA THE GREAT GAME
EDITORIAL
Which Game?
I n a recent exposition on the emerging geopolitical situation around the globe,
Henry Kissinger remarked on the diplomatic significance of the difference between

America’s and China’s intellectual games: chess and go, respectively.
Chess has only two outcomes: draw and checkmate. The objective of the game is
absolute advantage—that is to say, its outcome is total victory or defeat—and the
battle is conducted head-on, in the center of the board. The aim of go is relative
advantage; the game is played all over the board, and the objective is to increase one’s
options and reduce those of the adversary. The goal is less victory than persistent
strategic progress.1
The September 11th attacks and the subsequent war on terror managed to
partially obscure the significance of the China-America relationship. Yet no single
game—not even the war on terror—has such vast geopolitical implications, even if it
remains unclear what exactly is being played.
Herewith two paradoxes that help define the distance between the two powers
and which may determine the nature of the game
The United States has a grand strategy, confidently encompassing the entire
globe, yet its nature is curiously abstract, and it does not always amount to a recipe for
action. More still, and ironically for a country that has always jealously guarded its
sovereignty, the US is increasingly placing the reigns of its power in foreign hands;
geopolitically, with its call for democratic revolution, and economically with its
reliance on depleting oil reserves and a weak dollar bought up primarily by the
Chinese and Japanese. China, meanwhile (to mix metaphors slightly), holds its cards
much closer, carefully husbanding its power and influence in Burma, central Asia and
the Spratlys islands.
Winston Churchill remarked of Russia that it was a riddle inside a mystery
wrapped in an enigma; the same may be said for China. Certainly many in the West
have long found China’s size and implacability ominous. Yet it is not only Westerners
who remain unsure of what China wants.
It is often forgotten that China, with the world’s largest population, growing
economy and vast territory and resources, has no experience as a global power. It was
1
Henry A. Kissinger, “America’s Assignment”, Newsweek, November 8, 2004.
2
CHINA-AMERICA THE GREAT GAME
not a factor in the Great Wars that reordered the world in the first half of the twentieth
century, Franklin Delano Roosevelt’s hope that it would fulfill its role as one of the
world’s Four Policeman, notwithstanding. Its recognition as a power independent of
Soviet control affected the greatest geopolitical revolution of the Cold War, yet even
then China’s greatest significance was a function of the bipolar struggle between the
US and Soviet superpowers. It has never before been a mainstay of the global
equilibrium.
Since Mao’s revolutionary spirit was implicitly repudiated under Deng
Xiaoping, China has lacked a grand strategy, which is to say a vision that unifies the
character of its internal system with its interests and goals in the world. With the
collapse of the Soviet model, and no clear parallels among its own past glories, whose
character was largely insular, many Chinese (such as the contributors to this issue)
have looked to the only remaining alternative—ironically their greatest potential
rival—the United States, to spur their imagination.
And so the Great Game begins. But which one?
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CHINA-AMERICA
THE GREAT GAME
AN EMPIRE IN MAKING
CHINA-AMERICA THE GREAT GAME INTERVIEW WITH LT. GEN. LIU YAZHOU
INTERVIEW WITH Lieutenant General Liu Yazhou

OF THE AIR FORCE OF THE PEOPLE’S LIBERATION ARMY
The war in Iraq unmistakably signaled America’s preeminence. Rumsfeld’s victories

within the bureaucracy and on the battlefield. Air power as the basis of American
hegemony. The meaning of strategy. What China can learn from America. Recognizing
the future of warfare.
T he Iraqi War, which caught the attention
of the whole world, was over. Dai Xu, a reporter in the editorial department with
Military Science in the Air Force conducted an interview with Lieutenant General Liu
Yazhou, Air Force Political Commissioner at the Chengdu Military District of China.
Part I. War Result: A Regional War that Rocked the World
REPORTER The Iraqi War formally broke out on March 20, 2003. By April 11, the U. S.
troops had seized Baghdad. The offenders, with little more than 100,000 soldiers,
completely conquered a medium-sized country within a score of days. There was
scarcely any combat worth mentioning; many people felt that the Iraqi War was more
like a game than a war.
LT. GEN. LIU Dramatic as the war seemed, it was real. The score of days in the spring of
2003 was thought-provoking. This war seemed to be over, but it was only another
starting point.
REPORTER What do you mean by “another starting point”?
LT. GEN. LIU Regional war though it was, the Iraqi War rocked the world. It changed the
structure of the world tremendously. It might even be said that the national boundaries
of many countries were unnoticeably redrawn by this war; redrawn at least in the
minds of the senior leaders of the United States. This war changed history, and
continues to do so. The world as it was before the Iraqi War will never return. When
Tony Blair said in the House of Commons that “this war will determine the
international political structure in coming decades”, he got the point.
Let me talk about my understanding on this war from two aspects: a political
perspective and a military one. Soon after China won its war of self-defense against
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India in 1962, Chairman Mao Tse-tung said that we had “fought a political war by
military means, or a military war by political means”. The Iraqi War, likewise, had a
dual connotation, both political and military. This war had three meanings from the
political perspective:
1. It served as the watershed between the new international order and old ones.
Prof. Jin Yinan pointed out that “War decides order.” The United States has been
pursuing some kind of “New Empire” since the end of the Cold War. This means that
the U.S. dominated the world with its political, military, cultural, and religious power.
When a nation grows strong enough, it practices hegemony. The sole purpose of power
is to pursue even greater power. The last cornerstone of the 20th century international
system had been the global collective security mechanism and international law as
represented by the United Nations, an arrangement mainly initiated and established by
the United States. The US crushed this cornerstone through the war. It was the first war
of the United States in “the New Empire Order” and had great historical significance.
This war marked the end of an old period and indicated the beginning of a new one.
2. Civilizational conflicts. Civilizational conflicts are religious conflicts in nature.

The confrontations between the Arab nations and Israel were only part of it. You might
deny the existence of civilizational conflicts, but could you deny the existence of
religious ones? George W. Bush once described the Iraqi War as a “Crusade”, a remark
which he later refereed to as a “slip of the tongue ”. How could it be “a slip of the
tongue”? After the end of the Cold War, another warfare under a new rule commenced,
which was civilizational in nature, featured by the conflicts between Western Christian
and Islamic civilizations. The United States not only wants to “reform” the Islamic
world, as it declared. Its ultimate goal is to rout the entire Islamic community. From
time immemorial, civilization has been transplanted by wars. The US confronted the
world by military means, and the significance of the Iraqi War can be found in the
words of US politicians. James Woolsey, a significant figure for US conservatives once
said, “The Iraqi War could be seen as the first war preceding the Fourth World War.
The world has witnessed two hot wars and a Cold War, of which Europe was at the
forefront. The Fourth World War is now taking place in the Middle East.”
REPORTER Because of the US’ disproportionate military strength, there is an approach to

war that resembles a mania among its hawkish politicians. The balance in international
politics is tipping rapidly. Some Western scholars have compared the United States to a
chariot hurtling down a hill.
LT. GEN. LIU The Iraqi War is now history, but people around the world began to sense
the chill of the new century in the spring of 2003. The Belgian Prime Minister Guy
Verhofstadt recently referred to the US as a “very dangerous superpower”. The world
became dangerous because of the US threat. That leads up to the third meaning I
wanted to discuss: geopolitics. Geography is destiny. That has been a constant truth
since ancient times. Generally when a powerful country begins to rise, it should first
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set itself in an invincible position. An invincible position in geography means a region

which should be kept under geopolitical control and today’s Middle East is such a
region. It has been said that oil was both treasure and curse for the Middle East, and
that all US strategies for the Middle East since World War II had been made in view of
oil. That speculation, however, was only half right. Oil was a reason for the US to
control the Middle East, but it was not all it desired. The Middle East was not only an
energy base in history, but also a well-known transportation hub for the world.
Napoleon was aware of the importance of controlling this key transportation hub.
When the United States controlled the Middle East, different world forces would then
begin a new round of integration, which would result in enormous changes in world
history. The US severed the land between the three continent of Asia, Africa and
Europe.
REPORTER What about the influence in the military field?
LT. GEN. LIU There were two big military blocs in the world in the last century: the
former Soviet Union and the United States. They developed two kinds of military
philosophies, which were completely different from each other. Armed forces all
around the world could be divided into two categories according to these two military
philosophies. All the (hot) wars since the end of the Cold War were actually wars
between these two military blocs and were wars over different kind of military
philosophies between the two blocs. Now I can say that the U.S.-led military bloc
defeated the one headed by the (former) Soviet Union.
The meaning of the Iraqi War to the world was that it demonstrated completely
the crisis of the Soviet military approach. Beholding the ruins left over by the Iraqi
War, visions flooded my mind: the Bekaa Valley in Lebanon, the Libyan capital,
former Yugoslavia, Afghanistan…I found that there were astonishing similarities
between these battlefields and war ruins—that they had all been allies of the former
Soviet Union or places in which the Soviet Union had put its foot; that they all mainly
employed the Soviet weapon system and had Soviet military ideas; that they had been
either fragmented or disbanded after the US air-strikes. What were the reasons?
The two wars in the Gulf highlighted a shocking fact: Iraq was a country whose
army, navy and air forces were all armed with Soviet weapons, and possessed Scud
missiles, MIG warplanes and tanks—all Soviet-made. These armaments were both
enormous in quantity and advanced in technology and had been introduced into Iraq
systematically. In addition to all the armaments, its operational system and guiding
philosophy had also been transplanted from the Soviet Union.
REPORTER In order to achieve the aim of conquering and occupying a middle-sized

country, the US employed about 500,000 troops for three years in the Korean War,
only to be forced to retreat without a victory; while in Vietnam, the U. S. used another
500,000 troops and fought for about 12 years, only to be forced to retreat likewise in
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the end. How come the Iraqi War turned out as it did?
LT. GEN. LIU I want to answer this question by referring to the outcomes of two other
wars. Both the Soviet Union and the United States were superpowers, and when they
fought wars with the same opponent, the results were totally different. The Soviet
Union successively employed 1,500,000 troops in its war on Afghanistan, fighting
mainly ground battles with that country for a decade, only to be defeated in the end,
resulting in more than 50,000 casualties on the Soviet side. What was more, the power
of the Soviet Union never recovered. While in the case of the recent war in
Afghanistan, the US only employed a special force of 1000 some-odd
troops—accompanied mainly by its air forces—and dismantled the Taliban forces in
just 61 days, with only 16 deaths among the US troops (of whom none were killed in
action).
REPORTER What do you think were the main gaps between the Russian and the US
Armed Forces?
LT. GEN. LIU The gaps lay mainly in two factors: their military technology and their war
philosophies. Let me talk about military technology first. Science and technology were
developing at a tremendous pace and precision-guided technology took the war into a
“precision warrior” era. The US could deploy its most threatening weapons to where it
thought to be the most needful places in the shortest possible time. The US dropped
more bombs within a single day during the Kosovo War than all the missiles we
Chinese have deployed along the Southeast coast of our mainland. During the war in
Afghanistan, the US quickly developed a new kind of “thermobaric bomb” for use in
that country’s mountainous regions that were filled with all sorts of caves.
Thermobaric bomb could destroy caves, underground bunkers and everything in a
building—without doing damage to the building itself. It was something like a neutron
bomb. Developing and manufacturing new types of armaments quickly according to
different battlefield circumstances was a weapon in and of itself. In addition to that, it
could develop and provide new armaments promptly according to the needs on the
battlefields, which was of great importance. In comparison, we used the bangalore
torpedoes, explosive packages and walkie-talkies during the Korean War, and still used
them during the self-defense war against Vietnam.
“Industrial foundation” certainly was a reason for our disadvantage, but what
mattered most was whether we had a future-oriented philosophy for war and whether
our national defense industry was capable of coping with contingency or not. We could
not begin to think about these questions when a war was about to break out
immediately. We should begin thinking of them from this moment on. The expense for
each minute’s delay today will be more bloodshed in the future.
As there was a gap of nearly one century in their relevant developments, what
we saw between the U. S. and the Taliban in the War in Afghanistan was not one
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between soldiers. Nor was it one between cannon-shots. It was a war between missiles
and bulletins, satellites and rifle posts.
In comparison with the US, Russian technology was only manifested in its
weaponry, and it was not systemized. When Russia was fighting the Chechnya War,
they were basically fighting with conventional weapons, and information interflow
was never in place between its operational platforms or between its operational
platforms and command systems. Technology levels determine war tactics. There was
no “generation gap” between Russian and Chechen forces, so it was impossible for
them to fight a asymmetric war against their opponents, or make the best use of an
absolute technological advantage as the United States did.
Mobility is the only way out when faced with an overwhelming air force and
firepower disadvantages. Only when a force has mobility can it avoid being attacked
all the time without attacking its enemy. And only when a force has mobility in a war
can the war continue in a way that both sides launch their attacks. Lack of mobility led
to defeat for the Iraqis and the Taliban forces in the two Gulf Wars and the War in
Afghanistan, respectively. The fundamental objective for the US to develop different
systems was to deprive its enemies of battlefield mobility. Its enemies should pay
special attention to this as without mobility there is no survival.
REPORTER How did the US control their enemies’ mobility?
LT. GEN. LIU The US approach was to capture all kinds of information, while blinding
and deafening its enemies. When we say that the US Armed Forces were mighty, it
was because they had apt battlefield sensibility. Let’s take a look at the following data.
In battle, a period of time was needed to complete the so-called attack chain, from
discovering a target to conducting a precise attack on that particular target. And that
process would have included the following steps: discovering, locating, targeting,
attacking and operation evaluation. In the first Gulf War, the operation of such a
“chain” took 100 minutes, while in the wars in Kosovo and Afghanistan, it took 40 and
20 minutes respectively. In the Iraqi War, it took just 10 minutes, thus nearly realizing
the goal of “discovering means destroying”. In such circumstances, its enemy would
not have enough time to be mobilized. For instance, in November 2001, a US scout
discovered that a motorcade was retreating from the Afghanistan capital of Kabul. The
scout immediately transmitted the message to the US Central Command through
satellites. After the Pentagon gave the attack order, three fighters quickly flew to the
motorcade and fired three missiles from overhead. At the same time, an unmanned
aerial vehicle also fired missiles—making it the first unmanned fighter in the world. It
was later found out that nearly 100 Taliban followers were killed in this air strike,
including Atef Mohammed, aide of Osama Bin Laden. This air strike was an epitome
of US operations in the war in Afghanistan, and in time would become the usual
approach for their tactical attacks.
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In the Iraqi War, the Iraqis were first deafened and blinded. That being the case,
they simply could not bring their forces into play, leaving aside the fact that those
forces were not strong to begin with. When commenting on the 1991 Gulf War in his
book, Surpassing the Nuclear War, В.И. Sripcinko, the Russian military strategist,
wrote, “Iraq had made preparation very earnestly—but for an outdated war.” A dozen
years ago, Iraq still had tank divisions, air service and a Saddam Defense Line. And
only rifles and human bombs were left available on the eve of the Iraqi War.
Generally speaking, the Iraqi War was one with a gigantic “Gap of
Generations”. If we say that the wars in which the United States participated since the
1980’s were constantly changing, moving from Mechanized Wars to Information Wars,
then the Iraqi war was a qualitative change in that direction. It was a symbol that the
US military revolution, which had commenced after the end of the war in Vietnam,
was almost completed. This was a significant event in world military history. In that
sense, the failure of the Iraqis was inevitable, though the US victory was exaggerated
due to Iraq’s nonresistance or failure to resist. Faced with such a desperate situation,
the Iraqi government could not fight even if it wanted to. As for the Iraqi people, they
simply did not want to fight the war. That being the case, while the government was
killed, its nation survived.
Due to the poor performance of the Iraqi forces, the real war capacity of the US
force was not fully manifested in the Iraqi War. The strongest points of the US army
included their capacity in electronic warfare, in New Concept Weaponry System and
Sky Forces, and only a small fraction of those capacities were mobilized. The US was
listed 1st in the following three realms in today’s world. First, it was the forerunner in
the new military revolution. If we compared the revolution with a long-distance race,
the United States would not only take it for granted that it be the one leading all other
players, but it would remain 1000 meters ahead of its immediate pursuers—and, if it
felt that the distance between it and the second runner might shorten to 900 meters, it
would feel threatened. Second, its defense expenditure was the highest in the world—
the amount equaling that of the following 12 countries. Thirdly, its military power is
incomparable in the world. What was more upsetting was that the US Armed Forces
were still expanding rapidly. A new war system covering the whole globe would come
into being once its global missile defense system are ready. The last resort by which its
enemy might threaten the U. S.—nuclear weapons—would by then be useless. By that
time, a unipolar political system backed by an absolute military power—a global
empire system with the United States at the core—would then be in place. Just as the
mechanized blitz expedited the “Third Reich ” of Adolf Hitler, the information war is
now laying the foundation of the world’s new empire. The long-term outcome of this
war is terrifying. And though that particular day had not arrived yet, we are fast
approaching it.
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Part II. Air Power, or Ground Force?
REPORTER Lt. Gen. Liu, Could you talk about the features of this war? What kind of
war did you think the Iraqi War was?
LT. GEN. LIU In a word, it was an air war. I believe that air power was the decisive force
for the Iraqi War, though the US sent massive ground forces as well. The US had
global interests, and hence broad war areas. It had to adopt a global strategy. That
made it essential for its armed forces to fight long-distance wars, to be able to be
deployed promptly, strike precisely and maintain absolute mastery of the sky. Among
all parts of the US armed forces, only its air power could match those requirements.
After the war in Grenada, it was determined that it was better to have a battalion of
troops ready in 24 hours than to have an army in 3 months. Air power has played a
decisive role in all America’s recent wars: the first Gulf War, the Kosovo War, the war
in Afghanistan and the Iraqi War.
REPORTER Why did the United States, then, send ground troops to Iraq from the very
beginning?
LT. GEN. LIU First, whether and how to use ground forces in a war depends on ones goals.
The goals of the US in this War were to “topple Saddam’s regime” and to “liberate the
Iraqi people”. Such extreme war goals meant that the US would have to send its
ground troops soon after the war began. Without the use of ground forces, it was
impossible to “topple Saddam” or to “liberate the Iraqi People”. The US was then
sending an unequivocal signal by sending its ground forces to Iraq: that the US would
continue to stay and would not move out soon.
REPORTER That is to say the United States’ decision to sent its ground forces to Iraq was
a political one rather then a military one.
LT. GEN. LIU That’s right. In order to achieve that goal, the US army began its show
immediately after the start of the war. You must have noticed that the United States
invited lots of journalists from all over the world, including those from China, to report
on the war with the coalition army. Why? To put on a show for the world. When the
United States fought the Iraqi War, it was trying to punish Iraq as a warning to others.
What was more, it had a plan for the reformation of a Greater Middle East—all would
need a ground force in place.
The show put on by the United States really had some effect. A number of
countries, especially Arab ones, were terrified—part of the political effect of using
ground forces. Those who thought that the United States was again stressing the role of
ground forces did not see the meaning of that approach, they only saw the superficial
phenomena. Military means were always one way to achieve political goals. That
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could be seen both from the military objectives and, sometimes, from the course of a
military undertaking.
REPORTER Was there any military reason that the US used its ground forces?
LT. GEN. LIU US air power had long been the major player from the Gulf War to the
Kosovo War to the war in Afghanistan; a debate must have taken place between the
different divisions of the US Armed Forces. The core of the debate could have been be
that the navy and army did not want to play a supportive role only, they did not want to
be marginalized. The army in particular had that sense of crisis.
We knew that there was a debate after the war came to an end, as one might
have expected. The debate did not take place within the Armed Forces but between
Colin Powell, the Secretary of State, and Donald Rumsfeld, the Secretary of Defense.
It is interesting to note that the debate was not between armed services, but rather,
between civilian officials and senior officers in the army. They had common objects,
varying only in the means of operation. Rumsfeld proposed a novel war concept of
“precision blitz”, called Rumsfeld’s Theory. “Precision” referred to the high
intellectualization of a war. And the soul of Rumsfeld’s Theory was that the army
should be reformed into combat groups that were smaller in size but easier to deploy.
Its effectiveness would resemble that of the Special Forces. Concerted with air strikes,
its tasks were to help precision-guided weapons attack important targets, so that
combat requirements were completed quickly. On the other side, the essence of
Powell’s Theory was that massive ground forces should be employed, and they should
act according to the operations carried out by the Heavy Divisions of the army.
As the war started, what we saw was a compromise of the two theories: both
Rumsfeld’s and Powell’s theories were applied—but quite insufficiently. Many of the
senior army officers believed that the ground force used this time should have reached
the scale of the 1991 Gulf War, which was 10 army division, but the US only
employed 2 divisions. The scale of the ground troops used this time was much smaller
than those used in the “Desert Storm”, while they achieved a much greater victory. I
believed that the difference between the Powell Theory on war and the Rumsfeld one
lay in the following: while the former emphasized destroying the effectiveness of an
enemy on a large scale, the latter no longer stressed the importance of destroying the
troops and arsenals of the enemy, but rather, shifted the focus to destroying its fighting
will. The results proved the rightness of the latter.
REPORTER How should we view the fruits of the US army’s “exercise”, as you put it?
LT. GEN. LIU First of all, this exercise was undertaken at a point when the U. S. had an
absolute advantage. The US army was advancing fairly quickly. The 3rd Mechanized
Division left Nasiriyah and Najaf, where fierce fighting was under way, and conducted
a long-range raid hundreds of kilometers away (in Baghdad), and set a new in-depth
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raiding record in war history. The advancing speed of the US troops equaled or
bettered that of the German army when it blitzed the Soviet Union.
But the US troops’ advancement would have been unimaginable without

support from its advantageous air power. In that sense, I would say that the Iraqi War
was not a short war, at least from the viewpoint of air conflicts. From that view, the
war did not last four weeks, but the past twelve years. The war that started on March
20, 2003 was merely a continuation of a war that had lasted for the preceding 12 years.
For the past 12 years, the United States had been occupying the Iraqi air space, and
strangling the Iraq’s air power. When I mentioned earlier that “the soul of the Iraqi
troops have been stolen” what I referred to was the absence of its air power.
Secondly, 12 years of No-Fly zones, bombing and reconnaissance had ravaged the
spirit of the entire country and its troops. The will of the Iraqi people was already on
the brink of dying. Like a cabin tottering in rains and winds, Iraq would collapse at the
lightest push. It was against such a backdrop that the United States conducted the
“exercise”.
At the same time, the 3rd Mechanized Infantry Division, which was the main
force of US troops, never fought any substantial battles—and its high speed
advancement was made possible when the US had absolute mastery of the sky and the
air forces had completely swept away all obstacles. Did you notice that the US ground
troops would always stop once they encountered any resistance efforts or it would
simply leave? The army did not seize any city in the war. Well, yes. Baghdad was
taken. But was it seized by the ground troops? It was reported that the US had greased
the palms of the senior officers of the Republican Guard so that they would give up
their resistance. Some Westerners said that the air power of the coalition contributed
99 percent to this war, while the ground troops of the coalition contributed only 1
percent. There was some overstatement in that comment, but it told the truth.
REPORTER Different armed services carry out basic battle functions in different
dimensions and fields. Generally speaking, air power is mainly an offensive one or a
destructive power. It would be difficult for air power to shoulder the responsibilities of
defense, occupation and protection.
LT. GEN. LIU Let me make an analogy. Air power was both arms of a person; you can use
it to wreck other peoples’ windows or door planks. But if you want to occupy their
houses and protect the property from further seizure, you’ll have to use your
feet—ground forces—to enter the house. So it would be meaningless to compare the
role of the ground forces and air forces without looking at the objectives of the war
and the nature and characteristics of both forces. In general, the army and navy were
more restricted by the natural mode of operational spaces, while air power would be
able to fight in all spaces and all fields. The navy could only fight on the seas and the
army only on land, while air power could fight everywhere.
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The U.S. had to resort to the use of ground forces for those particular objectives
of the war. However, as a result, the US had abandoned its own strong points and
lowered itself to a level where the Iraqis could possibly confront it. The results of the
war proved Rumsfeld’s Theory to be right. Never in US history had there been any
president-appointed civil officials who exerted such a profound influence on the war
plans of the US military. What happened later on told us in a more unequivocal way
that the biggest winner of the Iraqi War was Rumsfeld and those under him. The
biggest loser was the US army. On April 26, 2003, Rumsfeld went to the Gulf to
inspect the troops there. When Rumsfeld arrived, warm applause and cheers
greeted him. Rumsfeld’s victory was not just over the US army, but also over Russian
military theory. Facts proved that a more flexible military, though smaller in size,
would absolutely defeat a huge army bugged by outdated concepts. The Iraqi army
was a huge army. And according to the theory on large-scale front line operation of the
Soviet Union, Iraq had amassed large quantities of armored units and artillery units,
with their commander offices highly concentrated. But the line of defense of such a
fearsome army was routed by a few U. S. troops in a matter of days. Military observers
in Russia exclaimed, “The military paradigm has been rewritten. Other countries had
better notice that the US has rewritten the military textbook.”
REPORTER Could you be more specific in describing the characteristics of the

performance by US air power in this war?
LT. GEN. LIU I wrote in my A Century for the Air Force that, before the 1980’s, the world
named it the “air force” because it was an army in the air. After that, however, it could
no longer simply be seen as one of the armed services, though its designation remained
the same. Revolutionary changes in weaponry had brought a revolutionary change to
the strategy and tactics of air force. And the air force shifted its role from merely
supporting the army and navy operations to one that received supports from the other
two armed services in its operation till it could independently carry out war tasks today.
The air force has always undergone qualitative changes. In the 1999 Kosovo
War, we saw that the air force was used not only militarily, but also played as a
diplomatic ace card. The air strikes not only targeted the enemy’s military targets, but
also its national strategic targets. The use of air power was strategic in nature. The way
that the US employed its air power in the Iraqi War was exactly the same as it did in
previous wars: air power was used as a initiative and full-time strategic force for the
war. What was different was that its role was more direct, more prominent and more
evident. The US fought 5 wars in the past 10 years: the Gulf War, NATO’s air strikes
on Bosnia and Herzegovina, air attacks on Iraq, the Kosovo War and the War in
Afghanistan. And the Iraqi War today was its sixth one.
The U. S. had fought each and every one of the six wars by exactly the same
pattern: it first launched a global campaign for the war, coercing the target nation with
its naval and air power. It would then besiege them in all directions, till it could win
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the war with little or no fighting at all. A global sky-oriented besiegement was now the
basic characteristic for the US when preparing for modern wars. If one wanted to
predict whether the US planned to launch the war, and how big a war it wished to fight,
one could simply review the deployment of its air power.
REPORTER What do you think was the guiding thought behind the US air strikes?
LT. GEN. LIU Paralyzation, and paralyzation only. War of Paralyzation has been a
consistent operation for the US for the past two decades. A review of the century of
history since the birth of the air force would find that the strategy of the air forces of
world powers has hovered between striking military targets and civilian ones, between
strategic bombing and air support. During World War II, the US and Britain stressed
strategic bombing, while Germany and the Soviet Union emphasized battlefield
assistance, and both scored enormous successes. Before the war in Vietnam, air forces
in general would usually undertake indirect air strikes as it was judged that victory was
determined by the outcome of ground battles. However, paralyzation mainstreamed
after the war in Vietnam, and especially after the Gulf War.
Moving on from the military field, US diplomatic policy was a paralyzing one,
especially when it was applied to China. What was the bottom line of US diplomatic
policy on China? Did it really mean to dismember China? I am afraid not. Were they
afraid that China should rise? I am afraid not completely. I believe that it just wanted
to paralyze China. It was the political use of the military operation: so that China
would neither prosper not collapse, so that China would never develop soundly. The
US did not want China to collapse completely. The reason was that once China
collapsed, Japan, India and Russia would all then rise to break the balance of the Asian
Continent, forcing the US to fill the vacuum of power. The United States would not let
China collapse. Once China collapsed completely, Japan would then rise.
When observing how the US military fights its wars, we should consider a
consistent philosophy, rather than just look at each war separately. While military
technology grew more and more advanced, US strategy tends to become more and
more simple. Victory as soon as possible is its doctrine. And it would resort to extreme
measures so long as political circumstance allows. Towards the end of World War II,
the United States could defeat Japan by various means—but why did they use atomic
bombs? The US could well debark on Japan, without taking care of troop casualties.
US ground forces could have won the war, but that was not the best way. Giulio
Douhet thought that once an army gained mastery of the sky, it must use it to destroy
the material and spiritual resistance of the enemy. If ill-used, mastery of sky on the one
side would mean that both sides shared mastery of the sky. What then, does controlling
the sky mean?
The most basic characteristics of the United States military was that it stressed
the use of its air power since the naissance of airplanes a hundred ago—since World
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War I, to be exact. If one wishes to understand the outlook of the Iraqi War, one must
first review US war history over the past hundred years. The US military has made the
most direct interpretation of the status and role of air power in the past century. Since
World War II, it began to mainly use its air power in different wars. The US
participated in all large-scale wars in the world during the past century, and it never
suffered more casualties than its enemies. What’s more, its casualties in wars have
been decreasing, until zero casualty was recorded. The reason is that the US has
followed the trends of the military revolution closely, and was very careful in keeping
up the pace. History would tell us that what one country did within the military
revolution would have a tremendous influence on the rise and fall of that nation.
REPORTER Ronald Reagan’s “Star War” Initiative, Bill Clinton’s and George W. Bush’s
NMD and TMD plans, all belong to the category of air force strategy. These strategy
have already been elevated from “the sky” to “the space”. You said that someday
space will become a battlefield. But before that, the battlefields in the sky will remain
dominant.
LT. GEN. LIU If you look at what the United States have done in the past, you’ll see what
it will do in the future. It will not leave the sky alone as long as it remains. As the
United States occupy a commanding place, every important event taking place in the
world is consolidating its status. It was not that the United States would not resort to
its ground forces. North Korea and Vietnam were the two places where the US had
deployed the most ground troops. What were the results, after all? Nothing but
wretched defeats. From then on, using its ground forces became taboo. Why should
they be afraid of using the army? It is not that US troops are fearful of death, it is that
they fear defeat. This was determined by the natural flaw of the army and the mentality
of the US. We have three criteria to weigh fighting strength: attacking distance,
advancement speed and destroying power. But obviously, compared with air power,
the army lags behind in those three aspects; it is usually large in scale and inflexible in
action. And it is easy to be caught in the trap of a lasting war with its enemy.
REPORTER Your belief that the outcome of the Iraqi War had been decided in the sky
was unique. How would you describe it?
LT. GEN. LIU Giulio Douhet said that future wars would begin from the sky. The party
that first used air power would of course manage a quick and decisive outcome on the
battlefield. Those who are not prepared for future wars will find out that it is simply
too late for them to get ready once the war breaks out—they will not even be able to
see the trends of the war development. And because of the important change on the
nature of the war, it would not take long to determine the winner.
Giulio Douhet also concluded that air force could achieve victory before all other
armed services. Because air force could, at lightning speed, launch a lethal strike on
the enemy’s heartland…the party which acquired an air advantage first would have a
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decisive advantage over the war. A country that lose its mastery of the sky would then
suffer enormous damage. So, “Mastery of the sky means victory. Countries that fail to
acquire the mastery of the sky are doomed to be defeated and to accept every condition
that the winner cares to impose.”
REPORTER Do you think that the army—broadly speaking, the ground forces—will exit
from the arena of history, just as Major Sripocinko, Academician in the Russian
Military Science Institute, had said?
LT. GEN. LIU The revolution has already taken place. Many nations have successively
discarded the traditional doctrine of “winning by quantity”. They all took measures to
trim down their troops—to an appropriate degree. The US armed forces were trimmed
from over 2 millions troops to over 1 million, while the French armed forces were
trimmed from 560,000 to 400,000. Statistics from the National Strategy Institute in
London showed that in 1985 the total number of world troops was nearly 30 million,
and the figure declined to a little more than 20 million. And the US always led the
world.
There was a very heavy smoke screen in the Iraq War. It seemed as if
traditional army and ground battles had revived. But people who believed that were
fooled by the United States. I had two points which I would like to emphasize again.
First, though the Mechanized Infantry Division of the United States were very
advanced, without guarantee from the air power advantage, it would still proceed with
difficulty. If one says that the traditional army still has any function in the future, one
should never forget that it is guaranteed by a mastery of the sky. Secondly, the
Armored Division and the Infantry Division of the Iraqi troops were both defending
forces, which of them then had functioned as an army division? Offending and
defending cases combined together, it would be then the basic positioning for the
future traditional army.
The traditional army has a history of thousands of years. It is now approaching

its end today. Mankind has entered the information age. Troops today should of course
be different from the troops in the mechanized ages. It was a historical rule to discard
the old ways of life in favor of the new ones and to advance with the age. We did not
either continue to use the long-handled sword of Guan Yu, did we?
REPORTER Many people would declare the arrival of an “air force’s epoch” on seeing
the “zero casualty” record of the offenders in the Kosovo War. They would declare
that the “army has revived” and that “contact wars are still in fashion” when they again
saw that large-scale of ground troops were used in the Iraqi War. The United States
fought each war differently.
LT. GEN. LIU Such mistakes are simply inevitable if one sees only a part of a whole thing.
Nothing can stand in the way of the development trends in the military fields. We
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should see that in a historic perspective; we do not have to view a longer history, a
hundred year might have revealed the trends in the military fields. And that is, the
battlefield of wars are constantly elevating, and the distance between the warring sides
are growing farther and farther. In 1900, the Qing Dynasty troops still used
long-handled swords and long pikes in wars, killing or being killed within meters. But
the rifles of the Eight-Power Allied Forces widened that distance to further than 100
meters. Afterwards it was cannons, widening the distance to kilometers or dozens of
kilometers. Still later on, tanks and airplanes widened the distance to hundreds of
kilometers. Still further, it was missiles. Finally, now that all five aspects of the sky,
space, ground, marine, and electronic elements are combined together, and here came
the non-contact era. The next war might be an unmanned one.
In 2000, the United States launched a strategy for “global warning line, global arrival
and global power” in which its space operation aircraft would be able to enter space
and attack a target on the earth in less than an hour. By 2020, the United States air
forces would have four platforms: the B-2 platform, the F-22 platform, the joint attack
aircraft platform and the unmanned fighters platform, all of which are characterized by
the stealth feature. Many of the US principles for future war have in fact been carried
out in this Iraqi War. For instance, large scale usage of stealth strategic bombers and
unmanned aircrafts. The age of unmanned warfare is approaching. Guided missiles
and bombers would fall as if hailstones were falling from the sky. Even a fighter must
be a stealth plane, even if it is an unmanned one. The United States army ceased
fighting with their enemy face to face some four decades ago. It was well ahead of its
rivals. Technically speaking, we might not be able to catch up with the US for the time
being, but we should catch up with them in terms of its thoughts, at least we should not
be left too far behind.
REPORTER What kind of role does air power play on the level of US national strategy?
LT. GEN. LIU One can say air power has already become a sharp lance for the United
States to materialize its national ambition. The US could look down upon the rest of
the world proudly with the help of this “lance”. Two decades ago it was called the
“global police”; now it is called a “world empire”.
REPORTER Some Western historian said that in human history, there has never been an
empire which had such global control and interfering capability as the United States
does.
LT. GEN. LIU Two decades ago, the United States was still sometimes badly defeated by
weaker and smaller opponents. Two decades later, however, the US now does not have
any rival in the real sense to challenge it, and it becomes proud.
This was because the way that people fought wars had changed. As a result, the rules
of the game for international politics also changed. Just as the armored infantry
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ascertained the status of the Roman Empire, the British Navy ascertained the status of
the British Empire, the United States wants to ascertain its status as the only
superpower in the world with the help of its air force. The US air force has planed to
turn itself into an unrivaled air force which could be everywhere in the world at any
time, in the coming one to three decades.
Part III. Nature of the Iraqi War: Informatization
REPORTER You talked about the outcome and characteristics of the Iraqi War just now.
Would you talk about the nature of this war?
LT. GEN. LIU In a word, the nature of the war was informatization, of which President
Jiang took notice during the 1991 Gulf War. In the past dozen years, he often spoke
about the informatization issue—almost every time he received representatives from
the armed forces. President Jiang really was far-sighted on that point.
What were behind previous wars? Comprehensive national strength. What

about modern wars? Science and technology. All major scientific invention and
creation should first, and must be used in wars, perhaps by way of coercion. History
has time again proved that. Vice versa, if the science and technology of a country or a
nation hangs behind, it would be its armed forces who would feel that most deeply and
suffered the most. The weapons that the United States employed in the Iraqi War had
made use of top-level scientific inventions and knowledge. Those included Newton
Mechanics, Dynamics, Quantum Mechanics, Electrodynamics, Narrow and Broad
Theory of Relativity, Organism and Inorganic Chemistry, Computer Network. Such a
listing would extend to dozens of pages.
This is really a brand-new and epoch-making military revolution. It changed

from ground wars featuring large-scale assembling of ground forces, to wars which
depend on air control force powered by high-tech electronic systems, and which
complete strategic objectives by air operations.
REPORTER Does Informatization mean an unprecedented exaltation of digitalized

armaments?
LT. GEN. LIU I think there were 3 levels of informatization: the electronic weapon
platform; networking of operation systems; the change of strategic attacks to
psychological warfare.
Thomson once said that “Information was not just a weapon, it was also a new
technology that changed war culture and psychological tendencies. It could change
everything. The changes it brought about were stronger than any other, perhaps
stronger than the changes brought by tanks, submarines and even atomic bombs.”
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There was a common point in all the wars in which the United States
participated in the last two decades: no troops ever made any achievements in their
wars against the US. The main reason was, the confrontation and suppression between
systems of the two sides had made it impossible to fight a platform vs. platform war
against US troops. In the 1999 Kosovo War, the commander of the air force of the
Federal Republic of Yugoslavia piloted a MIG fighter, trying to fight a battle with
NATO fighters. But, the Yugoslavian radar was disturbed, and the correspondence to
and from the MIG fighter was interrupted. The commander could not see where his
enemy was. What was worse, he was strictly locked by his enemy. So the MIG fighter
was shot and crushed by a Netherlander fighter soon after it took off. Another five
MIG fighters were also downed 5 minutes after taking off. Even most anti-air missiles
would have less than 5 minutes of survival time.
REPORTER During the Iraqi War, people did not see any air battle between fighters, nor
any battles between tanks. When there was a sandstorm, the Iraqi Republican Guard
tried to make the best of it and sent out a thousand-odd tanks to conduct a
counter-attack against US troops. But as soon as they moved, they were discovered by
reconnaissance planes and satellites. As a result, they were suppressed and killed by
coalition attackers and armed helicopters. Their dream of fighting a decisive tank
battle in Kirks vanished in the overwhelming bombings.
LT. GEN. LIU Such a picture of the war inevitably points to the 3rd level of the information
war: psychological warfare. It should be said that psychological warfare was the most
striking feature of the Iraq War.
I have always thought that psychological warfare belong to the category of

information war. There has been psychological warfare as long as there was war. It
was one of the various forms of war, and a contest beyond physical spaces. Art of War
by Sun Tzu speculated that psychological assaults came first among all tactics, and
considered it the highest state in war if one side could conquer its enemy without
fighting a battle. The no-battle situation of Sun Tzu could be achieved only after
violent psychological confrontations.
The psychological warfare that the US carried out against Iraq had been
carefully planned. It unfolded according to the well-sketched sequence of
strategy-campaign-tactics, which were different from all previous wars that the US had
participated in. It marked that as an independent war form, psychological warfare had
made its debut on the stage of war.
REPORTER How can we comprehend psychological warfare on various levels?
LT. GEN. LIU Let’s take the Iraqi War as an example. Psychological warfare on the
strategic level referred to the efforts forcing the other party to accept one’s terms in the
diplomatic field. It involved a comprehensive use of a country’s strengths and would
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resort to political, economic and diplomatic means or military deterrence. For example,
the United States sent an ultimatum to the Iraqis through the United Nations at the
very start. It also announced that the only way to avoid war was for Saddam to be
exiled. At the same time, the US also began a large-scale military deployment in the
Gulf region. By the way, the fact that the United States acted willfully to start the Iraqi
War was in itself a form of psychological warfare against the whole world, which was
connected to the fundamental purpose behind the Iraq War. You would notice that the
world became more malleable after the Iraqi War, if you were careful enough in your
observation. Tension on the North Korea nuclear issue was not as rigid as before.
Some possibility for a pacific settlement of the Israeli and Pakistani conflicts also
emerged.
REPORTER In this war, it seemed that the Iraqi people did not support Saddam’s political
power at all.
LT. GEN. LIU Not at all. No roads were broken, no bridges were bombed, no mines were
buried. In some places, people even welcomed the arrival of US troops. Some of our
military experts had been expecting that there be a people’s war in Iraq. Pleasing as the
phrase “the people’s war” might have sounded, the premise of such a war should be
one in which the people were willing to sacrifice.
It was hard to say how many Iraqis would fight or die to defend Saddam. The
people’s war refers to morale; it was more a political concept (than anything else).
Only those who gain the favor of the people could wage a people’s war. Those who go
against their own people, would have to fight individually. The wars that Saddam
fought were individual wars. It was so in the Iraq-Iran War, the Iraqi War against
Kuwait, the Gulf War and the Iraq War.
The Opium War and the Iraq War told us, “All autarchies and corrupt
governments were the same in that they are experts in civil wars and lie to people in
wars with foreign forces. When the people were poorly informed, the morale of the
people and the troops could still exist. Once the people know the inside story, plus the
invasion of foreign troops, such governments are doomed to collapse.” In waging
psychological warfare, the United States allowed the Iraqi people to understand what
kind of person Saddam had been, and what kind of party the Baath Party had been.
Corrupt officials would surely arouse the complaints of its people. In that case, the
most important mission for a corrupt government was to suppress domestic resistance,
thus disabling them in their fight against foreign forces. A corrupt government never
won in a war with foreign forces, as history has shown. I had a saying which I hope
you’ll remember: if a government does not take care of its people, then its people
would not take care of the government.
REPORTER Did what you have been talking about just now fall into the category of
psychological warfare?
21
LT. GEN. LIU It belong to the highest state of psychological warfare. History has shown
us that psychological warfare supersedes all other forms. For thousands of years
mankind has been pursuing a war in which a country can win with little or no battles at
all. But it is in the information age that the possibility appears for the first time. That
was the biggest revelation that this war left to the world and to the future.
REPORTER The April 18, 2004 edition of the New York Times ran an article entitled
Saddam’s Chinese Advisors, in which it said that those experts still stubbornly held out
such an obsolete mentality as the people’s war. It went on to say that if there were such
military experts in the PLA, then the PLA should not be so threatening as people have
imagined.
LT. GEN. LIU That was only a point from the western political and military circle and
could not be taken as evidence of anything. Chairman Jiang Zemin of the Central
Military Commission of China demanded that we march with time and boldly take the
initiative. How could we do so if we have yet to catch up with time? We had many
constraints in our efforts for military modernization, among which conceptual ones
were the biggest restriction.
It was both our misfortune and fortune to historically coexist with the US
military. We are unfortunate because the US is so powerful, and we are fortunate
because of the very same reason: because we have a potential rival. Having a rival
means that we have an object of reference, and that we have an aim in our march
forward, which in turn will give us momentum.
There are only two kind of status in the world: the best and the worst. None
between are worth mentioning. And remember, if you want to quarrel, quarrel with
those who are superior to you. The US military is somewhat unfortunate compared to
us. I believe that the US air force has a major flaw: while its planes are becoming more
and more advanced in technology, its warring tactics are becoming more and more
rigid. Why did I say so? That is because, for a fairly long time, the US air force will
not have any rival in the real sense to help them find out how powerful their planes are,
not to say to raise competition on a tactical level. Therefore, the current development
of the US actually follows the tactics of “crossing a river by feeling the stones in it”.
Once I made a visit to Stanford University as a scholar, and I stayed there for
quite a long time. They did not talk about “mind emancipation” all day, yet they
always kept their minds open. It had been 130 years since the United States had a war
in 1865 on its mainland and it was a country free from foreign invasions. Yet everyday
military newspapers would focus on hot spots of all international conflicts. A glance at
those headlines would make one think that someone must be crossing its border to
invade it, or that it was on the brink of a war. On the other side, only the US has been
fighting wars continuously throughout the world, and its warring tactics have reach a
level of perfection. It boasted itself as “invincible in the world”. The US military is not
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only an army to the world, rather, it is a kind of symbol representing a value system. It
initiates, but it never pretends to be a teacher.
The reason that I said that it did not pretend to a teacher is that the US continues
to innovate. In recent years we had a well-known phrase in the military field, which
was “new military evolution of the world, new military revolution of the world”. In
our military textbooks, it was if such a new military evolution were taking place or had
taken place in the world. But as a matter of fact, there was no such movement. The US
military did not mention anything like that, though such kinds of reference were
available in the works of some western experts, which was actually exaggerated.
There has been no such movement, but that does not mean there was no such
revolution. There has really been military revolution. The US armed forces did not
emphasize the evolution, because it was transforming every day. The United States did
not need a reason to start a war, and did not need any rule in a war. There was a saying
which goes, “while young men know rules, older ones know exceptions.” We might
mimic that by saying that “while we know the rules, the US military knows
exceptions.” The most embarrassing game of all is one which its rules change when
you are in. It is that way in life, and so is it with war.
Why have those military commentators made wrong judgments? One of the
important reasons was that their ideas had grown out of their time. They live in today’s
world, but their thoughts remained in yesterday’s world, or that of the day before
yesterday. It was true that tradition did not necessarily represent outdated things, and
modern concepts were not necessarily advanced thoughts. But the world was changing
at such a great pace that once you failed to see it, you would be late in catching every
step it made. For instance, some of our experts might talk about “luring the enemy into
a trap” or “emptied city” tactics. But the US would simply not play that game. In a
world where high-tech was being updated every month or even every day, the side
with the upper hand was fully aware of the position of its enemy and themselves.
However, I wanted to point out that the basic ideas of our military commentators did
not belong to themselves alone, it was an offspring from the theory of that time.
Our gaps with the US lie mainly in our military quality and ideology. I worked
in the west and had studied the west. My general comment on the west was that it
lacked ideas, though it was always full of vigor. We could perhaps apply this saying to
the general situation of the PLA.
The second lesson we learned from the Iraq War was that we should emphasize
strategy by all means. The strategy I mentioned here refers to the strategy of the
development of the armed forces. Military strategy is another form of national strategy.
The development of military strategies in the world is becoming more and more
complicated nowadays, and the pace for that change is also picking up speed. In the
Cold War, US military strategy changed approximately every decade, while it has
23
changed every two to three years since the end of the Cold War.
At a time when our rival has been constantly changing, it would not do if we do
not seek change. It is my belief there is only a question of strategic transformation, and
none of tactical transformation—at least for the moment. And for the transformation,
capacity is not a question, determination is the only thing that matters. We’ll have to
prepare ourselves, when we are facing such aggressive US forces. We are all talking
about the US’ next possible target. Whoever it will be, what matters most is whether it
will attack China. Precaution averts peril. Opportunity is always saved for those who
are well prepared.
REPORTER What is the most important problem in the establishment of strategy?
LT. GEN. LIU Avoid mistakes. Strategic poverty is a major restriction on the development
of a country, and on the development of its armed forces. There is a slogan which says,
“we should develop our education however poor we are”. We could bear poverty in
every field but strategic poverty. After the Iraq war ended, Gao Jin said: “the
importance of warfare has waned, while the importance for strategy, waxed.” By that,
he has touched the essence of the issue with his sagacious wisdom. For more than a
decade, he has been trying very hard to transform the University of National Defense
from a campaign university to a strategy one. His thoughts and conduct were those of a
prophet.
The main strategic issue for our army is war preparation, but there is a kind of
phenomenon which is quite thought-provoking: We would either ponder the issue of
military philosophy, when we would go to extremely abstract notions; or we would
think about military conflicts, when we would go to extremely specific things. Gao Jin
pointed out that “We should not always hover in the sky of military philosophy and
not land on the ground; neither should we wallow in the lower layer of concrete war
methods and never think of something superior”. I have always remembered a
quotation from Mao Tse-tung: “in planning a battle, one should grasp the strategically
vital points, while in planning the action tactics, one should grasp the vital points of a
battle.”
Mao Tse-tung once asked, “where do the right ideas come from?” But I’ll ask
the question in reverse: “where does the wrong mentality come from?” Like right
thoughts, the wrong mentality of a person also came from practice. Sometimes, it was
falsehood that was leading the way, and the truth just followed. As a result, sometimes
it was different kinds of falsehood, rather than the truth, that was leading our way
forward.
Zhu Sujin also said, “A more painful fact hidden in the whole history of war
was as such: from the angle of the pure military art, most epoch-making military
thoughts and strategies were created by invaders, which was later digested and
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absorbed by the invaded ones, who in turn would defeat those invaders in the end.”
Caesar, Napoleon and Hitler, they were all masters of unjust wars and outstanding
inaugurators of military arts. And though they would be exterminated ultimately, a
price would have to be paid—be it flesh or blood—ten times greater than they had
paid to achieve that, among which nine tenth serve as the price paid for their military
arts. After that, we would inherit their military thoughts and arts, as if they live within
our bodies and our weapons.
The third revelation we got from the Iraq war was that the Chinese armed forces
should do nothing but to take their own road. The US was not afraid of the military
modernization of China, for China could hardly catch up with it. What the U. S. army
feared was the Maoization of the Chinese military. Maoization was also called
revolutionizing or politicization, but those were just part of it. The farther away the
Chinese armed forces were from Maoization, the greater chance that the US would win.
Mao Tse-tung was an unparalleled military genius in human history at fighting and
defeating stronger enemies.
REPORTER Do you think, then, our enemy will invade us in the future like it invaded
Iraq?
LT. GEN. LIU We should not make simple analogies between different wars like that. It
would be a manifestation of weak wisdom if one treats us Chinese as the Iraqis and
imagines the US as future invaders of China.
Let’s talk about the people’s war. It was an open system of military thoughts
and was not a stereotype. We could not apply the notion of the peoples’ war by simply
replacing some sayings with newer phrases of today, or simply replacing the rifles the
peoples have with portable missiles, as if in this way, traditional warfare would turn to
a people’s war under high-tech conditions. But they were two totally different
concepts. For example, one of the premises for the traditional people’s war is luring
the enemy into a trap. Can it be applied now? The traditional people’s war emphasized
the notion of winning time by space, so that the enemy could be trapped into the vast
ocean of the people. I dare to say that in the future, our enemies will not send any
troops to our soil. Instead, they will fire numerous bombs, missiles to our capital,
reservoirs, and nuclear power stations, etc.
What’s more, even if you want to fight the war that way, and want to lure the
enemy in, will they come? War is a matter of two sides. Dennis C. Blair, former
Commander in Chief of the US Pacific Command, once said, “We respect the
authority of the People's Liberation Army in their mainland. Yet we must make them
understand that the ocean and sky is ours.”
The kernel of military thoughts in all nations and ages was their operational
thoughts, whose core contents was also called General Battling Tactics. Information
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battle is the most fashionable military term today. It is firstly a battle thoughts before it
is any battle method. The U. S. troops always emphasizes to fight dissymmetric wars.
In fact, the guiding thoughts of the people’ war is exactly fighting dissymmetric battles,
and we alone are the old ancestors of dissymmetric war.
The more solid and credible our strategy deterrence becomes to the United
States, the more careful it would be in considering forceful intervention.
We need to study how the people’s war could be fought in current situations. If
we still take the people’s war which focused on defending our land as a fundamental
strategic guide, it would mean that our enemy would achieve their purposes without
even firing a shot—as that way they would have strictly suppressed China to her own
soil.
I have been studying the United States and found that it had a great strategy. It
would always try to create a situation in which its enemy would feel that its land was
threatened. When that worked, the enemy would deliver all its manpower and material
resources to the land, ceding the sea way or a sky thoroughfare to the US. The US
would by no means get to its enemy by way of land: it would land from the sky. You
see, basically we do not have any problems on our land, while our ocean territory has
been invaded severely. We can not limit our war concepts on the ground any longer.
The frontiers of our national interests are expanding. Our military strategy should
embody characteristics of the time.
REPORTER From the live comments on Iraq war to analysis and debates after the war,
we found that quite a few people in our army hold that ground battles remain the
foundation of future wars.
LT. GEN. LIU We should use the experience of the US armed forces for reference. The
biggest lesson that the US learned from the Korean War and the Vietnam War was that
ground campaign by large-scale mechanized corps had too many disadvantages. After
those two wars, the United States began to reflect in agony and transformed itself
thoroughly, from inside theory to outside practice. It no longer mobilized large
quantities of ground troops to proceed with large-scale battles. Instead, it would first
think of using its air power and the special forces, which concentrated in intelligence
collection and target designation, played a leading role on the ground. Its main
strategic targets were all realized through air attacks. Entangled ground battles and
mechanical warfare were forbidden.
The military development tides in the world shows that future wars will tend to
be more human (only from the military meaning, of course.) High-tech not only
changes the war manners, it also changes war ethics. In precision-war times, massive
killings resulting from non-guided weapons will no longer exist. We will not only
emphasize small casualties or even zero casualty from our party, we will also try to kill
26
as few enemies as possible—after all, killing itself is not the purpose of a war. In that
sense, it is worth studying when the United States greases senior Iraqi officers or uses
its air power to “behead” or frighten them. Whereas using the army in both cases or
storming heavily fortified positions, which resorted mainly to manpower confronts
rather than technical and intellectual confronts, would do nothing good but take more
lives, which is against the rule of military development and the nature of wars.
I don’t believe that cruelty should be the essence of war. Rather, its essence
should be a contest in intelligence and technology. The more advanced technology
becomes and the more civilized society become, the more human wars will become.
Why would the Chinese hate the Japanese so much at the mere mentioning of the latter?
And why is it always so difficult for both countries and nations to truly trust each other?
It is because too many Chinese were killed by the Japanese then. It will forever be a
shame to China, and a stain for the Japanese.
But if you take a look at the wars that the United States participated in, you
would find that the peoples in those countries did not have deep hatred for US after the
wars concluded—only those overthrown governments might have that hatred. The
ancient Chinese also expressed similar ideas: so long as the purpose of a war is
achieved, one should not try to kill any more people. We would do better not to kill
anyone. And if we have to, we should kill as few as possible. We should try to lower
our deaths in fighting a war, which was the most important thing. It is true that we
should not be afraid of sacrifice; but if we don’t have to sacrifice, that’s still better.
Certainly it is somewhat too ideal, and yet it is a notion that we must have in mind.
Once it was impossible to fight a war without employing a great deal of manpower, as
technology then was at a low level. Modern technology, however, has made it possible
(that we use smaller manpower in wars). We should understand that the fundamental
value in technology development and its application in the military field is that it could
help lower the cost for victory.
REPORTER It seems that the US pays much attention to cost.
LT. GEN. LIU Everyone should pay attention to that. The United States has set a good
example for us, and it is the only nation in the world which earns money by fighting
wars. The US began to make money from wars after the end of the Vietnam War. It
treated war as some kind of business and would not fight for sheer politics or ideology.
It not only makes money, but also tries to reduce its cost as much as possible,
particularly in lives. Therefore, we’ll be able to predict how it fights wars: it is certain
that it will fight a war with the most economic and simple means, so that war
dividends could be maximized. Victory is not the only objective and standard. What
the US pursues is a victory at the minimal price. It not only asks other countries to
share the war expenses before the war and captures the resources of the defeated
countries in the war, it also sells weapons in large scales afterwards.
27
In a word, it has entered into a “benign circulate “ of wars. The more it fights
wars, the richer it becomes, and vice versa, the richer it becomes, the more it’ll fight.
Certainly, it is very dangerous—as dangerous as drug addiction. But it is advanced in
terms of war concepts, otherwise, it would have stopped fight one war after another.
In the past two decades the United States has already fought from Latin
America to Europe, from Africa to Asia—and in Asia it has already come twice. It is
not completely because of the might of the United States. What is fundamental is its
method of fighting, and the fact that it becomes increasingly strong in fighting wars.
Certainly, we should condemn the hegemony that the United States practices. But we
should learn from its concept of war. I have contemplated the concept of war for a
long time. I always feel that renewing war conceptions is more important than weapon
renewal. The overall national power of China in Qing Dynasty during Jiawu War was
stronger than that of Japan. Although at that time the most advanced weapon had been
introduced into China, we still could not even sustain a war because no advanced
notion of war had been introduced to China then. Iraq War showed us again the fearful
consequence of a conceptual lag.
REPORTER General, what do you think are the key points in the future development of
our military?
LT. GEN. LIU I think the key issues should include the following points: First of all, we
should by all means possess a spirit of “Overwhelming Victory”. Peter F. Drucker, a
management master, said, “It is not a technical revolution undertaking in the current
society, nor is it a software or speed revolution. It is a concept revolution.
REPORTER What are the core and connotation of an “Overwhelming Victory”?
LT. GEN. LIU In the face of new wars in a new age, we should cultivate and establish a
kind of offensive consciousness. That is to say, under the premise of a general
defensive strategy, we should first possess a powerful counterattack capability rather
than a defensive capability. We’ll only stop war by way of conducting counterattacks.
In the Mechanization Age we were defending linearly. We could station troops along
the borders, or to increase the depth of resistance, so that resistance would continue
one after another.
Now we should defend the whole territory. How to defend? Just impossible.
Just as a soldier with only a shield could not win any fights, neither could an army
which heeds only its defense. It could neither win the war nor ensure its security. The
history of military affairs is a history of the offensive. The reason why China's nuclear
weapons has deterrent power is that they can be launched. If they were anti-air
missiles, the deterrent power would not be so strong .
REPORTER As far as defense is concerned, I think it is not a military notion any more for
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many people in the Chinese army. We have, in our mind, inherited the genes from our
ancestors who emphasized defense rather than offense.
LT. GEN LIU That is true. Defense and resistance have been our military thoughts for the
past thousands of years. It is China's topography that high mountains stand erect in the
southwest and northwest parts and several seas lie to its east and south parts, which
constitute a natural barrier in the cold weather times. Only the northern part could
serve as passage, when our ancestors built the Ten-Thousand-Li Great Wall, which had
stopped no one else but ourselves. I have been thinking about it for long. It was not
that the Great Wall was not high and solid enough, but that our concepts on war had
become too conservative. Emperor Qin-Shihuang invaded six kingdoms from an
elevated place. What a spectacle it must have been when he swept away all his
enemy’s troops! Yet he went on to order a “yard wall” be built to fend off northern
nomad tribes. As a consequence, the wall was built and rebuilt, guarded and defended
generation after generation—and never worked.
As time passed to the later period of the Qing Dynasty, the ocean no longer
served as a barrier, but as a royal road. It was a pity that the Qing Court did not try to
change accordingly, and still resorted to defense by erecting emplacement along the
seaside. There were lots of emplacements along the coast, from Humen Fort to Wu
Songkou Fort, Dagu Fort and to Lushunkou Fort, which could well be dubbed the
Great Wall in the Sea. What happened? It left historical debts to us—until now.
It is the age of air power today, and all of the geological advantages we have
would not help any longer. We can not defend ourselves from an invasion even if we
wish to. But some of us have inherited the genes of the conservativeness of our
ancestors, they would resort to nothing else but defense.
REPORTER Several years ago, the United States fabricated the “China Threat Theory”
and we tried to make explanations right away. When did the U. S. ever feel unsafe? It
was always assured and bold. It could be said that in terms of military affairs, there
would be no real security unless one has an offensive spirit.
LT. GEN. LIU We must be strong. A strongman respected by the west would include three
aspects. Firstly, you must have your strength. Secondly, you must show it. Thirdly,
you must make other people understand that you have the courage and determination
to exert your strength whenever necessary. The absence of any of the three aspects
would have disqualified a strongman.
Just now I talked about an “Overwhelming Victory”. Now let’s turn to the
second point: human-oriented. Many Chinese entrepreneurs would like to bring up the
fashionable slogan of “human-oriented”. Our army needs that too. There were also
three meanings here.
29
1. The Spirit to Respect others. Let me again take the cases of Chinese
entrepreneurs as an example. There were always lots of intelligent and capable peoples
among them, but most of them had a common weakness: there was a lack of modern
spirit and humanity in their mentality. When such limitation were, intentionally or
unintentionally, brought to enterprise management, it would be magnified, and it
would hurt lots of people. Once I spoke to some entrepreneurs, I said, “I would know
you are not a big figure simply by judging from your ways of imitating a big shot’s
manners.” They always held money as a priority and humanity, something of the least
importance, which would ultimately lead to their loss both in money and people. They
usually won at the beginning, and lost as an end was approaching. That was the
fundamental reason why Chinese business enterprises never succeeded in making
themselves flourish for long. There was something similar inside the army.
2. Talent Strategy. The strategy to conquer the world was a strategy that stressed
the use of talented people. For thousands of years, mobilizing the masses to fight wars
has been the Chinese way, and the outcome of wars depended on the scale of people
that each side had mobilized. When the Qing Troops fought to suppress the Taiping
Rebellion, both parties used human-sea tactics. That was an offspring of the
agricultural civilization.
Future wars would take on a brand-new look. Rumsfeld’s Theory was to win by
small yet quick and elite troops, which demanded large quantities of professionalized
talents in the troops. In Chinese history, it was always the case that poorer-cultivated
groups defeated better-educated ones, while it was just the opposite in world history; it
was especially so for today’s world.
You might feel surprised by my mentioning of educational level here, but it was
in fact a serious reality in our army. The educational level of the senior and middle
officers in our army had a wide gap with even local officials, let alone with US
military officials. Let me take the case of some big Military District as an instance.
There were five group armies in that particular Military District, and for all 36 officers
holding army commanders and higher ranks, only 3 had received higher education,
while all 8 governor or vice governors of the stationing province had received high
education. As for the 18 division-levels officers in that Military District, none had
received higher education. Many experts and scholars did not do well in predicting the
Iraqi War. It was just because they had not been familiar with the epistemology and
methodology which should be implemented in studying modern wars.
There are no two identical wars in the world. Compared with other fields of
society, warfare has more chance and uncertainty and it was impossible to predict
precisely every part and every stage of the war. But “war is nothing mysterious but a
kind of inevitable movement”. It was possible to “have a general idea of war and its
key points.” Mastering scientific epistemology and methodology was the key to that
goal. Otherwise, one would tend to take the characteristics of the last war as rules, and
30
apply them when predicting a next war; or take special rules in a particular war as
general rules, and repeat the experiences from foreign countries.
Talent is very important—a rare resource. It is particularly important when our

army is currently faced with the task of reduction and reorganization. We should have
the same spirit of respecting and cherishing the talents as comrade Deng Xiaoping did.
Let me give you an example: Why did our military grow stronger rather than weaker
in 1985 when we trimmed down our military force by the millions? Why was there no
such things as talent shortage? That was because Comrade Deng Xiaoping, being
far-sighted, had perceived problems long before others ever thought about it. As early
as in 1983, he had begun to select and promote, in large scale, young and talented
cadres with moral integrity to key positions in various levels. Nowadays most cadres
above the rank of army commander had been promoted then and it was two year later
that large-scale military strengths reduction commenced.
3. The spirit to tolerate different thoughts. Trying to assimilate the thoughts of

others was another manifestation of our cadre’s disrespect to others. Such a
psychology would cause us to have a preference for seemingly obedient and so-called
honest persons in time of need. Zhou Wei, Board Chairman and Chief Executive
Officer of IBM in Greater China Zone once said, “As a high managing director, if you
could not tolerate others and would not promote anyone but those who have the same
ideas and manner of doing things with you, you’ll assemble a group of people whose
mentality is similar to yours and you’ll be in danger. The reason is, when you come to
the end of your wits, they will not be able to help you, as their mentality and
conducting style are almost of the same pattern as your.”
A professor with the Central Party School also said, “If we do not encourage
people to think freely and bring on new opinions, our society will in fact stall
completely, though it might seem to be calm and tranquil.” These words are best suited
to the situation of our Armed Forces. A western philosopher said, “We should be
grateful to variety; it is variety that helps mankind survive.”
Just now I mentioned that genius was rare. But the soil where genius could
survive and thrive was something even rarer. One of the basic characteristics of
traditional Chinese culture was its social tropism, namely that individuals should obey
the collective will and should be overwhelmed by the collective, and a lot of talented
people were thus strangled relentlessly. If a person wanted to be just so-so, few people
would stand in the way. If a person wanted to excel, he would then be checked. And
while tricks like to be covered, truth loved to be naked. Those who were willing to
vend their own opinion were courageous and unselfish ones. This was my reflection,
my agony. My agony made me reflect, and my reflection in turn brought me agony.
The most profound agony was that the agony was totally inevitable. The foregoing
words could also be considered as criticism. The sharper the criticism was, the more
profound the reflection.
31
REPORTER The 16th National Congress of the Communist Party of China put forward
the issues of Theory Innovation and Striding Development. What do you think about
them?
LT. GEN. LIU The PLA is a glorious and invincible army. We have won over numerous
enemies and all kinds of hardship, dangers and difficulties. When we face the
challenges in new military revolution, we must have a clear-headed understanding on
ourselves, on the time and on our rivalries. We should have grand conceptions and vast
accommodation. We need innovation, which is the soul of all theories, which in turn
serve as the roof design of highest level for military development.
We should consider the innovation concept in the military theory from the
height of life and death, survival and perdition of our country and nation. The real
value of research in military theory can be tested only in armed clashes.
We have to realize that, compared with the reforms in other fields, the
reforming pace in the military is not quick enough, and our ideas are not bold enough.
The fact that military reform lagged behind the overall national reform was a result of
the history. If falling behind a little could still be accepted, then falling too much
behind would be a serious problem. Modernization of the national defense is the pillar
of our national modernization.
A military expert of the United States once said, that when facing future wars,
we should be prepared neck and above, not neck and below—if we had no choice by to
fight.
Less than 4 years into the 21st Century, mankind has already experienced two
large-scale wars. Both wars proved that air power had reached the climax of warfare. It
was not a terminal point; it was a new starting point. Today marks the earlier stage of
the air force of the space age, which has foreshadowed such a trend: it would first
transition from air power to sky-space power (space as a supporting element), and
continue to space-sky power (space as a dominating element). Just as air battlefields
were an expansion of ground battlefields, space battlefields would inevitably be an
expansion of air battlefields. The Pentagon said, “We have to stop thinking about
tomorrow and think about the day after tomorrow”. I am beginning to wonder what
kind of war the day after tomorrow will have.
As Giulio Douhet remarked about one hundred years ago, “Victory always
smiles upon those who have foreseen the changes in the modes of war”. Let’s then
consider the following question: as we are heading into the 21st Century, with its wars,
can we see the smiles that Giulio Douhet has seen?
32
CHINA-AMERICA THE GREAT GAME CHINA IS AN ENIGMA
CHINA IS AN ENIGMA by Francesco SISCI
Only the Chinese seem able to prevent this from becoming another American century.
But if before September 11th Beijing was in Bush’s sights, the war on terrorism has
changed his priorities. The challenge is postponed. Until when?
A t the beginning of 2001, the first Bush
administration had marked China as the future strategic threat, in place of the defunct
Soviet Union. September 11th changed the order of American priorities: first place was
given to the struggle against Islamic terrorism and its sponsors. But in the background
China continues to represent a geopolitical, economic and ideological challenge. The
point is not if, but when and how Beijing will return to first place on Washington’s
strategic agenda.
Under the geopolitical profile, China is disconcerting first and foremost for its
demographic and territorial dimensions and for its position. The Middle Kingdom in
fact has the largest population in the world and is the second largest country in Eurasia,
placed in a strategic position between Indian, Russia and Japan. Its strengthening or
destabilization therefore decisively effect the United States’ role in Asia. Beijing
possesses nuclear weapons, but its doctrine in that regard is geopolitically more astute
than Moscow’s. The Chinese leadership considers the threat of a Chinese atomic bomb
capable of striking an American city a sufficient deterrent. Thousand of costly
intercontinental ballistic missiles are not necessary: in all, the Chinese military has
about twenty of them. But the effect of deterrence was a remains similar to that of the
much vaster Russian arsenal.
The economic challenge is all too evident. A country of 1.3 billion inhabitants,
growing at the rate of 10% a year may surpass in volume the American economy
between 2020 and 2040. Bush knows well that the Chinese leaders are determined to
avoid a conflict with the United States, convinced that time will work to affirm their
country as primary economic power (and not only that) on a global scale.
Lastly, the ideological factor. China remains the last great power to define itself
as communist and continues to oppress its people with systematic human rights
violations. After the bloody repression in Tiananmen Square, Beijing continues to
curtail freedom of religion and expression, American values par excellence. Since time
out of mind, the US has been inclined to view friends and enemies through the prism
of these principles. The repression of freedom of religion in particular, is considered
intolerable by the Americans, even more than the inability to express alternative
political ideas.
Before September 11th, the combination of these three elements had produced in
America the sensation of a lethal mixture, theoretically even worse than the Cold War
33
threat, given that 21st-century China combines the economic challenge (of Japan in the
1980’s) with the military one (USSR).
2. From this perspective, the determination to oppose China displayed by the Bush
administration in the first months of 2001 did not appear to be a sudden decision, but a
policy matured over time. Clinton was in fact already lined up to support the project of
National Missile Defense (NMD) and the system of Theatre Missile Defense (TMD).
By the end of the 90’s the Chinese had given up their opposition both defense
systems—as they would have provoked a new arms race—focusing only on TMD,
which would have protected the island of Taiwan, which even the US considers part of
the Chinese territory. Such a change of direction was an attempt at conciliation with
Washington: China recognized the United States’ legitimate defense concerns (NMD),
but refuted its encompassing one part of Chinese land—Taiwan—to the detriment of
another—Beijing. In any case, once installed either NMD or TMD would have
rendered innocuous the threat of Chinese ballistic missiles. It then would have been
easy for Washington to pressure a China virtually deprived of its potential for nuclear
deterrence.
The beginning of Bush’s first term was marked by a wave of accusations
towards Beijing for the presumed sale of weapons to Iraq. The reality was ambiguous:
the optic fibers China sent Saddam could be used for telecommunications as well as
for military aims. The incident however demonstrated the American willingness to
challenge its Asian rival. Moreover, the government announced an enormous arms
contract with Taiwan. Finally, the episode of the American spy plane Ep3, shot down
over the Chinese island of Hainan on April 1, 2001, marked the acme of tensions
between the two countries.
So, on the eve of September 11th, the People’s Republic of China seemed to be
encircled: over the sea lay Japan and South Korea, American allies; to the north,
Russia, closer to Washington than Beijing; to the southwest, India, with which Clinton
had forged new relations after its nuclear experiments in 1998; and to the southeast,
the ASEAN nations, whose relations with the Chinese remained rather ambiguous.
Thus emerged the typical profile of the American policy of containment and
engagement. The containment was geopolitical, while the engagement was the fruit of
the penetration of American firms deeper into the Chinese market. In this vision, China
would not have been pushed to collapse, like the USSR, but would have been changed
from the inside, preventing geopolitical and economic expansion in Asia and beyond.
The advantage of this doctrine was the “congealment” of the Eurasian continent
into a geopolitical puzzle of blocs able to act as counterweights to one another. In this
space the security of the commercial routes passed over the sea, under the control of
the imposing American naval presence, whereas continental routes were rendered
insecure by geopolitical fragmentation.
China was forced to watch over the sea, its formidable economic development
being centered on the coastal regions. But also because Taiwan remained the great,
unresolved national question, and because its growing thirst for energy demanded
resources from Middle Eastern oil wells, even more than Russian or central Asian ones.
34
Once constrained and exposed on the seas, China was strategically in American hands.
And so little option remained other than to submit to the will of Washington.
3. On September 11, 2001, the attacks on New York and Washington demonstrated
on live television that the true enemy of the US was not China but Islamic terrorism.
In the face of the tragedy, Bush had to reorder strategic priorities. Even if the Chinese
challenge was real, it was necessary to put it aside to confront a much more
determined and unscrupulous enemy, which had declared war on the United States.
On the other front, it offered China the possibility of proving that it was not a
strategic nemesis of the US. As al-Qa’eda had its geopolitical base in the black hole of
Afghanistan, Beijing could contribute to the American war. First, during the long
Afghan war involving Moscow, the Chinese had passed arms to the anti-Soviet
guerillas. Besides this, they possessed a network of informers and a legacy of
intelligence accumulated in the years of tension with the Uyghur separatists of
Xinjiang, supported by the Taliban. Jiang Zemin placed those dossiers at Bush’s
disposal. His spirit of collaboration surprised the White House. China also took to
actively collaborating with the United States to hold Pakistan, its historical friend,
under control, opening itself simultaneously to Indian, against which it had fought a
brief but violent border war in 1962.
On the military level, al-Qa’eda’s attack on the heart of America, with one blow
set the architecture of NMD and TMD at zero, confirming the thesis of two Chinese
colonels, Qiao Liang and Wang Xiangsui, published in 1999: technological superiority,
however absolute, cannot substitute for strategy.1 It was therefore not worth the
struggle of pursuing the US in an arms race; better to concentrate on strategic
elaboration.
It was necessary to reconsider Chinese military spending. Modernization of the
armed forces did not have to become an impossible technological competition with the
US, but rather the specific adaptation of means to strategic ends. Suddenly, the
Chinese military horizon became simplified. While the United States had to strike any
menace across the whole world—an impossible task, since he who defends all defends
nothing—China could chose what to protect and how.
Lastly, on the ideological level, the clash with Islamic extremists revealed the
risk of the making the entire Muslim universe an enemy, unleashing the religious war
desired by al-Qa’eda. Therefore, in November 2001 Bush elaborated to Shanghai a
theory on nations that had accepted the marked as the motor of economy and those
opposed it. It was a much broader definition than the classic “democracy: yes or no”
(with its delicate cultural implications). The objective was to include China in the
circle of friendly or at least useful states, confirming on the other hand the exclusion of
countries like Cuba and North Korea—this last relegated to the Axis of Evil with Iraq
and Iran. Ideological friction between China and the US was thus limited. The question
of democracy, which until that moment divided the two countries, was placed aside for
the time being. In the American strategy the confrontation with China was not
1
Cfr. Q. Liang, W. Xiangsui, Guerra senza limiti, edited by F. Mini, Editrice Goriziana, Gorizia 2001.
35
eliminated, only postponed for when the US had regained control over the Middle
East.
The Sino-American cooperation on Afghanistan also had a precise domestic
motivation for Beijing: the liquidation of the bases of logistical support for the
separatists of Xinjiang.
Today Chinese development involves 300 million people, who produce more
than 70% of the GDP and live mainly near the coast. The remaining billion, from
which comes just 30% of the GDP, reside further inland. The transfer of millions of
people from China’s heartland to its coast is already underway, but it is not realistic to
imagine that a billion Chinese can move to already wealthy regions to realize their
dreams of the good life. It is the good life that must come to them. Once Afghanistan
(and Pakistan) is pacified and stabilized, goods to and from east Asia could reach the
Mediterranean along the ancient central Asian Silk Route, contributing to the
development of China’s heartland and saving a vast degree of time and money.
4. But first it is necessary to confront and resolve four strategic nodes, all crucial
for China’s development and for Sino-American relations: Korea, Japan, India and
Pakistan.
Korea. For the North Korean regime, on the verge of economic collapse, the
threat comes not so much from the American military as from the economies of China,
Japan and South Korea, which threaten to crush it. Moreover, the end of Kim Jong-il’s
dictatorship is not in the interests of Russia, its other great neighbor. If Nippon-Korean
wares pass overland through the Chinese Northeast, and from there flow towards
Europe running across central Asia, they would avoid Siberia, cutting the Russian
Federation out of a vital traffic of exchange.
At the beginning of 2003 North Korea alarmed the world, announcing its ability
to launch nuclear missiles against South Korea and Japan. Kim Jong-il does not want
war, but uses atomic blackmail to obtain financial assistance without losing face. He
needs to save himself from economic collapse and for this he seeks a dialogue with the
US while threatening to develop his atomic program. But this reasoning is misguided
because it rests on premises derived from the Cold War.
North Korea was once important insofar as it enjoyed the support of China and
the Soviet Union. But today China and South Korea, which fought for control of North
Korea a half century ago, are both interested in a peaceful solution to the North Korean
question. As far as the US is concerned, once it might have been concerned that the
opening of ways of land traffic allowed others to avoid the maritime passages under its
control; but after the war in Afghanistan the situation has changed. The Americans are
present in force in central Asia, so they now watch over both their nautical and their
land-bound routes. In sum, if Pyongyang’s strategic importance is considerably
diminished, from the military point of view is continues to represent a threat for South
Korean and Japan.
The possession of nuclear weapons on the part of the North Korean regime may
besides change the character of relations between the two Koreas. South Korean
36
public opinion remains interested in dialogue, but under the nuclear threat it could
have a worrisome reaction. China knows this well and consequently aims at the
denuclearization of the Korean peninsula. But how can it force Kim Jong-il to
renounce the atomic bomb without further damaging its relations with North Korea,
with which it has until now managed to maintain a fairly good rapport?
In 1950 Mao Zedong made a historical decision for his country and for the
world, deciding that it was better to fight the Americans in Korea rather than
re-conquer Taiwan, last refuge of the Kuomintang nationalists. If half a century ago
Korea was the cause of war between the United States and China, now it offers a
chance at cooperation, which to a certain extent is already underway. Both Washington
and Beijing are concerned about Pyongyang’s nuclear program, but both fear the
possibility of a North Korean collapse. Both countries agree that the threat to regional
stability derives less from the most improbable risk of a North Korean nuclear attack
on a neighboring country than from the rather certain eventuality of North Korea’s
economic collapse. It would produce enormous tensions in South Korea by forcing it
to absorb its brothers from the North and attend to nearly 22 million indigents.
Inevitably, part of the burden would end up on the shoulders of China and Japan as
well.
Nonetheless, China has tools at its disposal to pressure North Korea. Until
now, most of North Korea’s economic aid comes from Beijing, and nearly all that of
other countries passes through China. Moreover, hundreds of thousands of North
Korean refugees have found sanctuary there. Potentially, China could put up many
more or even open its borders, thus ordaining the end of Pyongyang’s regime. It is
highly unlikely that Beijing will use these means, but the sole fact of possessing them
renders it the only state able to profoundly influence Kim Jong-il’s choices.
In the wake of the war on terrorism, the containment of North Korea has
therefore created a geopolitical accord between Washing and Beijing. One could
imagine that such ties could save the Chinese from the necessity of democratic and
liberal political reforms. Hardly: some reforms are inevitable and will be brought
forward, gradually and under the government’s control, independent of any external
pressure.
Japan. If Beijing and Washington don’t manage to untie the North Korean knot,
Tokyo could attempt to do so directly. This question then is very delicate. China
should find a way to guarantee Japan’s security, blocking North Koreas nuclear
programs and geopolitical ambitions. Otherwise the US would have to reinforce their
strategic position to prevent Japan’s rearming—a scenario with unpredictable
consequences for Asia and for the world. In this sense the North Korean nuclear
program is a knife to China’s throat. Pyongyang’s bombs are a true threat only to Japan,
and this complicates the Chinese game. Beijing must commit itself to bringing the
North Korean regime under control, and quickly.
Beyond this, in the last few years, distance has grown between Japan and the
United States. Increasingly, Tokyo doubts the Americans military guarantee. Bush’s
choice to give precedence to the Iraqi campaign over the necessity of blocking North
37
Korea’s atomic programs—Japan’s priority—has further widened the gap in the

geostrategic perceptions of the two allies. Thus, the growing Japanese international
activism , the willingness to send troops abroad, if only for missions declared as
peaceful and humanitarian, and the inclination to reinforce its military potential
beyond the constitutional limits imposed by the US after the Second World War.
This prospect does not seem to bother Beijing. In an optimistic vision, one
could therefore imagine the possibility of a trilateral United States-China-Japan
cooperation for the stability and development of the Far East.
India. Any scenario of collaboration between the United States and the great Asian
powers cannot exclude India. One therefore poses the question of historically
tempestuous Sino-Indian relations. Some cracks have opened however in the last two
years.
On April 20, 2003, the Indian Minister of Defense, George Fernandes, main
supporter of the theory of the “Chinese menace” and the one who led the way in 1998
to the first Indian nuclear tests, spent a week in Beijing for colloquy. Some days later,
delegations from Pyongyang and Washington started multilateral talks with the
Chinese to move past the stall on the North Korean crisis.
The Indian mission was very important because it put in front of Beijing a
variety of open questions: Chinese support for Pakistan, (atomic) archenemy of India,
the presumed Chinese observation posts in the Gulf of Bengal, not to mention the
dispute over 4 thousand kilometers of border between India and China. While not
producing immediate concrete results, the summit signaled the beginning of a thaw
which appears promising for the future of relations between China and India, the two
most populous countries in the world. That in turn could help to resolve the
Indo-Pakistan dispute over Kashmir and reduce tensions in certain unquiet areas of
Pakistan, where the activity of Islamic fundamentalism appears outside control.
Once again, the war on terrorism can create common ground between powers that until
yesterday were fiercely at odds.
Pakistan. The war on Islamic terrorism has cooled traditionally good

Sino-Pakistani relations. China sees in Pakistan a neighbor increasingly unstable and
increasingly less reliable in suppressing the Islamic terrorism which aids Xinjiang’s
secessionism. Before September 11th, Islamabad played an ambiguous game towards
the Chinese “Taliban” active in Xinjiang, partly keeping them under control and partly
allowing them to act freely. This ambiguity gave Pakistan strength and influence in its
relations with China and with the Afghan Taliban.
Since the Autumn of 2001, the Pakistani leader Musharraf has made his choice
owing to American pressure; in some sectors of the Pakistani armed force, concern
grew over Chinese repression in its conflict with the separatists of Xinjiang, now
recompressed in the vest cornice of the war on Islamic terrorism blessed by
Washington. Further tension derives from the influence of Chinese technicians in
Pakistan, despised by a good part of Islamabad’s military establishment.
38
5. The war on terrorism has therefore opened a large window of opportunity to

better Sino-American relations. The growing interdependence between the two
economies should in time consolidate this potential partnership, provided that in
Washington as in Beijing, the forces that continue to believe in the inevitability of a
clash between the two powers do not prevail. For now, Bush has opted for
competition/collaboration with the Asian giant, at least until the game against Osama
bin Laden and his associates ends. As far as China is concerned, it seems to have
made a strategic choice: at least for the next 20-30 years it absolutely wants to avoid a
settling of accounts with the United States given its evident inferiority. Then they will
see.
When an American missile hit the Chinese embassy in Belgrade during the war
in Kosovo in 1999, Jiang Zemin got the message and decided to never again expose
his country to US reprisals. That line remains valid under the leadership of Hu Jintao.
Today Beijing considers itself a regional power, not yet a global one, even if its need
for energy provisions projects it onto the international scene, from Venezuela to Africa
and the Middle East. It thus attempts to consolidate the economy reducing the gap
between rich and poor regions, to cautiously move forward with political reforms and
to extend its sphere of economic-political-cultural influence in Asia.
Underneath it all, naturally, lies the territorial integrity of the People’s Republic
of China. Taiwan remains the most immediate risk of a clash between China and
America. The defeat of the pro-independence president, Chen Shuibian in the 2004
parliamentary elections is a reassuring sign for Beijing. But the game is hardly over.
The Taiwanese lobby in the United States remains very influential and active in
contesting the official policy of “One China”, which is to say of the sovereignty of
Beijing over all its provinces, including the “rebel” Taiwan.
Besides this, Tokyo contributes to inflaming the atmosphere in the Strait of
Formosa, flirting with Taiwanese separatists to insult Beijing and involve Washington:
if in fact Taiwan had to rejoin the mother country, it would eliminate the principal
reason for tension between China and America, leaving Japan isolated in Asia, in a
geostrategic position analogous to that of the Second World War. For this reason, and
not only this, the quality of Sino-American relations will always be influenced by the
quality of their respective relations with Japan. The Washington-Beijing-Tokyo
strategic triangle remains decisive for equilibrium in the Far East.
39
CHINA-AMERICA THE GREAT GAME SINO-AMERICAN RELATIONS
AND THE QUESTION OF TAIWAN
SINO-AMERICAN RELATIONS AND

THE QUESTION OF TAIWAN by Zhang WENMU
America’s role in the East Asian equilibrium. Taiwan as a matter of honor and
geopolitics. Its significance for China’s future. What China can learn from America’s
history to assure its expansion as a great power.
Asia-Pacific geopolitics and Sino-American relations
T he Pacific region involves relations between four major countries: China,
the United States, Japan and Russia. For China, the most important are Sino-American
relations. Now China and America appear to be opponents, but from a strategic point
of view, they should be friends. What should be noted is, America only treats those
that cannot be defeated as friends; those who obey it blindly will inevitably be
discarded, as can be seen from the experiences of Ngo Dinh Diem, Jiang Jieshi, Dalai,
Yeltsin, Saddam Hussein as well as the Georgian president, Shevardnadze, who
stepped down recently. Japan will be discarded sooner or later. It lacks the competence
to operate independently but does not know whom it should follow. Li Denghui would
like to offer Taiwan to Japan, who would like to take it, but dares not. Li Denghui
desires in his heart to be Japanese, but this dream cannot be realized any time soon.
China and America are far from each other. In the future the two countries will
conflict with one another. From the last century, we can see that nearly all major
political disasters have been solved under the cooperation of the two countries.
In the early 20th century, some European countries wanted to divide China into
several pieces. America was firmly against this. For the future it is also unwilling to
see a completely disintegrated China and will ensure the existence of China as a whole.
If China fell, a huge black hole would appear in Asia. India and Japan would rise, and
Russian power would extend southward. The situation would be difficult for America
to deal with. It has long been Japan’s strategy to dismember China, and now for Li
Denghui and his diehard followers as well. One of the important views in The Voice of
Taiwan, a book by Li Denghui, is to destroy the Chinese nation and dismember China.
For he knows all too well that in the Asia-Pacific region, if China and Russia do not
fall, it will be impossible for Japan to have its old dream of “great East Asia.” And if
Japan does not rise, “Taiwan’s independence” remains out of the question.
Recently there has been a prevalent idea that Japan will inevitably become
stronger. This statement is one without a precedent. For, competition between powers
40
is not only measured by economic aggregates and GNP per capita. If that were the case,
Switzerland would also be called a power.
Meanwhile, if there are military forces but no geographical space, the forces
would be at a disadvantage because of small territory. The so-called international
structure is in essence what remains after distributing security spaces among powers.
The existence of a power must have a tolerable peripheral area for security. Both the
Vienna System after Napoleon war and the Yalta System after World War II were
centered on victorious nations, particularly on how the extended security spaces were
distributed. If two people stand too close to one another, they will feel uncomfortable.
It is the same for nations, especially big ones,. There are more small nations between
big powers, which act as buffers for them.
Japan’s geopolitical situation is very weak, impeded on four sides. In the north,
Russians are stepping on its tail, holding the “four islands”. In the south, America is
holding the bridle on Okinawa. Since America has been so kind to Japan, why does it
not support Japan’s taking back the four islands in the north? On this issue Americans
have never said anything, let alone done anything. On the other hand, China supported
Japan in the 1960’s and 1970’s.
Japan has been hankering for China’s Taiwan. But America would not allow
Japan to conquer Taiwan. In the early years, just because of Japan’s seizure of Taiwan
after the Sino-Japanese War of 1894, Japan quickly grew strong and attacked Pearl
Harbor. Such a small country as Japan lives in the crevice between China, America and
Russia, and even the Southeast Asian countries show no respect for it. Hence, it has no
geopolitical space, let alone an extended security space.
Drawing lessons from Japan’s history, we can see its possible future. From the
18 century to the early 19th century, China had been a power in the world and Japan
th
had never thought to challenge it. In the 1840’s and 1850’s, China was defeated in the
two Opium Wars. In 1854, America forced Japan to open itself to foreign countries and
Japan had to sign a series of unequal pacts with America, Britain, Holland, Russia,
France and others. Rather than being timid through the national crisis, however,
Japanese enthusiastically made reforms and progress. With the Meiji Reforms, begun
in 1866, a series of policies to develop national capitalism had been formulated. In
military affairs, its navy imitated Britain and army imitated France and Germany. Thus,
in just over 20 years, the tide was turned. In the sea battle of 1895, Japan defeated
China, and in 1905 defeated Russia. After China and Russia’s retreat from northeast
Asia, Japan quickly flourished in Asia and its extended security space rapidly enlarged.
In 1910, Japan imposed the Japan and Korea Coalition Pact on Korea and officially
annexed Korea. In 1927, Japan held the “Eastern Conference” and decided to invade
China. Subsequently, Japanese policies became rapidly militarized, and from the
1930’s on, Japan began to encroach on China by supporting the puppet regime. In
October 1941, Hideki Tojo came to power, broke the limited expansion policy of the
Konoe government, further expanded the scope of the war into Britain’s and America’s
sphere of influence in Southeast Asia and attacked the Pearl Harbor, which caused
America’s entry into the war and made it allies with China. After its defeat in 1945,
41
Japan’s geopolitical interests retreated to that of the state prior to the Meiji Reforms,
one hundred years before.
Some say trade can bring peace. According to the data provided by Warren I.
Cohen, an American scholar, exports from America to China and Japan, prior to the
war accounted for 1.9% and 5.6%, respectively, of the total. But with the increase of
trade between Japan and America, political friction also increased. When the political
differences were impossible to reconcile, they had to be settled by military force. In
the early 1940’s, Japan’s forces crossed the 30° North latitude, and broke into the
sphere of British and American interests. During the same period, though the trade
volume between China and America was small, China and America became allies.
America also dragged China to the Cairo Conference, where Chiang Kai-shek instantly
became a political star. At that time, what Americans needed was Chinese assistance
against Japan. China and America jointly solved the question of Japan, and the Yalta
system pushed Japan back to the starting point of the Meiji Reforms in the Fareast
area.
Next came the Soviet Union. In the 1970’s and 80’s, Soviet offensives forced
the United States to retreat step by step, causing a decline in the American economy. In
1960, the American GDP accounted for 25.9% of the world total; by 1970, it decreased
to 23%, and by 1980 to 21.5%. At the same time, Japan’s and China’s proportions had
been quickly rising. From 1960 to 1980, Japan’s GDP rose from 4.5% to 9%, and
China’s from 3.1% to 4.5%. Fortunately, the Nixon administration adjusted its foreign
policy and made an alliance with China, and the expansion of the Soviet Union in the
Asia-Pacific region and the recession of the United States were effectively halted. It
can be concluded that America alone would be incapable of solving the Asia-Pacific
problem.
The present conflict between China and America is similar to that between
American and Britain in the 19th century. Superficially, their are geopolitical
differences. On a deeper level, there is conflict due to the quota of world resources.
After over 20 years’ resource exploitation and development, the domestic resources
that have supported China’s economy have been nearly exhausted. China cannot
continue its large scale exploitation. Otherwise, the sand in the northwest will drift
over Beijing, then over Hangzhou and Guangzhou. Nature itself is rebelling. Take a
look at the geomorphologic map by satellites. Most of China is yellow rather than
green. Hence, China is now participating in the distribution of the world’s resources.
Without resources, the goal to “construct the overall society with a happy life” would
lose material support. Many years ago in anti-hegemonic struggle, Americans
successfully participated and shared international resources with other hegemonic
states; for China today, there would be no better option.
From a long term strategic perspective, China and American should be friends.
The only thing China has to remember in dealing with America is, when America beats
you, even if you do not fight back, at least make the victory a painful one. In the
Asia-Pacific region China has important security interests, and the sovereignty of
Taiwan is a matter of life-and-death for China’s national interests. China, as a big
42
power, cannot compromise on this. The present problem is, America is trying to repeat
what Britain did to limit America two hundred years ago, pushing aside China’s
marine interests. The question of Taiwan is the bottom line of China’s security interests,
but this is not even the bottom line that America seeks from China. In the face of such
excessive demands, standing in China’s shoes, Americans would not themselves
acquiesce, but would surely rise and fight back.
The question of Taiwan determines the Asia-Pacific strategic structure
For the Asia-Pacific powers, the question of Taiwan involves the entire regional
structure, of which Diaoyu Island is the key. The question of Diaoyu Island is not in
whose territory it has been since “ancient times,” but in its being the geopolitical
“death point” of a possible Tai-Japan alliance. Realizing Chinese sovereignty of
Diaoyu Island is the key to breaking a Tai-Japan alliance. If “Taiwanese
independence” succeeded, Taiwan and Japan would inevitably unite as allies. This is
the underlying cause of Li Denghui’s denial of Chinese sovereignty of Diaoyu Island.
Li Denghui knows all too well that the one who badly needs Taiwanese independence
is not America, but Japan’s right-wingers. Historically, Japan has hungered for Taiwan,
and a future independent Taiwan needs a Japan with a right-wing government. Hence,
the question of Diaoyu Island is not purely an academic question, but a geopolitical
one, concerning the overall structure of Asia-Pacific region.
The question of Japan is in essence the question of the Fareast Yalta system.
Therefore, it is a question concerning the relations between the three powers—China,
America and Russia—and Japan. The question of Taiwan, however, is in essence the
remaining question of China’s civil war. Since the Korean War began in the 1950’s and
the America’s 7th Fleet sailed into the Taiwan Strait, the question of Taiwan was again
involved in the Cold War structure of the Yalta system. The great changes brought by
the Soviet Union’s disintegration were the disruption of the Yalta system along with
the disruption of the Warsaw Pact Organization, the Kosovo War and NATO’s
eastward expansion. But in the Fareast, the system has been nearly kept intact. If it is
said that it was the “independence movement” of Albanians in Kosovo that caused the
end of the Yalta system in Europe, then the catalyst for the overthrow of the Yalta
system in the Fareast would be the activities of Taiwan Independentists headed by Li
Denghui. From this perspective, a Taiwan that was forced into what remains of the
Yalta system would influence the relations of great powers in the Fareast. This is why
America and Russia unanimously oppose Taiwan’s “independence.”
On the schedule of Taiwan’s reunification, the Chen Shuibian administration in
Taiwan is engaging in a chronological contest with the central government. The central
government of China hopes that a long period of waiting will make most of the people
of Taiwan realize the danger of “Taiwanese Independence” and, together with the
central government, check this tendency and ultimately the goal of reunification will
be reached. Taiwan’s administration, since Li Denghui, has been quickening their steps
43
for independence. On November 11, 2003, Chen Shuibian expressed his wish that on
December 10, 2006, the Day of Human Rights, a general vote would help to determine
the contents of the new “constitution”.
Meanwhile, Japanese Prime Minister, Junichiro Koizum, again stated (on
November 4) that Article Nine of the peace constitution would have to be revised to
make their Self-Defense Forces into “forces worthy of the name.” Japan’s present
constitution explicitly stipulates that “the Japanese people forever renounce war as a
sovereign right of the nation and the threat or use of force as means of settling
international disputes.” On December 12, 2003, the anniversary of the Japanese
conquest of Nanjing, the Taibei Office of the Japan Interchange Association held a
party for the Emperor’s birthday and invited the “Foreign Minister,” the
“Secretary-General of the President’s Office” of Taiwan and others in spite of China’s
opposition. These messages, one after another, reveal that in the years ahead the
interaction of Japan and Taiwan would loom over the East Sea and tighten the
geopolitical structure in the Asia-Pacific region. Japan will evidently intervene, which
is a new change that deserves China’s close attention.
The question of Taiwan concerns China’s overall modernization
The core of China’s Asia-Pacific geopolitics is the question of Taiwan, which

concerns not only China’s sovereignty, but also China’s sea power, as well as its
overall modernization.
Taiwan represents China’s forward base into the Pacific Ocean and a means of
realizing its sea power interests. If Taiwan were reunified, China would completely
break the island chains that America constructed to block China in the West Pacific,
which has an even greater significance than America’s seizure of Hawaii. If Taiwan
were reunified, China could check Japan’s designs on its northeast portion. In the
south a forcipate protection of the islands in the South Sea can be formed together with
Hainan Island and provide an effective guarantee to China’s ships passing through the
Malacca Strait. In the west, the southeast security space of China can be expanded and
form a front guard for the southeast golden economic belt.
In addition, China’s reunification progress coincides with the progress of
realizing China’s sea power, for which reunification of Taiwan particularly crucial.
Without Taiwan, the Nansha islands can not be protected. If it is said that the
geopolitical key to the South China Sea is the Malacca Strait, then the islands of
Nansha within China’s sovereign sphere are the key for China to realize its sea power
interests in the South China Sea. As a big power, China will inevitably have its own
sea base. If Diaoyu Island and Taiwan come back to China, the security interests of
China in northeast Asia and Southeast Asia will be guaranteed. Unlike in 1894, Japan’s
modern aircraft carriers cannot dominate in the East Sea in an age of satellite guidance.
Historically, the prerequisite for Japan’s rise in northeast Asia was the decline of
Russia and China, and the prerequisite for its rise in the Pacific region is the decline of
44
China, America and Russia. In the 1990’s, the Soviet Union disintegrated, but Russia
remains standing. As long as China does not fall, Japan has no chance of becoming a
power: Russia steps on its tail, America holds its bridle, and in the middle, the Asian
countries are a thorn in the side of Japan’s right-wingers.
The question of Taiwan should be seen as an organic part of China’s
modernization. It is not only a question of China’s sovereignty, but a question of
realizing China’s development rights. In the 1860’s, Germany was divided into several
hundred city-states, which gravely influenced the economic development of Germany.
Bismarck carried out his policy of blood and iron for about eight years and unified
Germany, while China has discussed this for over half a century. The question of
sovereignty can never be raised. To China, the question of Taiwan is a question of its
navy. To develop a navy on a large scale is the key to solving “Taiwanese
Independence.” Li Denghui and his rock-headed followers should be dragged to
China’s naval post rather than to discussions of “international situations”. “Peaceful
reunification” is possible only when Taiwan is closely held in the arms of China’s
navy.
The reason that the question of Taiwan cannot be ignored is that it involves
China’s overall situation of modernization. Taiwan is the frontal protective barrier of
China’s economic golden belt in the southeast. If Taiwan was lost, threats from the sea
would directly endanger the golden belt that produces large quantities of high-tech
goods.
Taiwan involves China’s overall situation of modernization also because the
success of “Taiwanese Independence” would trigger a chain reaction, causing China’s
coastal areas in the southeast to decentralize. If not confined by the country, the rich
would always be reluctant to stay with the poor. The disintegration of primitive society
was due to the fact that the growth of productive forces in the tribes created larger
economic differences . If our economic growth caused China’s disintegration, it would
be contrary to our aim of developing the overall economy.
Taiwan is where China’s sovereign interests lie, and a “blood and iron”
determination is needed to deal with it. The reunification of Taiwan is China’s vow to
the world and also a sign of China’s standing. However, China’s vow in solving the
question of Taiwan does not lie in the reunification of Taiwan itself, but in that, after
the reunification of Taiwan, China would follow Bismarck’s path, making friends with
other powers instead of creating conflict, being strong but not showing off its strength,
and having the courage to use force without abusing it. In the future, China should try
to develop the necessary forces for national defense, but be cautious about employing
them.
In the reunification of Taiwan, we should also learn from Lincoln, for his
courage in confronting hegemony and spirit to fight. After the American War of
Independence, Britain was not reconciled to its failure and invaded America in 1812.
In 1814, it even sent troops into Washington, trying to dismember America again. But
it was defeated and had to retreat to Europe. During the Civil War, Britain supported
the South to separate the country, but finally, under Lincoln’s firm will, it failed once
45
again. Since then, the United States has enjoyed national sovereignty and national
markets in the real sense, which underlay America’s rapid economic development. By
the middle of the 1880’s, America had become a major industrial power in the world.
By the end of the 19th century and the early 20th century, America’s domestic economic
development widened the gap between the poor and the rich, which caused social
disruption, demanding that America pay attention to foreign markets. Therefore,
America had to break the power of Britain and other maritime hegemonies.
Immediately, America conquered Hawaii, Cuba and the Philippines in 1898. Since
then, America’s marine frontier was extended to the Fareast.
“Time and tide wait for no man.” Americans broke Britain’s hegemony in a year
and realized the geopolitical interests necessary for an industrial country. What a
contrast! The slogan of reunifying Taiwan has been shouted for over 50 years, but
Taiwan is drifting further and further away. Therefore in the question of national
reunification, China should have Bismarck’s determination and Lincoln’s courage to
confront hegemony in keeping the nation united. Some say we should first properly
deal with domestic affairs. Have a look at history: in the 1880’s Americans had more
social problems than China. By the early 20th century, America broke the “Western”
blockage on the sea, a large amount of overseas profits flew back to America, which
came to the front row of the welfare states, and within the country they began to create
policies to protect consumers, increase investment in education and deal with other
social issues. Why? They had money. From where? From the overseas high profits
flowing back to America.
China proposes the goal of “constructing the overall society with a happy life,”
under which tradition, small agriculture is disintegrating, nearly a billion farmers have
increasingly less income and the resource environment is exhausted. National modern
agriculture instead of that affiliated with international capital and rich resources are the
bases of modern national industrialization. America’s agriculture has been
industrialized and adopted the market principle, and America also has resource
supplies from around the world, hence its huge productive development is sustainable.
China’s agriculture has not undergone industrialization and market reform. What is
worse, it is now in danger of falling into the Latin American trap while losing its
nationality. This will drastically restrict the sustainable development of China’s
industry. The agricultural bankruptcy will result in farmers swarming into cities. The
number will be disastrous for China’s cities with limited capacity. Now China is
undergoing the same course experienced by America over one hundred years ago. If
China wants to realize its goal to rise in the world, it probably has to learn from
America: to strengthen national sovereignty in confronting hegemony, to unify the
national market in confronting hegemony, and maintain with force the right to equally
share the world resources to which all sovereign nations are entitled.
46
CHINA-AMERICA THE GREAT GAME MADE IN THE USA: THE FUTURE OF
INT. JUSTICE AND THE WORLD ORDER
MADE IN THE USA: THE FUTURE OF INTERNATIONAL

JUSTICE AND THE WORLD ORDER by Yu XILAI
The evolution of international justice in the 20th century. The legacy of Wilson and
Roosevelt. Contradictory ideas of human rights. The dilemma that American
isolationism poses for a stable world order. Why China (and the world) should accept
global constitutionalism as the means for securing peace.
The Evolution of the Idea of International Justice
L ike the notion of justice proper, the notion of international justice develops
and changes with history. Widely acknowledged notions of international justice (such
as national self-determination, sovereign equality, and nonintervention in internal
affairs), were formed much later than domestic notions of justice. In the formation of
the notion of international justice in the 20th century, Americans made the largest
contribution. Hence Wilsonianism and Rooseveltism became milestones of the notion
of international justice in the 20th century. If Jeffersonianism and Monroeism were
declarations of self-determination and autonomy on the American Continent,
Wilsonism and Rooseveltism were appeals for national self-determination and national
autonomy for the whole world.
After entering World War I, President Wilson delivered an address to Congress

on January 8, 1918, in which he put forth the famous “Fourteen Points.” In the
fourteen points, which he called the “program of world’s peace,” Wilson said, “What
we demand in this war, therefore, is nothing peculiar to ourselves. It is that the world
be made fit and safe to live in; and particularly that it be made safe for every
peace-loving nation which, like our own, wishes to live its own life, determine its own
institutions, be assured of justice and fair dealing by the other peoples of the world as
against force and selfish aggression.” As the outcome of the war was determined by
the preponderant strength of the United States, the fourteen point program naturally
became the guideline for the postwar settlements, which had received wide
international acclaim, particularly among small nations and the defeated nations.
On August 14, 1941, US President Roosevelt and British Prime Minister

Churchill signed the Atlantic Charter on the US cruise ship, Augusta. In light of the
fundamental principles of the Charter, the four major signatories, the United States, the
47
Soviet Union, the United Kingdom and China, formulated the draft of the United
Nations Charter in the fall of 1944 in Dumbarton Oaks in the suburb of Washington.
The Atlantic Charter and the United Nations Charter are the embryo of widely
acknowledged contemporary notions of international justice. The “Four Freedoms”
illustrate the essence of Rooseveltism: freedom of speech and expression, the freedom
of every person to worship God in his own way, freedom from want and freedom from
fear.
In the fourteen points, Wilson expressed his longing for a world that “be made
fit and safe to live in,” and the means to attain the goal was that all nations would,
“like our own”, be able to “live its own life, determine its own institutions, be assured
of justice.” However, when Wilsonians brought the concepts of self-determination,
autonomy and democracy to the world, they had not clearly realized that some
fundamental differences existed between the domestic community and the
international community. The subject of the domestic community is the individual.
Meanwhile it is sometimes hard to determine who the subjects of the international
community are. If they are nation-states, then the majority nowadays are not
single-nationality states. Between Yugoslavia, Serbia and Kosovo, which is the most
qualified to be a subject of the international community?
Since it was proposed, the theory of a right to self-determination has

encountered increasing difficulties in practice. When proposed by Wilson, it was
meant to solve the national problems of the Austro-Hungarian and Ottoman Empires.
However, the Republic of Czechoslovakia, established out of the rubble of the
Austro-Hungarian Empire, had a new national problem: the issue of German-majority
Sudetenland, which later became one of the prime causes of World War II. Wilson’s
Fourteen Points, Kissinger observed, accepted the principle of national
self-determination indiscriminately, without taking into consideration power relations
as well as the various ethnic groups who attempted to settle their accumulated feuds by
all means.
Theoretically it is possible to maintain that all states, small or large, are equal in
sovereignty, but practically it is infeasible. The extant international organizations may
be classified into three types. In the first, sovereignty is equal, as in the United Nations
General Assembly, United Nations Educational, Scientific and Cultural Organization,
United Nations High Commissioner for Human Rights and others. In the second, the
rights of sovereign members are unequal, such as the UN Security Council, the
International Monetary Fund and the World Bank. In the third, member countries share
equal rights, but the conditions to join are extremely rigorous, such as the G8, APEC,
WTO and others. In fact, sovereign equality is maintained at the expense of equal
human rights. Is it fair that that China, with a population of 1.3 billion, possesses the
same right in the international community as an island state with a population of no
more than several thousand? In a free and democratic domestic community, only
48
citizens enjoy equal political rights. A corresponding theory and practice have not yet
been well established in the international community. Just as the population explosion
in many developing countries led to the increase of youths in the demographic
structure, the “population explosion” of the international community in the second half
of the 20th century led to the domination of the United Nations by newly risen,
immature nations. If an international organization makes no distinction between
mature and infantile nations, a farce will result, in which children in a kindergarten
elect the master and determine the rules.
The principle of non-intervention in internal affairs implies that governments

possess the ultimate sovereignty within the realm of a state. Sovereignty in the
international community corresponds to individual freedom in the domestic
community. Wilsonians conceived that those nations that had acquired national
self-determination would practice autonomy and construct a community “safe to live
in…like our own.” As the 20th century shows, however, the majority of new states
have not spontaneously followed the developing route as taken by the United States
after independence. “Rational governments” are rare, and governmental leaders like
Mobutu Sese Seko, Idi Amin, Marcos, and Suharto by far outnumbered those like
Gandhi and Nehru. Thus, since the 1990’s, the theory and practice of “human rights
over sovereignty” have loomed into view.
Recently, the “International Commission on Intervention and State

Sovereignty” reconsidered the meaning of state sovereignty in terms of the new
perspective. The report of the commission adds a new meaning – “sovereignty as
responsibility” to the long-held “sovereignty as a right”. Essentially, the report states
that if some states face dislocation or behave irresponsibly and endanger their people,
it is the responsibility of the international community to intervene.
In accordance with the principle of “human rights over sovereignty,” the United
Nations have imposed sanctions against, or taken military peacekeeping operations in,
South Africa, Iraq, Cambodia, East Timor, and Afghanistan, and NATO exercised
“humanitarian intervention” in Bosnia-Herzegovina and Yugoslavia. Similar acts
would be the intervention of the Organization of American States in Haiti, the
interventions of the African Union in Sierra Leone, Liberia, Burundi and elsewhere,
and the invasion of Iraq by the United States and its “reluctant allies”. Due to the
existence of dissent of the international community to “human rights over
sovereignty,” the means and legalities of “humanitarian intervention” vary. Kofi Annan
proclaims, “Neither of these precedents is satisfactory as a model for the new
millennium. Just as we have learnt that the world cannot stand aside when gross and
systematic violations of human rights are taking place, we have also learnt that, if it is
to enjoy the sustained support of the world’s peoples, intervention must be based on
legitimate and universal principles. We need to better adapt our international system to
a world with new actors, new responsibilities, and new possibilities for peace and
49
progress.” This requires the renewal of the notions of international justice and the
reform of the international law system.
The realization of international justice: system and strength
The realization of justice requires the guarantee of the system; the

implementation of the system requires strength to back it up. A government following
the constitution and legal system is the institutional guarantee of domestic justice, and
an international organization acting as government of the world is the institutional
guarantee of international justice. When proposing new conceptions of international
justice, both Wilson and Roosevelt formulated new international systems and new
world orders, which were not fully carried out due to various reasons, among which,
the faultiness of the system itself, and the absence of powerful backing behind the
system and the political determination to put this strength to use.
In “The Fourteen Points,” Wilson proposed that, “A general association of

nations must be formed under specific covenants for the purpose of affording mutual
guarantees of political independence and territorial integrity to great and small states
alike.” Due to the refusal of the Senate to ratify Peace Treaty of Versailles, the initiator
and designer of the League of Nations failed to become one of its members. Brierley
among others observed, the weakness of the League of Nations did not lie in any legal
defects of the covenant, but that once a challenge occurred, doubts over whether the
big powers of the League would fight the invader with military force. Or, whether they
were capable of doing so without the involvement of the United States. And an
effective system of security relied on the absolute advantage of the military forces.
Due to the absence of the United States, the League of Nations was incapable of
stopping the crimes of, first, Japan, and then, Italy and Germany, which caused the
outbreak of the Second World War.
“United Nations” was a term conceived by President Roosevelt. On January 1,

1942, representatives from the United States, the Soviet Union, Great Britain, China,
and others signed the United Nations Declaration in Washington, proclaiming to take
the principles of the Atlantic Charter as the common guideline of the allies. At the
conference in San Francisco from April to June 1945, representatives from 50 states,
based on the Dumbarton Oaks draft formulated by the United States, Great Britain, the
Soviet Union and China, worked out and signed the United Nations Charter. Like the
League of Nations, the establishment of the United Nations was to accomplish two
major tasks: to maintain peace and security, and properly deal with international
problems.
The fall of the Berlin Wall marked the ultimate victory of the United States. The
Charter of Paris for a New Europe signed at the Summit Conference on Security and
50
Cooperation in Europe in 1990 claimed that, freedom, democracy, multiparty systems,

private ownership and others must be adopted as universal principles, and a “whole
free new Europe” would be a “model” for the new world order. In September of the
same year, President Bush proposed to establish a new world order. He said: “it is a
big idea - a new world order, where diverse nations are drawn together in common
cause to achieve the universal aspirations of mankind: peace and security, freedom,
and the rule of law.” With the end of the 100-hour ground battle in the Persian War,
however, the progression in establishing a new world came to a sudden halt. Saddam
Hussein, who started the invasion, had not received the deserved punishment, while
Bush became his target of assassination. The end of the Cold War left a political
vacuum in the world, which bin Laden and his comrades would steal into to create
the “new world order” when the United States and its allies were too slack to shape the
new world order of freedom and democracy. They undertook worldwide recruiting and
unscrupulously extended evil’s talons into New York, Moscow, New Delhi and Bali
Island.
Once I pointed out that, as the sole super power, whether the United States
succeeds in the war against terrorism and beyond to create a new world order, the main
barriers are not the insidious and cruel terrorists, nor the Janus-faced allies, but rather
the deeply rooted isolationism and unilateralism in the United States. Now,
governments of other nations have to make a choice: is global governance of the new
world order desirable or not. Do the advantages outweigh the disadvantages? Should
Americans be encouraged to shake off their isolationist tendency and assume the
important task of global governance by offering money and power, or should we set up
barriers to make Americans become impatient and retreat from cosmopolitanism into
Americanism? In the worldwide debate over the Iraq crisis, those nations that have
held long-term special partnerships with the United States, like Great Britain and
Australia; those Western European nations where center and right-wing political
parties were then in power, Spain, Italy, Portugal, Denmark and others; those Eastern
European nations recently unshackled from despotism, like Poland, the Czech
Republic, Hungary, Albania and others; and American allies around China, like Japan,
South Korea, Philippine, Singapore as well as the Taiwan authority adopted the former
stance. They supported the United States’ playing the leading role in the establishment
of the new world order, and as for themselves, they would like to do as they could,
willing to give what help their capabilities allowed them. Meanwhile France, Germany
and Russia adopted the latter stance, desiring to offset and weaken US hegemony to
enable themselves to stand on an equal footing. In the media argument prior to the
breakout of the Iraqi War, the latter seemed to have gained the upper hand and the US
and its British Allies did not gain the authorization of the Security Council of the
United Nations. When the Iraq War was coming to an end, seeing that Iraqis were
welcoming the overthrow of Saddam’s regime, the party of France, Germany and
Russia seemed to have been thrown on the disadvantage and the media and statesmen
are seriously reconsidering their attitudes and positions.
51
United States military expenditures are tantamount to the sum of that of all
other great powers. It alone possesses super aircraft carriers, stealth aircraft, the
capability of global bombardment and force projection, and means of network-centric
warfare. What France, Germany and Russia did could but lead to the following three
possibilities: first, a new ideological cold war would be launched, resulting in tumults,
dislocation and reorganization of the world structure. Second, the old world order
would be maintained, with each state clamoring for human rights, peace and
development, but in fact each would go his own way and do as it pleased; the
international community did nothing about the genocides and atrocities taking place in
Rwanda and Indonesia. Third, the wishful thinking of France, Germany and Russia
amounts to wanting to make free decisions, with the US carrying the load. Germany
did this with the Yugoslavia issue, recognizing Slovenia before others and igniting the
fuse of the Balkan Peninsula, while the United States had to come to clear up the mess.
Americans may do so once or twice, but it will not do to make it routine, unless all
Americans are fools. The ultimate consequence is that the United States retreats into
the shell of isolationism and unilateralism, and the prospect of a new world order
becomes nothing but a dream.
China, standing between United States-Great Britain-Japan and

France-Germany- Russia, wisely played it safe. From a long-range perspective, only
China can challenge US leadership in the world. Within 50 to 80 years, China’s
national strength is likely to grow to that of the United States. At that time, will China
act as a substitute for the United States and become the main contributor to global
governance, or bandwagon on the US-dominated international system? Historically,
the United States became the largest economic country at the end of the 19th century.
In the subsequent half-century, however, it went on hitchhiking in the
Britain-dominated international system and had little interest in assuming the heavy
load of leading the world. By the second half of the 21st century, China will be
different from the United States in the first half of the 20th century. Even if China’s
national income and financial revenue exceed that of the United States, the share of
each person is still less than one fifth of that of an American. If it is said that China has
generally completed the transformation of its international role—from rebel and
revolutionist to participator and reformer—the Chinese should also be clearly aware
that, all through the 20th century, China did not possess the strength to dominate the
international system, let alone to kick off the United States and its global allies and act
as the “lone ranger” to maintain international justice.
The world order and international democracy
The world order and international system contain three levels: the first is
international peace and security, the second international freedom and the third
international democracy.
52
Peace and security are the essential conditions of any world order, if it is to be
an order. The maintenance of historical empires was due to a certain degree to their
satisfaction of peoples’ demands for security; this, however, was a security at the cost
of dignity and equality. During the Cold War, among the nuclear powers, peace and
security in confrontation had also been maintained—a temporary peace under the
threat of nuclear destruction. The peace in the new world order is a peace of justice,
with dignity and not fear; it is a universal peace, with neither nuclear war nor partial
war, with peace among big powers as well as among small states, with both
international and domestic peace. It is an eternal peace instead of the temporary
serenity between wars. It is a peace with low cost, and each state may reduce its forces
and arms to the minimum, until an international police force alone is left.
Peace can be realized under the circumstance of self-seclusion, and also through
mutual exchanges of each other’s needs and free communications. The latter obviously
is a higher level of world order. The central goal of the United States in diplomatic
policy since its founding had been to guarantee the freedom of navigation on the open
seas. The freedom that the new world order requires is much broader, including
freedom of trade, capital flow, information and finally the freedom of international
migration. This freedom is an equal and mutually beneficial freedom to both big
powers and small states, strong nations and weak ones.
International democracy is the supreme ambit of the world order. An

international- wide constitutionalism first should be demonstrated by its respect and
implementation to the letter of the UN Charter, Universal Declaration of Human
Rights and other human rights pacts. A regime that does not respect its own citizens is
not at all qualified to be a member of the international family, and much less qualified
to talk about international democracy. Fundamental human rights and citizens’
freedoms are not only the basis of domestic democracy, but also the prerequisite of
global democracy. The subject of global democracy is the citizen of the world rather
than the government of each nation. The international legal system requires not only a
further improvement of the present system of international laws and the establishment
of a just international judicial institution, but also an effective mechanism to enforce
the laws. Due to the serious impediment of the voting mechanism of the UN Security
Council in the implementation of “collective sanctions”, the present world structure is
far from the realization of the international legal system.
It is quite natural that the United Nations as well as the Security Council is to
guarantee international justice and carry out international democracy, which is also the
most favorable institutional arrangement for China. The present mechanism of the
United Nations is likely to become another League of Nations due to its incapacity of
effective operation. “Two strategic alternatives are before the developed nations to
realize the integration of the world. The idealist approach is to reform the United
Nations and advance the synchronous progress of integration in the global range; a
53
more realistic approach is to accelerate the progress of integration in a small range,

around which forms the close core of the prospective world community, and then to
absorb the reluctant developing nations into it. Due to developing countries’ worries
and lukewarm attitudes to global integration, the second approach is gaining the upper
hand in the developed countries.” For example, the G8 is to be expanded to replace the
functions of the United Nations. The divergent opinions of the developed countries
before the Iraqi War led the United States’ organization of the “reluctant allies,” which
had further nudged the United Nations to the periphery. To rally the forces and become
the carrier of the international democracy, the United Nations has two roads in front of
it: either to restore the principle of unanimous powers as the founders had expected, or
reform the Security Council.
For big powers to be unanimous, a change in their conceptions is needed, while

the reform of the Security Council is an organizational reform. Comparatively, the
former is easier than the latter. At the same time, great power unanimity is also the
necessary prerequisite to reforming the Security Council. In terms of China’s national
interests, the conceptive change should be the top priority. Since the time of Mao
Zedong, China’s diplomatic conception has been changing, orienting towards
globalization, and now a few more final steps should be taken towards the decided
direction. A series of new moves that China has taken since the end of the Iraqi War,
such as the change of attitude toward joining the G8 and adjustment in position to
solve the issue of North Korea, clearly shows changes in China’s diplomatic
conception and even the tendency of “diplomatic revolution,” as Yin Shihong stated.
If the voting right of each UN member is determined in light of the weight

based on population and contribution, the UN General Assembly will be changed from
an international forum to a quasi-parliamentary organization with functions of fund
raising and legislature. If, following the model of the Council of Europe, the voting
right is determined entirely in light of population (in the early stage it may not be equal
for every one, but the voting right decreases proportionally with the increase of
population), the UN General Assembly, then, will become a “world congress,” as Li
Dazhao called it. As the country with the largest population, China’s contribution to
the United Nations will increase, corresponding with the enhancement of its national
strength. So, China has the least reason to doubt and oppose this developing tendency,
but rather, should actively promote and support reform.
The United Nations holds that China should fully accept the authority of the
International Court of Justice. China has never accepted its compulsory jurisdiction
before, nor submitted any dispute to it, and taken a conservative attitude to choosing it
as a dispute-settling organization in multilateral international pacts. In the Chemical
Weapons Convention that China recently entered, however, it agreed to the article in
the convention that the International Court of Justice is chosen as the organization to
settle international disputes.
54
This is the turning point from suspicion and resistance to trust and acceptance.
The reform of the International Court of Justice is endowing it with universal and
compulsory jurisdiction. Once the reform has completed, the Kashmir dispute between
India and Pakistan, the Diaoyu Island dispute between China and Japan and others can
all be settled through judicial means.
In July of 1998 the “United Nations Diplomatic Conference of Plenipotentiaries

on the Establishment of an International Criminal Court” held in Rome passed the
Statute of the International Criminal Court. It is of the utmost importance to perfect
the system of the International Criminal Court, and that the United States and China,
the two world powers on the 21st century, sign and ratify it. The litigants of the
International Criminal Court are limited to sovereign states, and the lawsuit objects are
only limited to individuals. To fill the gaps in the international legal system, the United
Nations should establish the international human rights court that allows natural
persons to bring an accusation against sovereign states.
The founders of the United Nations had expected that the Security Council
should act as the “international police.” On the founding of the United Nations, the
Cold War between powers began, and thus, the military staff committee had not been
established. It is an ardent hope that through great power unanimity, the Military Staff
Committee consisting of the Chiefs of Staff of the permanent members of the Security
Council or their representatives will be established as soon as possible. In the early
stage, the military staff committee should be strategically in charge of the united
forces’ “contingents for combined international enforcement action”. The next step is
to establish a permanent international police force and permanent headquarters to
command this force.
The precondition to establishing the “administrative institution of the world” is

the establishment of worldwide public finance. To develop towards the “united
government of the world,” the United Nations must establish financial budgets of its
own just as the European Union has. To become the “government of the world”
through the establishment of public finance, the United Nations first has to reform the
UN General Assembly into “the congress of the world.”
Two possibilities lie in the developing trend of world structure after the Iraqi
War. One is more intense struggle: unilateralism confronts multi-polarity, and the
northern countries stand against the southern countries. The other is the reinforcement
of cooperation. Great Power unanimity is reached and global governance begins. In
my idea, the latter will eventually gain the upper hand. For this is the need of the world
and the increasingly deepening integration of the global economy demands the
coordination and guarantee of the integration of global politics.
55
CHINA-AMERICA THE GREAT GAME SINO-RUSSIAN RELATIONS:
WHERE DO WE GO FROM HERE?
SINO-RUSSIAN RELATIONS:
WHERE DO WE GO FROM HERE? by Wang SIRUI
The ambiguous legacy of the Cold War. Does the present geopolitical situation suggest
possibilities for conflict or a converging of interests? The necessary conditions for a
solid economic partnership. Great power cooperation as the key to the new world
order.
R elations between China and Russia are very
unusual. China had signed treaties with regard to commerce and religion well before it
established official relations with European and American powers overseas. When
Tsarist Russia was looting a burning house to seize vast stretches of territory in
Northeast and Northwest China, the Qing royal government even invited the wolf into
its house to compete with Japan. When Soviet Russia occupied Mongolia, it captured
Chinese intellectuals’ minds through a vain promise to abolish unequal treaties,
becoming the supporter and the true master of Kuomintang (KMT) and the Communist
Party of China (CPC).
After China abolished all unequal treaties with Western great powers during the
Second World War and became one of the “four great powers” in the world, it twice
signed new unequal treaties with the Soviet Union. Even the proud and arrogant Mao
Zedong had to accept the secret Supplement Agreement of Sino-Soviet Treaty of
Friendship, Alliance and Mutual Assistance. Among other things, it provided that in
Northeast China and Xinjiang, “China should not give any foreigners the right of
concession, and would not allow the capitals or citizens of third parties to take part in
the activities of industry, finance, commerce and other enterprises, departments,
societies or organizations in direct or indirect forms”.1 Namely, China acknowledged
that the above areas were the orbits of the Soviet Union. While Soviet threats to
perform “surgical operations” on China with nuclear weapons were still fresh in their
compatriots’ memories, many in power still felt bitter about the breakup of their
powerful neighbor. When Chinese diplomatic authorities were frequently protesting on
account of Sino-Japan’s Diaoyu Island disputes and Sino-Vietnam’s South China Sea
Islands’ disputes, nevertheless, they said nothing of the fact that the local government
1
Ref: Pei Jianzhang, editor in chief: Diplomatic History of the PRC (1949-1956), Beijing, World
Knowledge Press, 1994 version, pp25.
56
of the far East region of Russia refused to implement the Agreement on the East
Section of Sino-Soviet National Boundaries. In the face of the odd facts in the history
of Sino-Russian relationships, naturally it is difficult to have any certainty of the future
of relations between the two countries. Could the two biggest countries in Eurasia
reproduce their good old days?
1. The 1950’s were the honeymoon period of Sino-Russian (Sino-Soviet) relations.

The Soviet Union was both the bridegroom and protector, with China the bride and
protégé. There was once an omni bearing relation between the two sides: both the
comrade relation in the ideological sphere and the comrade-in-arms relation of military
alliance as well as the cooperative partner relations in the economic community.
The CPC was once a branch of the Third International. At the same time, the
leader of the Third International was also a principal of a functional department of the
Soviet party and government system. According to the research of Yang Kuisong, from
the founding of the CPC to the early 1930s, the funds mainly depended upon the Third
International. The appropriate funds continued until the declaration to disband the
Third International.2 In this instance, the CPC ideologically followed in the footsteps
of the Soviet Communist Party (CPSU). In his own works, Mao Zedong often quoted
the words of Lenin and Stalin. When making major policies, he would send telegraphs
to Stalin for approval. In July of 1949, Liu Shaoqi led a delegation of the Central
Committee of the CPC to visit Moscow, making clear their will to side with the
socialist camp and the Soviet Union. After the founding of the CPC political power,
the diplomatic head Zhou Enlai said upon assuming office that it was first necessary to
divide camps and distinguish friend from foe in order to open up a diplomatic
battlefront. “In our camp, …the commander in chief is the Soviet Union”. After the
death of Stalin, Mao Zedong still insisted at the Moscow conference of 1957 that the
Soviet Communist Party should head the international communist movement and the
socialist camp
The Sino-Soviet Treaty of Friendship, Alliance and Mutual Assistance, signed
in 1950, was above all a treaty of military alliance. There were three major joint
military operations between China and the Soviet Union in the early 1950’s. The first
was in Xinjiang, the second in East China and the third in Korea.
On Aug. 26, 1949, the first Field Army (YIYE) of the PLA led by Peng Dehuai
liberated Lanzhou. But Lanzhou is nearly 2000 km away from Urumchi. YIYE lacked
necessary transportation when marching toward Xinjiang in winter. At the request of
Mao Zedong, Stalin decided to send transport planes to carry the units of YIYE to
Xinjiang. The specific plan was as follows: firstly, the units set out toward Jiuquan
while at the same time, 45 Li-2’s of the Soviet Aviation Company hired by the Chinese
2
Yang Kuisong: Review of Finance Assistance Supplied to the CPC by Comintern, published in
Shijiazhuang: Social Science Tribune, No.4 (A) of 2004.
57
side transported these units from Jiuquan airfield to Hami and Urumchi. From Nov. 4,
1949, these planes flew a total of 1,033 sorties and transported 12,446 officers and
soldiers as well as their weapons and equipments. This airlift was unprecedented in the
history of the Chinese army and also the only one in the history of Sino-Soviet military
relations.
The second Sino-Soviet military cooperation began in East China at the
beginning of 1950. As the PLA was unable to defend against the KMT AF bombing of
the southeast coastal cities, especially Shanghai, the CPC demanded the Soviet Union
to give a hand. On March 13, a combined air group led by Lt. Gen Bachitschi entered
and was stationed in the airfields of Shanghai, Xuzhou and others in East China. This
air defense unit consisted of 2 pursuit airplane regiments, 1 mixed aviation regiment, 1
searchlight regiment and 1 radar battalion, including 120 fighters, 12 radars and 72
searchlights. From March 20 to May 11, the Soviet Mig-15 fighters based in Xuzhou
Airfield took off 4 times to intercept the KMT Air Force, shooting down 6 bombers,
relieving the threat of air strike upon Shanghai at one fell swoop. The second batch of
the Soviet AF, Belov Division, was deployed in Northeast China in Aug 1950 to
undertake the task of air defense. Later the equipments of this unit were transferred to
the Chinese AF, including 122 Mig-12 jet fighters, 16 trainers and communication
airplanes, totaling 139 planes. From Oct to Dec of the same year, another 13 Soviet
aviation divisions, including 9 Mig-15 and Mig-9 jet fighter plane divisions, 1 La-9
fighter plane division, 2 Il-10 attack airplane divisions and 1 Tu-2 bomber division
arrived separately in the regions of Northeast China, North China, East China and
Middle South China to assist and undertake the air defense tasks in the above regions
and were responsible for the training of the Chinese AF units. From July of 1951, these
Soviet AF units began to return home in succession. At that time, the Chinese AF took
over the equipment of 12 divisions of these units.
The third military cooperation between China and the Soviet Union was during
the Korean War. On Nov 1, 1950, Soviet airplanes appeared over Korea for the first
time. The air battles of the Korean War were mostly undertaken by the Soviet AF. Lt
Gen Lobov was appointed the commander of the 64th Air Group Army in command of
all Soviet AF units in the Korean War. During the whole period of the Korean War, 12
Soviet air divisions were successively thrown into air battles. The total number of the
rotating Soviet AF was 72,000. In 1952, the number of AF personnel reached
25,000-26,000. The fighters of the Soviet AF shot down 1,097 enemy planes altogether.
Anti-aircraft artillery units brought down 212 enemy planes. According to statistics
from the files of the General Staff of the Russian Federation Armed Forces, the Soviet
AF lost 335 planes and 120 pilots in Korea. During this war, the Soviets lost 299
servicemen in all.3
During the whole of the 1950’s, the Soviet Union supplied large quantities of
3
Recalled by Wang Yazhi, Edit by Shen Zhihua and Li Dan: Review and Consideration of Some
Problems in 1950s’ Sino-Soviet Military Relations.
58
weapons and equipment to the CPC, partly paid and partly gratis. After Mao Zedong
told Khrushchev that “we are interested in atomic energy and nuclear weapons” during
their meeting of Oct 3, 1954, both countries signed agreements of cooperative
exploitation of uranium mines and for Soviet assistance in helping China construct its
nuclear industry, in succession. In 1957, China and the Soviet Union signed a new
defense technology agreement. The Soviet side agreed to provide China with the data
and models to produce nuclear weapons and the means of delivery. It also provided 2
short range surface to surface missiles as samples.
Although China was not an official member of the Council of Mutual Economic
Assistance (CMEA), it had merged into the international economic division system
with the Soviet Union at the core in the 1950’s. At that time, most of China’s foreign
trade was done with countries in the socialist camp. During China’s first “five-year
plan”, 156 key projects aided by the Soviet Union (and Eastern European countries)
constituted the framework of the basic construction of China’s modern industries,
including nuclear, airplane manufacture, automobile manufacture, heavy machinery
manufacture, electronics, petroleum chemical, etc. The Soviet Union sent its expert
counselors to all industry departments and institutions of China. They helped to
introduce, design and constitute a whole economic structure and policies as well as
laws and regulations. Although Mao Zedong had the intention of working out China’s
own system (for example, replacing the “Charter of Magang” with the “Charter of the
Anshan Iron and Steel Company.”), China’s economic system was still patterned after
that of the Soviet Union until its collapse.
From the 1960’s booklet “Long Live Leninism” to the “nine comments” in
1963 and 1964, Mao Zedong thoroughly broke with the official ideology of the Soviet
Communist Party represented by Khrushchev and Brezhnev through the international
anti-revisionist struggle. After Mao Zedong refused the proposals of co-establishing
long wave radios and a joint fleet with the Soviets and Khrushchev called the shelling
of Jinmen military adventurism in the thermonuclear age and refused to provide
sample atomic bombs, the Sino-Soviet military alliance and military cooperation were
terminated. A few years later, relations between the two sides deteriorated so badly that
both deployed millions of troops along the border and were even at war with each
other at some sections of the border. After Soviet experts withdrew from China, China
began to turn to West Europe and Japan to seek new trade and economic cooperation
partners. If China and Russia want to reproduce their good old days to resume the
relations of 1950’s, are there possibilities under new historic conditions?
2. After the 12th National Congress of the CPC, China has gradually changed the
“one-line” strategy from Mao Zedong’s late years, “which is to make a cross line, that
is, America, Japan, China, Pakistan, Iran, Turkey and Europe” should unite against the
Soviet Union and its allies. In May of 1989, Gorbachev visited China and held a
summit meeting with Deng Xiaoping. The two parties of China and the Soviet Union
declared their intention to “end the past and open up the future”. This should have
been the symbol that the parties in power of the two big communist countries had
59
begun to restore ideological relations. However, the students that were fasting in
Tian’anmen Square obstructed the planned official welcoming ceremony, symbolizing
the coming of the new times of “post-communism”.
In August of 1991, Russian Foreign Minister Andri Kechilev made clear the
new official Russian stance, at a gathering celebrating the frustration of the coup in
Moscow, that democratic Russia, America and other western democratic countries
were natural allies just as they were the natural enemies of totalitarian USSR. He
explained that based on this political idea, the actual diplomatic policy of Russia was
to set up friendly relations with “civilization including NATO, UN and other
international organizations”.4
After the short honeymoon with western countries, Russia started to reemploy
its “double-headed eagle” diplomatic strategy. Sino-Russian relations advanced once
more. On Jan 17, 1994, the famous pro-Western Foreign Minister Kechilev made a
speech at the Chinese People’s Institute of Foreign Affairs that “we are starting once
more to explore the development of relations with all Asian countries in many ways.
This is related to our great Oriental neighbor China. After suffering from the
ideological friendship filled with frustrations to the unreasonable painful setbacks with
hostilities without leaving leeway, Russia and China, the two large civilized
‘continents’, are firmly stepping on the road towards good relations of neighborhood
and cooperation. In setting forth Russian diplomatic polices, we believe that the
good-neighborly relations with the People’s Republic of China have strategic
significance”.5
In April 1997, the heads of the two states, China and Russia, signed the Joint
Statement on World Multi-polarization and Setting-up New International Order,
emphasizing the principles that each state selects on its own the road of development,
the principles of opposing those seeking hegemony and power politics, and the
principles of opposing the abuse of economic sanctions, and making clear the goal of
mutual cooperation and the endeavor of both sides to promote the development world
multi-polarization and the establishment of the new, fair and rational international
order.” Opposing hegemony and the tendency of uni-polarization is of course a
frequent mode of expressing anti-Americanism in the diplomatic field. Will
anti-Americanism become the foundation of a new ideological comradeship between
China and Russia? It is quite unlikely, due to both internal and external factors.
Both Chechen nationalists and Russian nationalists are anti-American. But this
did not stop the outbreak of bloody wars between them. Both Pan-Turkism and
Great-Hanism are also anti-American. But this did not prevent terrorism of the East
Turkists against the Hans.
Furthermore, there are forces strongly against anti-Americanism and
4
Andri Kechilev, Preobrazhenie, Moscow: International Relations Press, 1995.
5
Andri Kechilev, To Asian Security System through “Asian” Road, published in Moscow: Segdnia, Feb
4, 1994.
60
ultra-nationalism inside both China and Russia. In Russia, ever since Peter the Great,
Europeanism (Westernism and Cosmopolitism) and Eurasianism (Orientism and
Slavism) have been the principal axis in the tussles of ideologies and the contests of
politics. In China, the recent brick sales of the idea of “peaceful rise” is a sign that the
anti-Americanism consciously promoted by the government has begun to ebb. From
the long-term point of view, whether in China or in Russia, democratization has more
potential and stamina than Anti-Americanism and Social Darwinism. Now the two
countries are approaching the mainstream of world civilization. We cannot tell whether
any anti-mainstream ideology will become the ideological tie linking the two
countries.
3. In general, since 1992, political relations between China and Russia have gone
through three development phases: “regarding each other as friendly countries”;
“constructive partnership”; and “strategic cooperative partnership”. In July 2001, both
countries signed the Treaty of Good-Neighborliness and Friendly Cooperation
Between the People's Republic of China and the Russian Federation for a period of 20
years. The treaty advocated that “ever-lasting peace and friendship prevail” on both
sides. But the treaty once again emphasized that it was “non-aligned and not directed
at third countries” declared in the series of documents signed by the state heads of
China and Russia. The treaty did not constitute a formal alliance. Neither party has any
obligation to defend the other party, as was declared in the Treaty of Sino-Soviet
Friendship and Alliance signed by the Jiang Kaishik government and the Kremlin or
the Soviet-China Friendship, Alliance and Mutual Assistance Treaty signed by the
CPC and Moscow in 1950.
The precondition to establishing a military alliance is that both sides have
common strong enemies or opponents, but China and Russia do not. The primary
opponents of China are the Taiwan authorities and its potential supporters America and
Japan. Secondary are the “East Turks” and their radical Islamic forces. Third are India,
Vietnam and other ASEAN countries that have territory disputes to be resolved. The
primary opponents of Russia are Chechen separatist powers and their radical Islamic
forces. Secondary is a US-led NATO that is continuously expanding eastward. Third
are Japan and China, which have both potential and actual territorial disputes.
The visible common foes of both countries are the radical forces of Islamic
fundamentalism in the “arc terrain”. The military cooperation system of the Shanghai
Cooperation Organization is firstly directed at this foe. But after 9-11, American
military forces quickly came into Middle Asia and the Caucasus regions. The Shanghai
Cooperation Organization was part of the global anti-terrorism alliance headed by
USA and did not have the option of evolving into a paramilitary alliance focusing on
America as the imaginary enemy.
Although Russia and America are still possess strategic nuclear weapons, the
possibility that Russia and America would engage in military confrontation is slim to
nonexistent. On November 13, 2001, the joint statement of the state heads of Russia
and America announced that “Russia and America have overcome the remains of the
61
cold war. Neither party will regard the other as an enemy or the source of threats.”6
Russia and China made an alliance against America for the same reason that China and
America did against the Soviet Union. It will play the China card to take the
advantages of its relatively favorable status in the triangle of America, China and
Russia. Yeltsin made it very clear that “from the point of view of global politics, our
relations with China are very important. We can have dealings with the West on the
strength of China so the West can respect Russia a bit.”7 Playing the China card can
improve Russia’s status as a big power as well as granting it access to larger markets
for arms and other products in China. Why not go ahead with it? As there are unity and
independence problems in Taiwan, there is a much greater possibility that China and
America will shape the military confrontation while Russia does not have any actual
interests there. Even while the two countries were still allies, Mao Zedong could not
persuade Khrushchev to support his attacking Jinmen. We would thank God if now we
could stop Russia from selling weapons to Taiwan.
India and Vietnam are long-term allies of Russia. Obviously in their territorial
disputes with China, Russia could not give up its old allies and is partial to China. In
fact, although China and India ranked as the top two buyers of military equipment
from Russia, the types and performance of the weapons and equipment Russia
exported to India exceeded that sent to China.
China no longer regards Russia as its potential opponent, but China remains on
the list of potential opponents of Russia. “The idea of China Threat” and “the Theory
of China expansion” found a considerable market in Russian civil and military circles
and the media. Professor Dukin of Military University of Russian General Chief of
Staff of the Armed Forces published a book called “Basic Geopolitics”. Talking of
Russia-China relations, Dukin believed that at present both sides still had the value of
mutual use. But China is always the potential enemy of Russia. The modernization of
the Chinese army will pose the largest and most direct threat to Russia during the mid
and long term (five to 10 years). Therefore, Russia must maintain military superiority
of about a 10-year period over China. This means that Russia will never send the best
equipment to China. The former Defense Minister of Russia, Grachov, stated that
“China threatens the safety of the far East areas”.8 Another former Defense Minister,
Lochionov, called China “the main potential enemy of Russia” many times.9
At present, one of the main goals of the CPC in maintaining friendly relations
with Russia is to obtain modern weaponry for tackling the Taiwan problem. But the
6
Russian Tass, Washington, English news, Nov 13, 2001.
7
Quoted in Russia-China Relations at the moment, E. P. Bachanov, published in the Actual Problems in
the Research of International Relations edited by the author, Vol.2, Moscow: Science Press, 2002
version, p. 419.
8
Lionid Shrirono, etc: Behind the weapons Russia sold to China, published in 3-9 military net.
9
Igel Kolouchinko: Igel Lachionov proposed to establish independent nations defense alliance treaty,
published in Moscow: Neavisimaia gazeta, Dec 26, 1996.
62
advantages of Russian weapons have fallen far behind that of America and the EU.
The models of the next generation of naval and air force equipment from the US have
been finalized in succession and put into batch production while Russia has not
accomplished the model selection and design of relevant weapons. It is even beyond
its ability to keep the existing equipment in good condition. Depending on Russian
arms, even the Chinese military has no idea of what to do to in launching an arms race
with Taiwan and its American backer. Therefore, the CPC is actively seeking to break
through the bans on EU military sales to China after June 4.
Since the 1990’s, China and Russia have united to oppose America on several
issues: opposing NATO’s eastward expansion; opposing American unilateral
abolishment of the Anti-Ballistic Missile Treaty and deployment of NMD and TMD;
opposing NATO’s military intervention in Kosovo and opposing the invasion of Iraq
by US-led coalition forces. These did not have the expected effects of containment. In
light of this, it must be asked, even if China and Russia form a new alliance, will it
really exert power in the world effectively?
4. Creating a cooperative economic partnership or community requires that two

basic conditions be met: trade in the economic community must account for more than
half of the partners’ foreign trade, and a economic division system must shape the
community. The “socialist camp” of the 1950’s and the pattern of “geese’s order” in
the 1970’s and 1980’s, Japan, Taiwan, South Korea and Southeast Asian countries
formed a virtual economic community (relative to the EC or the members of North
America Free Trade Agreement).
During the “honeymoon period” of Sino-Soviet relations, China’s trade with the
USSR (and East European countries) accounted for the majority of its foreign trade.
But now Sino-Russian trade is less than 2% of the total value of China’s foreign trade.
While Chinese foreign trade has seen sustained, stable growth in successive years, the
development of Sino-Russian trade is relatively slow and even broke down and fell
back for a time. And it has not yet approached the expectations of politicians of both
countries. Because most Chinese exports to European and American countries and
Japan are products made of materials supplied by foreign firms or the interior links of
the production process of the transnational corporations, their brands and quality are
sufficiently guaranteed. But the products China export to Russia mostly come from
“only one trade” of medium or small companies, or come from nonstandard border
trade. “Counterfeit and poor” products account for considerable proportions.
The Soviet Union of the 1950’s was the finished products exporter to China,
and also the capital and technology exporter while China was mainly an agricultural
and mine products exporter. Besides exporting weapons and equipment to China,
Russia has now become a raw material exporter. Meanwhile, China has become a
finished products exporter. China expected that Russia could become a stable source of
petroleum, natural gas, timber and other industrial raw materials. But Russia has not
given this promise yet. The recent struggles among China, Japan and Russia over a
Fareast petroleum pipeline showed that Russia and China have not become reliable
63
economic cooperative partners. Now China has the strength of capital output. But in
Russia, it lacked a proper legal environment and essential guarantee of order. So this
made it difficult to become the principal location for Chinese investors.
The ability to admit a large number of high quality human resources from all
countries in the world is a major guarantee of the sustained development of American
economy. It is an absolutely necessary condition to retain the positive increase of
Western European economy in which their population is in negative growth to bring in
young and mature workers from North Africa and Middle Eastern countries. Russia
has vast territory and abundant resources and has low population density. Its
population has now reached negative growth like Western European countries. It is a
perfect match and a wholly natural economic move to import labor forces from China,
which has an enormous population, scarce resources per capita. Nevertheless, the “idea
of a China threat” prevailing in Russia impedes the development of this cooperation.
This idea mainly has two origins. One is that China’s economy is quickly
overtaking Japan’s, and will rank second in the world while Russia’s economy has
fallen behind South Korea, ranking about 20th in the world. China’s goal is to seek the
dominant position in Pacific Asia. Russia-China economic cooperation will speed up
the realization of that goal. In the new situation, Russia would only play the role of
“younger brother” of China. This would make the former “elder brother” somewhat
dissatisfied.
The second origin is the prevailing view that “Chinese immigrants will
peacefully occupy the far East regions of Russia” (i.e. Chinese invasion). According to
“the anarchic rules of international competition” of the realist school, a rising big
power will naturally strive for more space in the markets, energy sources and
population growth regions. The weak far East region of Russia will be a primary object
of selection. Given that the far East regions of Russia was historically a dependency of
China, and considering that economic prosperity will stimulate Chinese nationalist
sentiments, the Russians feel that they have reason to be concerned about the future of
the far East regions. The Russian Minister of Construction, E. Basin, once wrote in an
official newspaper, talking of the natural precious deposits in Russia’s far East regions:
“after the exploitation of this land, the far East regions will become very wealthy. The
Chinese and Koreans quickly understood this and have occupied our far East on the
ground. It seems that they will soon announce that it will be the republic of small-eyed
people with sovereignty.”10 Though what he said is not true, the Russian anxiety that
he expressed is the reality that the Chinese have to face squarely.
5. For both China and Russia, bilateral relations between one another are not the
most important. The order of bilateral relations for China is Sino-American,
Sino-Nipponese, Sino-Russian, Sino-European and Sino-Indian. But in future years,
the importance of Sino-European and Sino-Indian relations will rank ahead of
10
E. Basin: Space and time of unified Russia, published in Moscow: Rossiiskaiagazeta, Jan 1, 1995.
64
Sino-Russian relations.
The order of bilateral relations for Russia is Russian-American,
Russian-European, Russian-Chinese, Russian-Japanese and Russian-Indian. But the
latter 3 bilateral relations are approximately on the same grade.
In terms of several groups of triangular relations that may form the new axis in
Asia-Pacific areas (China-Japan-South Korea, China-Japan-ASEAN,
China-India-ASEAN, China-Japan-India, China-Japan-Russia, China-Russia-India),
the importance of those involving China and Russia is far behind. Some in Russia and
India have strongly called for the creation of a Russia-India-China axis, but China
remains uninterested. In history, a “Chinese character cultural circle” has been formed
for a long time. First of all, to resume the deep intercommunion and close cooperation
in the circle is the common wish of the coteries. Most countries of Southeast Asia lie
within the Sino-Indian Peninsula. It satisfies the “favorable climatic, geographical and
human conditions” to reconstruct the southern Silk Road among China-India-ASEAN
countries. Among China, Japan and India, at the moment, there have been no signs
showing such cooperation. In terms of China, Japan and Russia, they maintain very
complicated relations at all times. During the Russo-Japanese War, China remained
neutral (even though most of the fighting took place on Chinese territory). During the
China-Nippon war, Russia sat on the fence (in the end, it send troops to seize the fruits
of victory). China and Russia once made an alliance to oppose the Japanese-US
Security Treaty. On the other hand, China backed Japan to ask for the return of the
northern four islands from Russia. Now, China and Japan are involved in Russia in
guaranteeing the supply of energy sources.
The treaties signed by the Chinese and Russian governments often emphasize
two issues. One is “to promote the development of multi-polarization in the world”,
and to set up a “new multipolar international order”. The other is “to strength the UN
system” and “set up a common system with the UN as the core to respond to new
challenges and threats, to safeguard international stability, security and expectable
development”.11 The politicians and diplomatic envoys of both countries did not seem
to understand that establishing a multipolar international order and strengthening the
UN system are mutually exclusive goals.
During the Cold War period of bipolar confrontation, the UNSC was basically
paralyzed. The UN General Assembly became a place of collision and performance of
two ideologies. A Russia scholar once said that the UN must be regrouped, and must
resume being a “consensus of big powers” just as expected by the founders of the UN.
Great power consensus is not only established on the basis of common interests, but
also on the basis of common values and politics or cultures. Political systems can form
solidarity and maintain it just as its members generally observe some common rules
and approve their system structures. The foundation of the system is the consensus of
11
Joint Statement of PRC and Russian Federation, published in Xinhuanet, May 28, 2003
65
procedure and the consensus of substance.12 World multi-polarization means that great
powers can not reach consensus on basic values and basic procedures of adopting
common action. In this case, the effective operation of UN system is unimaginable.
Ye Zicheng pointed out that historically-speaking, a multipolar system may
sometimes maintain world peace and stability for a considerable period of time. But in
quite a few cases, it has become the main cause of large scale wars. In the past, Russia,
like China, took an optimistic and active attitude towards multipolar development.
Now some Russian scholars have reexamined it and considered that there is no natural
link between multipolarity and Russian interests. As in their view, “most of the
potential key points in a multipolar world lie in the neighborhood of Russia or in
places not far from it. Almost every pole greatly overran Russia in many aspects, such
as in economic development, development speed or political enthusiasm. Every
geopolitical pole has its own political or economic gravitational fields. All these fields
will have negative effects on the stability of the Russian constitution because there are
so many economic problems in Russia that they have not reached a common
understanding. In this case, strictly according to the principles of mechanics and
political logic, Russia may be carved up by the poles that are more active in its
neighborhood. Therefore, the concept of multipolarity is very dangerous”.
It is necessary that China examine what multipolarity means for it as well. Does
it has more advantages or disadvantages? What are the positive and negative factors?
Ye Zicheng’s conclusion is that there is no need for China to insist on a strategy of
multipolarity, and should surpass the thinking of “polarization” and turn its sights to
great power cooperation. We should say that great powers cooperation has its objective
foundations. After 9-11, great power relations were further changed and the possibility
of great power cooperation appeared. Though the Iraq War launched by the US
destroyed this nascent process, there is the possibility that American policies will be
adjusted and the US will come back to great power cooperation. The post-war
reconstruction and the handling of the North Korean nuclear problem showed that
great power cooperation might still be realized. Therefore, the strategy of promoting
great power cooperation is more beneficial to the safeguarding of world peace and
stability than the strategy of promoting multipolar development. And it is also more
beneficial to the safeguarding of China’s national interests.13
To sum up, writer’s basic view of Sino-Russian relations is: in the general trend
of global economic and political integration, the two countries should not be “friends
only on the surface” in order to promote world multi-polarization. On the contrary,
both sides should be permanent partners and mainstays of the UN system which is
effectively operated on the basis of great power consensus and cooperation.
12
Yu Xilai: International Justice and Democracy – on the world order after Iraq War, published in
Beijing: Strategy and Management, No.5, 2003.
13
Ye Zicheng: Self-examination of the history and theory of China’s multi-polarization strategy.
66
CHINA-AMERICA
THE GREAT GAME
ANOTHER AMERICAN CENTURY?

CHINA-AMERICA THE GREAT GAME DEBT AND EMPIRE
DEBT AND EMPIRE by Martino DOLFINI
The funding of the superpower, its crisis and the possible ways of emerging from it. A
growth model based on the absorption of external resources to sustain internal
demand. The paradoxes of the superpower. The role of China and Japan and the
challenge posed by Putin.
F or the third time in little more than forty
years, the United States have been undergoing a period of fiscal expansion, carried out
aggressively by boosting military spending while at the same time lowering taxes. The
federal budget went from a surplus of approximately 235 billion dollars in 2000 to a
deficit of 413 billion dollars for financial year 2004; in terms of percentage of GDP –
which makes it easier to perceive the change of trend – it fell from approximately +2.4%
to almost –4%. As also happened during the Kennedy and Reagan presidencies, fiscal
expansion has been accompanied by a parallel worsening of the current balance of
payments deficit (BOP). In fact during the same period the balance fell from –425 to
-660 billion dollars approximately, and this took place in spite of the fact that the two
years 2000 and 2001 were affected by a net slowdown of the economy, a typical phase
during which, according to economic theory, one should expect to see an improvement
in the current account balance: on the one hand lower growth in domestic demand acts
as a spontaneous brake on the demand for imports, while on the other hand net exports
improve thanks to the progressive depreciation of the exchange rate as a result of
expansionary monetary policy. A consequence of this process is the evolution of the net
investment position with foreign countries, i.e. the difference between the assets held by
American operators abroad and the assets held by foreign operators in the United States:
this balance, which has been negative since the mid nineteen-eighties (because foreign
liabilities have been growing more and at a higher rate than assets), at the close of 2004
was in all probability in excess of 3 thousand billion dollars and only slightly less than
30% of GDP.
The two periods mentioned have in common two other aspects, which at least at
first sight may seem paradoxical. The first is that, despite the obvious worsening of
both the public sector and the external deficits – phenomena which both require the
capacity to attract capital – interest rates actually declined. The second factor is that,
in spite of the first factor, there were copious inflows of capital from overseas and, in
recent years, more capital came in than was necessary simply to finance the BOP: in
fact the United States imports capital at a rate of over 3 billion dollars a day, only half
of which are needed to finance the trade deficit and the so-called “foreign aid”
programs.
68
1. The financial balances of the principal sectors of the American economy (1960 – 2004)
(figures expressed in % of GDP)
T h e g ra p h s h o w s th e
F e d e ral G o v e rn m e n t
d e ficit ( P S B R lin e ) a n d
th e C u rre n t A c co u n t
B a la n c e .
T h e tw o lin e s m o v e o n e
a s a m irro r im a g e o f
th e o th e r: w h e n th e
p u b lic s e cto r d e ficit
ris e s , th e b ala n ce o f
p a y m e n ts w o rse n s . T h e
s e c o n d h alf o f th e
N in etie s is th e
e x ce p tio n b e c a u se in
th is c a s e it w a s e x ce s s
s p e n d in g in th e p riv a te
s e c to r th a t c a u s e d th e
e x te rn al b ala n c e to
w o rs e n .
Sourced from: W. Godley, A. Izurieta, G. Zezza, “Prospects and Policies for the U.S. Economy:
Why Net Exports Must Now Be the Motor for U.S. Growth”, Strategic Analysis August 2004, The
Levy Economic Institute.
From this brief overview we can see emerging a growth model based on the
absorption of external resources (goods and capital, commodities and sources of energy)
which serve to finance domestic demand (consumption and public spending, especially
military spending). More specifically, it seems that we can conclude that America is
financing its public spending with foreign capital, which – surprisingly – once invested
in dollar-denominated assets has not only an extremely low rate of return but a return
that is lower than that which could be obtained from most foreign markets. This
miraculous financial mechanism appears to be the defining feature of the exercise of
imperial power by America. And there is nothing new about this: at the end of the
nineteen-eighties a Soviet diplomat at the embassy in Washington confessed to an
American economist that, rather than the deployment of missiles in Europe and the
military interventionism of the Reagan presidency around the world, what actually
caused morale to plummet in Moscow was precisely the fact that, despite the rise in
military spending and the growth of the public sector deficit, interest rates had actually
fallen, enabling America to finance itself without any problem. To this observation I
would add that the reduction of fiscal pressure (enacted by Bush, as by Reagan and
Kennedy before him) is also a characteristic of the exercise of imperial power: at the
very moment when there is the maximum need to finance the public sector deficit, the
domestic channel of taxation is actually used in reverse, with the result that the burden
of financing the American public sector deficit is shifted more and more on to other
countries (with the obvious advantage that, as long as public spending and military
ventures do not affect the income and wealth of the people, they do not even become the
69
subject of discussion let alone of protest that politicians show a greater sense of
responsibility). Graphs 1, 2, and 3 show the key features of these trends.
2. The net position with foreign countries of the United States (1982 – 2008)
(historical data and forecasts based on the Levi Institute unchanged economic policies, in % of GDP)
The net position with foreign
countries (the Net Overseas Assets
line) represents the cumulative
effect over time of current account
balances and, in the case of
America, it substantially coincides
with the stock of net financial
capital from foreign countries (the
Net Financial Assets graph)
This position turned negative in the
mid Eighties and is continuing to
worsen. Forecasts indicate that
there will be a further acceleration

The distinctive features of the model
of this trend.
3. Return on investments (1982 – 2008)

(historical data and forecasts based on on the Levi Institute unchanged economic policies)
In the phase of the gradual

worsening of the net
position with foreign
countries, interest rates on
the public sector debt (the
Treasury Bill Rate line) and
the cost of the foreign debt
(the Quasi-rate on Financial
Liabilities line) have been
continually falling, although
there is expected to be a
certain degree of recovery
over the next few years.
70
The distinctive features of the model
If the paradox of high public spending financed by low-cost foreign funding is

the feature which best characterizes and distinguishes the American imperial model in
international relations, it is important to examine all the distinctive features of this
model and the means utilized to sustain it in order to understand how the current
situation came about and how sustainable it may be. There are three main features:
1. A strong concentration of power and of the utilization of resources at

government level – the so-called “Big Government”, the object of much contempt by
American rhetoric;
2. A strong concentration of economic power, mainly in the form of oligopolies,
with the resulting adoption of the double standard of protectionism for the domestic
market and the imposition of the free trade model for foreign markets;
3. A progressive “financialization” of the global economy, through the so-called
“dollarization” – an ugly but effective term – meaning the abandonment of any kind of
reference anchor for the value of the dollar and the consequent adoption of a double
standard of financial relations: as creditor towards developing countries (some of
which will never become developed) and as debtor towards developed countries. This
is the key point for explaining the paradox of imperial finance, a phenomenon known
as the “Washington Consensus”.
These three characteristics – which emerged at different times starting from the
beginning of the twentieth century – are linked: economic concentration and expansion
in foreign markets are not feasible without Big Government (in other words, military
spending is at the same time a means and an end); in the same way the enforced
acceptance of the dollar as an international means of payment not linked to any
measure of value (gold) would be out of the question without the expansion of the
public sector debt; at the same time Big Government consolidates because it appears to
be more responsible to those who finance it, in disregard of those who voted it in.
1. Big Government is perhaps the most distinctive feature: it is the first to have
developed over time, it is in clear conflict with the republican ideal on which America
was founded and it is the element which distinguishes it quite clearly from the British
imperial model. During the First World War, America was the main provider of finance
for European countries. At the end of the war Wilson was quick to seize his
opportunity and instead of following the traditional policy of cancelling the war debts
of allied countries, he consolidated the loans into a financial credit position towards
the foreign governments (not private entities or individuals) and insisted that these
debts be repaid directly by France and Britain (who were in their turn in a credit
position with Germany). Behind this position there is obviously the idea of forcing the
European empires to rein in their military spending in order to pay off their war debt,
leading them to downsize their operations to the advantage of America. This credit
71
position would be used in a firm but blind way: as well as refusing the debt triangle
including Germany, America imposed domestic tariffs on imports from Europe, thus in
practice preventing Europe from generating the dollars needed to repay its debts, and
forcing a process of deflation the result of which soon became obvious. (It is likely
that the America of the nineteen-sixties was well aware of this mistake, and that this
may have been one of the “strong” reasons which, as we shall see later, will push the
country into forcing the system).
It is in this context of financial strength at international level that military
engagement gradually enters the scene, at first in the Second World War and then
subsequently on the various cold-war fronts. Again it was Wilson who, although
elected on a non-interventionist platform, decided to enter the Great War because "the
world must be made a safe place for democracy" and launched the first measures
restricting civil liberties, which were aimed at controlling public opinion (the
Espionage Act). This domestic front of Big Government was extended by Roosevelt in
the nineteen-thirties with his protectionist policies (for example in the agricultural
sector) and his boost to public spending on infrastructure (such as the Tennessee Valley
Authority), to continue during the Sixties with Johnson’s social spending programs.
4. The highest increases in real “discretionary” items of public spending in the last 40 years
(financial years)
In the last forty years, the total

items of real “discretionary”
public spending have risen by
an average annual rate of 1.7%.
However in the last three
financial years (2002-2004),
the average annual rise in these
same items has been around
9%, lower only than the growth
recorded in the peak years of
the Vietnam war.
Sourced from: : “Bush Budget Charts” – Cato Institute, 2004
The combination of Big Government on the domestic front and on the

international front led over time to a substantial rise in public spending, a widening of
the federal deficit and a much higher level of public sector debt. On this last point it is
worth looking in greater depth at “accounting” issues, which are valid for all countries
but are even more so for the country that is home to the concept of accountability,
where magistrates and Congressmen never miss an opportunity to denounce the
malpractice of false accounting. The public sector debt normally given in domestic
72
accounts contains an accounting flaw: it is calculated using the “cash” method and not
the “actuarial” method. In the accounts of America, a correct accounting treatment of
sums already committed to public employees (and of these, sums relating to war
veterans are an important part) and to healthcare and pension programs spanning
several years would bring public sector debt up to a level equivalent to approximately
five times GDP. According to calculations made by the Congressional Budget Office
(CBO), 4,500 billion dollars are pledged to the first of these causes, 38,000 represent
the present value of healthcare commitments while 7,000 billion refer to pension
programs1. The CBO has even carried out a simulation in order to estimate the
resources needed to cover the total of these liabilities: on the hypothesis of an annual
growth rate of 3% of GDP from 2005 onwards, tax pressure would have to be
increased by 6.5% of GDP on a permanent basis. It is within such a framework that the
newly confirmed Bush administration has pledged to make permanent the tax cuts
enacted in the last three years while it is at the same time aiming to halve the fiscal
deficit by 2009 without making any specific commitments for healthcare, and is
proposing a plan for privatizing the pension system which will involve transition costs
estimated at between 1,000 and 2,000 billion dollars.
5. Trend of real “discretionary” items of public spending: defense sector and other sectors
(in billions of dollars 2000, financial years)
Surprisingly, since the Republican
Party – which is in favour of reducing
public spending – regained a majority
in the Congress (1995), total items of
discretionary spending – both military
and civil – have risen by 40% in real
terms, giving an overall increase of
approximately 250 billion dollars.
If on the one hand the social spending and healthcare programs have become
really and truly colossal in terms of prospective future debt, on the other hand it is worth
stressing that, especially in recent years, discretionary items of expense (i.e. those not
linked to automatic mechanisms but which on the contrary require an explicit vote to be
1
The Congressional Budget Office, “Measures of the U.S. Government’s fiscal position under current
law”, August 2004.
73
passed by Congress) have also risen enormously. This second group contains above all
military expenses, which have experienced massive growth over the last few years. In
order to make a correct estimate of military expense it is necessary to look at the whole
of the federal budget. In fact military expenses in the strict sense – i.e. those recorded in
the accounts of the Pentagon – in actual fact represent around 50% of total military
spending, thus giving a softer version of a harder reality. According to calculations
made by the economic historian Robert Higgs (January 2004), the items of expense of a
“military nature” recorded in the accounts of other departments should also be counted:
almost all of the so-called “foreign aid” of the Department of State – which are in actual
fact expenses for indirect military assistance to other countries (typically for the war on
drugs in Latin America); all of the accounts of the Veterans Department and the
Homeland Security Department; interest expense connected with loans entered into in
the past for military expenses. In financial year 2002 the sum of all these items gave a
total defense-related outlay of slightly below 600 billion dollars compared to the figure
of approximately 350 billion assigned directly to the Pentagon.
6. How real public spending rose in “non-defense” sectors in the first four years of each administration
(all the indexes start from a level of 100)
If we consider only the items of
discretionary expenditure other than
military expenses, the Republican
control of both the White House and
the Congress saw a rise in real
spending of over 25% during the last
four years.
On the contrary, during the first four
years of government by the previous
administrations, the same items of
expense either remained unchanged
(Clinton) or declined (Reagan).
Maintaining the same ratio and considering the extraordinary items posted for the
wars in Iraq and Afghanistan, in financial year 2004 the amount of around 400 billion
dollars recorded in the accounts of the Department of Defense becomes some 750
billion dollars, approximately 180% of the whole federal deficit and a little over 110%
of the whole foreign deficit. But that is not all: as graphs 4, 5 and 6 show, discretionary
non-defense outlays began to accelerate in 1995 (the year in which the Republican Party
returned to a majority in Congress), and then moved sharply higher again in the period
when the Republicans held the White House as well as a majority in Congress. In the
last three years the items of discretionary spending have risen in real terms by
74
approximately 9% per annum compared to an average of just below 2% recorded over

the last forty years.
Alongside this trend, other phenomena which help to define Big Government
more clearly have emerged, or rather have re-emerged. First of all there has been a
growing concentration of power, with a consequent gradual shift of the balance of
power from the legislature in favour of the executive. One example is the continual
recourse to emergency appropriations, a measure used typically to increase military
spending on the grounds that military commitments are evolving in an unexpected or
prolonged way; the war in Kosovo, the war on terrorism and the war in Iraq were or
have been financed for more than 50% using these exceptional instruments (to
understand the proportions, the request for an appropriation of 87 billion dollars, made
in September 2003 for the war in Iraq, was the highest ever made since the early
months of the Second World War).
A second phenomenon is the gradual weakening of the political representation

of the electorate – this point will be returned to later. Civil liberties and criticism are
suppressed more frequently: the two laws known as the Patriot Acts are an example for
everyone. These Acts in practice reduce or sometimes even annul the constitutional
rights and guarantees of citizens. Lastly, but not in order of importance, there has been
an alignment of the media, which means that propaganda is being put out. A striking
example of the latter phenomenon is given in a study published by the Kennedy
School of Government (Harvard) 2 , which, among other things, describes how a
meeting is held each month in Washington of representatives of the most important
national media, of government, of Congress and of the secret services, in order to
determine the margin of manoeuvre on information to be published, i.e. “what and
how much”. By no means extraneous to this topic – in the sense that it does in any
case help avoid useful information regarding the action of the executive being the
subject of debate and possibly of criticism – is the ever more frequent recourse to
secrecy for government documents, on the justification that national security could
otherwise be put in jeopardy: in 2003 14 million documents were classified as secret
compared with 11 in 2002 and 8 in 2001 – numbers which alone help to demonstrate
clearly the dimension of Big Government. This latter phenomenon risks, among other
things, being an explosive one: as more and more resources are allocated to external
objectives (military expenditure) the greater need there is for propaganda to justify
them (on this point, the events of the Iraq war seem to me to be an eloquent example)
and for censorship to keep critical voices at bay.
In conclusion, public spending continues to grow independently of which party
is in power (Democrats or Republicans), channelling domestic resources not towards
domestic growth objectives (social, education, aid or whatever) but more and more
towards an external commitment, often of the military kind (unproductive spending),
assisted in this by the growing concentration of power in the hands of the executive.
2
J. Nelson, “U.S. Government secrecy and the current crackdown on leaks”, The Joan Shorenstein
Center on the Press, Politics and Public Policy Working Papers Series, Fall 2002.
75
2. The second aspect, which is complementary to the first, is the progressive

concentration of economic power. It is as natural as it is understandable that a
consolidated industry tends to oppose the growth of new rival enterprises, pushing for
regulation for example, thus hindering technological innovation and in the end
generating an almost monopolistic domestic market. What is less obvious – and
surprising, given American rhetoric on the subject of “liberalization” and
“deregulation” – is state support for this phenomenon. In other words: for economic
concentration to be perpetuated in time, the support of the state is needed (and in this
way of course Big Government becomes even bigger). This point needs to be analysed
in depth.
First of all it is as interesting as it is worrying to note that the boundary between
the private sector and the public sector is gradually being eroded by the so-called
system of revolving doors, meaning the systematic coming-and-going of managers
between industry and federal agencies, if not actual ministries, which is by no means a
new phenomenon but has reached abnormal proportions under this administration.
Furthermore – and this fact is even more important in order to understand the
complexity of these forms of interdependence – oligopolistic industry is the main
source of funding of candidates to Congress, either directly or through various lobbies.
Partly thanks to a convenient redesigning of the electoral colleges aimed at “selecting”
the electorate (unbeknown to the voters), today we are witnessing a substantial freeze
on nominations to Congress: some 90% of the seats in the Chamber are not actually
open to any electoral competition, and the candidates elected can afford to vote not
according to the will of their constituents but rather according to that of those who
financed the election campaign. This fact helps to explain why in recent times,
especially on the subject of foreign policy, we have been witnessing a gradual move
towards a somewhat deceptive form of unanimity in parliamentary voting, which has
become known as “bipartisan voting”. May one example clarify this: on September 10
of last year, the Chamber passed by 406 votes to 12 a resolution linking Iraq to
terrorism and, by syllogism, to the attacks of September 11.
The foreign policy implications – and thus the implications for international
economic relations - of this feature are considerable: the corporatism of industry
combined with Big Government generates a crowding-out of private spending and a
distortion of its allocation and reduces investment opportunities on the domestic
market. Consequently the surplus production and profits generated on the domestic
market have to be channelled into foreign markets in the form of subsidized exports, as
“foreign aid” (a clear example of this is the agricultural and food surplus) or as capital
exports, both for the direct acquisition of foreign businesses, preferably in strategic
sectors such as primary goods and sources of energy (one example of the many is the
almost total privatization of the public companies managing water resources in South
America), and as foreign loans. The natural consequence is that in order to absorb
American goods and capital, the outlet markets must as little regulated as possible, in
other words it is necessary for the foreign governments to subscribe to the doctrine of
“free trade”. This can be “spontaneous” or through political proxies (such as the
dictatorships in South America in the Sixties and Seventies and those of central Asia
76
today); otherwise, but this is the last resort, where it is necessary to maintain control
over a strategic area and there is no possibility of obtaining informal control, then
there is military intervention. Either way an increase in public spending is involved:
subsidies to protected sectors, military costs to open up overseas markets and to keep
them open, costs linked to any regime-change intervention or even occupation. This
seems to me to explain in a simple way why the United States promote the “free-trade”
model and the benefits of “globalization-liberalization-deregulation”, while
maintaining a protectionist system in their own country. The double standard produces
double benefits: it enables them to export surplus supply in protected sectors while at
the same time channelling strategic resources, commodities and energy sources into
America.
3. Let us move on to the third aspect. What I have called the “financialization” of
the global economy is in fact a distortion of the international monetary system, its
transformation from a “gold standard” type of system to a “dollar standard” or a
“T-bill” standard system. The mechanism that regulated the Bretton Woods system was
similar to the gold standard, more specifically I would define it as a regulated system
of credit mechanisms, where the international means of payment (the dollar) was the
expression of an asset (gold). In a few words: a parity rate was established between
gold and the dollar (at $ 35 an ounce) and at this rate the Central Banks could freely
exchange dollars for gold. The US Treasury was committed to maintaining gold
coverage for at least 25% of all the dollars circulating internationally and foreign
currencies were pegged to the dollar at a rate that could if necessary be adjusted.
How did this mechanism work? Against a US BOP deficit, dollars were created
which ended up in the pockets of countries which on the contrary had a BOP surplus;
if the American deficits mounted up, so then did the dollars abroad and the foreign
governments had the possibility of either keeping them and reinvesting them or else
converting them into gold; this second option was the mechanism that rebalanced the
system, because when the countries with BOP and dollar surpluses felt that they had
too many dollars they would ask the American Treasury to convert them into gold.
Since stocks of gold were limited, at a certain point the US government would be
obliged to raise interest rates to curb capital outflows and to reduce public spending
until the decline in domestic demand and the level of domestic prices enabled them to
reduce and then reverse the negative balance of the BOP.
The first part of the story – the worsening of the US balance of payments and
the resulting creation of dollars – is what happened during the nineteen-fifties, when
the item of public spending driving the deficit with foreign countries was military
spending. What actually changed in reality compared to the original intention
constituted the sequel to the story: not only did America not raise interest rates to keep
the outflow of gold in check, but - under Kennedy – it actually increased military
spending and reduced fiscal pressure (and then with Johnson it increased welfare
spending with the creation of the Medicare and Medicaid programs). In fact with the
election of Kennedy the first tensions arose in the monetary system and gold at a
certain point was changing hands at $ 40 an ounce; in 1964 the stock of dollars held by
77
foreign Central Banks was almost as great as the stock of gold held by the US Treasury,
and France and Germany were beginning to convert their dollars into gold
systematically. The crucial point was that the whole foreign deficit was the result of
military spending and any rebalancing of the system would have required either that
this spending be financed by selling American investments abroad and raising taxes or
that military commitments be reduced outright: in both cases it would have meant a
drastic downsizing of the empire (and of corporate profits).
It was in these years that America forced the system, receiving in response only
modest resistance from European countries (virtually only from France): it continued
to increase public spending (even in the presence of full employment) thus increasing
the foreign deficit, in 1968 it informally suspended the gold standard (foreign Central
Banks undertook not to convert their dollars into gold but instead to buy Treasuries,
which were tradable on the market and were convertible into dollars), until the gold
standard for the conversion of dollars was officially suspended in1971.
The key to all this is the progressive shift – probably an unconscious one at the
beginning of the entire process – from a system regulated by credit mechanisms and
where the means of payment was the expression of an asset (gold), to a system
regulated by debt mechanisms where the international means of payment is on the
contrary the expression of a liability (the American public debt). On the back of the
slogan “America will not allow foreign countries to dictate its domestic policy” –
which will become a constant in American international relations – logic was thus
inverted: in the first kind of system it is the countries with BOP surpluses, those with
dollar receivables, who force the system to adjust by putting the burden of the
adjustment on to the debtor country; in the second type of system it is America, the
debtor country, who is dictating conditions and is forcing its creditor countries to
finance its own debt. If at one time the debtor country had to raise its interest rates in
order to attract capital to finance its BOP deficit, today it is the BOP deficit itself that
is generating the dollars necessary to finance it, thus enabling America to keep its
interest rates low thanks to the continuous purchase of Treasuries by “other” countries
(there is no question of reinvesting the dollar surplus in any production activities:
OPEC was ready to invest its petrodollars in American enterprises back in 1973 but
was told in no uncertain terms that such an action “would be considered as a
declaration of war”).
The abandonment of gold as the measure of the dollar’s value implies that
creditor countries holding dollars are confident that they will be repaid, in other words,
they have confidence in the fact that the dollar is “strong”. In fact since the dollar has
been freely floating on the market, it has mainly been “strong” for debtor countries and
has alternated between phases of strength and phases of weakness for creditor
countries. And this has happened both for intrinsic reasons (such as higher growth and
the international credibility of the country) and because America has consciously been
following a “strong dollar” policy, threatening or actually causing a depreciation of its
own currency only as retaliation against those countries who did not conform to its
expectations or who posed a strategic challenge (as for example Japan did during the
Eighties). This process has however allowed the reduction of domestic inflation, thus
78
paving the way for the fall in interest rates, which began during the Eighties and which
was much admired by the Soviet Union.
The irony of the story is that in any case America imposed itself on the world
financial scene as the champion of a creditor-oriented system, a position that obviously
suited its interests – because it helped it to oust Britain from its imperial throne – but
which was sustainable because of its creditor position towards foreign countries and its
BOP surplus: the Bretton Woods system and the aim, at least in the initial stages, of its
institutions (the Monetary Fund, the World Bank, Gatt and then the WTO) were based
on these premises. And the system continues to function along these lines for all the
other debtor countries, those who could be referred to – to use a euphemistic term – as
“non developed”. These countries – obliged to comply with the “free trade” model –
are forced to enact policies of austerity (fiscal surpluses and high interest rates),
policies of adjustment (crazy devaluations of their currencies) and policies of
liberalization (savage privatization) with the result of maximizing financial power
(through a vicious circle of international loans and a rise in foreign dollar-denominated
debt) relative to local economic power (work and production) and the Welfare State
(which, where it has existed, is being gradually dismantled). Even in this instance the
double standard of “financialization” - better know as the “Washington Consensus” -
produces double benefits: it allows America to accumulate supplies of strategic
resources abroad as a creditor country and to finance its public sector debt and the
economic and military expansion of its empire thanks to its status as a privileged
debtor nation.
The current situation
Due to the mechanisms described above, the United States’ accounts with foreign
countries have gradually deteriorated. The BOP deficit first appeared at the beginning of
the Fifties and has been a constant since then. During the first few decades it was
absorbed by the US net credit position towards foreign countries that had been
accumulated in the first half of the last century and which was partly offset by the fact
that the private sector recorded a positive savings rate (1.8% of average annual GDP). In
the mid Eighties this “shock-absorber” ran out and foreign debt not only exceeded assets
held abroad but began to grow more rapidly. At the end of 2003, foreign debt stood at
approximately 70% of GDP, the net position with foreign countries was negative and
amounted to just under 25% of GDP and to 300% of exports, which represent the natural
source of currency needed to repay foreign debt over time (as a term of comparison, the
ratio of foreign debt to exports of Argentina and Brazil at the time of their respective
financial crises in 1999 and 2001, was around 400%).
An American research centre, the Levy Economic Institute, twice a year
publishes a study of the evolution of the balances of the various sectors of the American
economy (meaning the differences between savings and expenditure in the private
sector, the public sector and the foreign sector) in which – as the basic scenario – shows
the “constant-policy” trends for the next four years, i.e. what will happen if nobody does
79
anything to change the current course of events. In the latest report published (August
2004)3, the authors made the following forecast: with the hypothesis of annual GDP
growth of slightly over 3%, by the end of 2008 the Federal deficit will have risen to 9%
of GDP and the public sector debt to 60% of GDP; thanks to a modest improvement in
the accounts of the private sector, the current account deficit will have worsened slightly
less but will in any case reach 7.5% of GDP and will take the net debt position with
foreign countries to over 50% of GDP (also due to a rise in borrowing costs). We spoke
earlier of the commitments made or put forward by the current administration, but
which are in any case inconsistent with this scenario.
7. Dollar indexes
(exchange rates weighted on the basis of trade relations between the United States and other countries)
160
The numbers on the right
140 + 6800%
of the graph represent
variations in the dollar in

120
+240% percentage terms. For the
100 “Broad” and “Other
- 40% * Trading Partners”

80
indexes the period
60
covered is 31/1/1973 –
31/12/2004; for the

40
“Major Trading Partners”
index the period covered

20
is 15/8/1971 –
0 31/12/2004.
Jan-73 Jan-78 Jan-83 Jan-88 Jan-93 Jan-98 Jan-03
Broad Major Trading Partners Other Important Trading Partners
Source: Our calculations using figures provided by the Board of Governors of the Federal
Reserve System
It is against this backdrop that in the last few years many signals have emerged
that suggest that the American “imperial drive” has run out of steam.
1. America’s reaction to challenges to the financial mechanisms described above

made recently by third-party countries has been out of all proportion. In the case of
Iraq, the reaction was excessive: the excuse was Iraq’s open opposition to Arab oil
being sold off cheaply to the Americans. In 1998 Saddam Hussein had already
conducted a hard campaign against Saudi Arabia, which was ready to de-nationalize
3
W. Godley, A. Izurieta, G. Zezza, “Prospects and Policies for the U.S. Economy: Why Net Exports
Must Now Be the Motor for U.S. Growth” Strategic Analysis, The Levy Economic Institute, August
2004.
80
part of its upstream business in favour of American companies, and subsequently in

August 2000 Saddam Hussein decided to uncouple oil transactions from the dollar and
to denominate them in euros (a measure which implied the re-investment of Iraqi oil
revenues in Europe rather than in America). In the case of Venezuela and Argentina,
the response was uncertain: with Argentina – which stated that it was not prepared to
honour an international debt that was the result of austerity and impoverishment
measures dictated by the Fund – the same Fund that has for two years now been
negotiating repayment (with private investors Argentina has already declared itself
insolvent); with Venezuela – which has nationalized its oil industry and used the
proceeds to increase its public spending especially in the sectors of health and
education - America has twice attempted a regime change, but has received two
resounding defeats in two years (the second one through the most democratic
institution in existence, the referendum).
2. Another alarm bell has been the weakening of the dollar despite the constant
substantial inflow of foreign capital. The fall in the value of the dollar has been more
marked against the other main currencies (-40% approximately since 1971), while
compared to a broader index – which measures the value of the dollar against the
currencies of both creditor and debtor countries – the American currency, after
appreciating in value for thirty years, has declined significantly in recent years (-16%
approximately since its all-time highs recorded at the beginning of 2002). We are thus
witnessing a trend consistent with a low level of interest rates – both in absolute terms
and relative to other countries – with a net debt position with foreign countries, a clear
sign that there is perceived to be an excessive supply of dollars (see graph 7).
3. However two facts strike me as more significant because they are structural.
First of all is the growing resort to the formal exercise of the empire, not only through
wars and occupation, but also by making it into an explicit theory, with the doctrine of
“pre-emptive war” as an instrument of systematic intervention aimed at maintaining
hegemony and the re-armament that this involves4. In 1953, two historians, Gallagher
and Robinson, put forward the following argument to analyse the evolution of the
British empire in contrast with traditional interpretations5: that the informal empire,
held in place by economic dependence (and known as Pax Britannica), and the formal
empire, held in place by colonialism, are in fact complementary. Resort is made to the
second form only when: a) the geographical area involved is of strategic importance to
the empire (in terms of resources or geographical position), and b) it is no longer
possible to dominate it through exercise of the informal empire. If we replace Pax
4
First mentioned in the paper “Rebuilding American Defenses” written in 2000 by the Project for the
New American Century – a centre of neoconservative opinion and propaganda – the doctrine was
formalized in September 2002 in a document of the National Security Council (“The National Security
Strategy of the U.S.A.”).
5
J. Gallagher and R. Robinson, “The Imperialism of Free Trade”, The Economic History Review,
1953.
81
Britannica with the Washington Consensus, and colonialism with nation building and
the export of democracy, this analysis can reasonably be applied to the American
empire. The difference is that both Britain in the nineteenth century and America in the
first half of the twentieth century were creditor nations, and this was the basis of their
international credibility, giving them the ability to exercise an informal empire.
The gradual passage of America to a debt position has reduced the international
credibility of the country, obliging it to have greater recourse to the exercise of its
formal empire. This process is a circular one: the more resort there is to the exercise of
the formal empire, the more military spending grows, the worse the net position with
foreign countries becomes, and international credibility falls even further, and so on.
Moreover the growing recourse to the formal empire, for those countries that are
subjected to it, means territorial break-up, the disappearance of institutions, the spread
of tribal powers and terrorism and the loss of the country’s historical, civil and cultural
memory. This process is clearly explosive.
4. The second significant aspect is on the domestic front. America is gradually

assuming the development characteristics typical of a debtor country. The combination
of high unproductive public spending and corporative protectionism favours
concentration rather than competition, diverts funds and jobs away from economic and
social development, away from the productive sectors of the economy towards the
unproductive ones (such as defense and most of the service industries). An example of
great interest is to be found in the report of the American Society of Civil Engineers
(September 2003)6, which shows how most American infrastructures (roads, bridges,
schools, waste treatment systems etc.) are in a state of advanced decay and would need
repair and modernization for around an estimated 300 billion dollars per year over a
period of five years (here the irony is that the funds allocated for rebuilding
infrastructure in Iraq are far higher than the same items included in the federal budget
for domestic infrastructure). The results of this shift of spending towards unproductive
sectors are the phenomena of off-shoring, or moving production offshore, and
outsourcing jobs to countries which have more recently appeared on the world market
scene and which offer a total labour capacity of over five times that of America: China
and India.
At the basis of America’s persistent, growing trade deficit, which is now
insensitive to the business cycle, is the fact that America has to import the goods that it
no longer produces, reducing at the same time its export potential. And this is not all:
despite the dominant argument, which claims that these phenomena are to the advantage
of everyone concerned (higher profits for businesses, lower prices for consumers,
foreigners buying growing quantities of American produced goods), in reality they
generate income, employment and know-how in the countries where production is
located while, on the contrary, America loses these benefits permanently. The
consequence of all this is that the prospects of development for American labour are
6
American Society of Civil Engineers, “Report card for America’s infrastructure – 2003 Progress
report”, September 2003.
82
linked almost exclusively to the creation of low-cost jobs with a low level of
specialization and a low technology content. According to the ten-year projections of
the Bureau of Labor Statistics, in this time frame America will lose its position of
leadership in the field of technology, creating only 5% new jobs in the hi-tech sector7,
and this will be the case even without taking into account the fact that today, three years
from the end of the recession, there are some 200 thousand fewer jobs in that sector.
This is a road that leads in the opposite direction to the greatly extolled knowledge
economy and to the old Fordist model where work was rewarded in order that it should
become more productive and capable of consuming. This road leads to a model that can
be defined as a “Wal-Mart” model, where mass produced goods are sold thanks to
continual price reductions, and where the labour force finds itself systematically in the
situation of having to choose between falling wages or job losses.
While America swallows up capital voraciously (it does in fact absorb some
80% of surplus world savings), it is shifting jobs abroad on a permanent basis, thus
abandoning the development of its production capabilities. Neither is it worried – as
we saw at the beginning – about how it is going to meet its future debt obligations with
its own citizens (health, social security, pensions). In this case, the process is one of
implosion.
The prospects
How can this situation be resolved? First of all it must be stressed that apart
from the dimensions involved, which are undoubtedly unique, the crisis of its model is
nothing new for America. Twice in the past (in the Thirties and the Sixties), America
had to face a crisis and managed to find a way out of it: at the end of the Thirties the
economic crisis was overcome by imposing Big Government definitively and by
increasing public spending; at the end of the Sixties the financial crisis was overcome
by uncoupling the dollar from the gold standard and changing the whole of the
international monetary system. Both these periods were characterized by the presence
of voices of criticism which highlighted the risks involved and tried to set up political
opposition. The Thirties saw the trend of the anti-militarist libertarians, who drew
inspiration from Jefferson and who opposed the growing concentration of power in the
hands of the executive; in the Sixties this trend was joined by left-wing (P. Sweezy, P.
Baran) and independent economists (such as M. Hudson, who specialized in the
analysis of international finance), and lastly by Kennedy, who was the most significant
example of support on the political front, especially in terms of the expectations that
he was able to arouse. Intervening in December 1962 at the Economic Club of New
York, Kennedy spoke of the reasons behind the tax reform and why it was needed,
stressing that cutting income tax would stimulate the economic machine and would
7
The whole of the February 2004 issue of the journal Monthly Labor Review Online is dedicated to these
analyses.
83
favour full employment, thus improving over time the capacity of America to
self-finance its public sector deficit (a sort of supply-side economy before its time) and
reducing the country’s dependence on external financing: Kennedy seemed to be quite
clear about the link between the Federal deficit and the foreign deficit and the
associated risks thereof. In the same speech he also dealt with the problem of military
spending: his words expressed the conviction that the investments made in the military
field in recent years had led America to occupy a position of strategic superiority in the
nuclear field and that a good deal of progress had also been made in the conventional
field, with the result that it was feasible in the medium term to pursue the objective of
gradually reducing military spending. In this capacity, in spite of all his contradictions
and the fact that his work remained incomplete, Kennedy epitomizes liberal aspirations
more than any other politician, adopting certain features that are typically laissez-faire
(less Big Government, fewer subsidies to oligopolistic industry), but at the same time
avoiding the radical aspects preached by intellectuals of the libertarian tradition.
8. How important foreign investors are for the American public sector debt
(percentage of long-term American Government securities held by foreign investors)
70%
60%
56%
50%
50%
45%
40%
40%
37%
30%
20% 22%
19%
15%
14%
10% 12%
0%
Dic. 1974 Dic. 1978 Dic. 1984 Dic. 1989 Dic. 1994 Dic. 2000 Dic. 2001 Dic. 2002 Dic. 2003 Ott. 2004
Source: our calculations using figures supplied by the Department of the Treasury, Federal
Reserve Bank of New York, Board of Governors of the Federal Reserve System
With the death of Kennedy the supporters of military confrontation and public
spending got the upper hand (it was actually during these years that the
neoconservative movement began, under the auspices of the hawkish Senator Jackson
– a Democrat) and the voices of criticism became silent. Today the situation is
analogous: we are in a peak phase, in which the absorption of resources and their
utilization for corporative purposes are at a very high level and in which the cracks are
becoming more and more evident; today many analyses are being made, the level of
debate is rising, and alarm signals are coming from important economists (such as S.
84
Roach, Chief Economist of Morgan Stanley) and from the establishment itself (for
example P. Petersen, President of the Council on Foreign Relations, and A. Niskanen,
President of the Cato Institute). The differences are of quantity – this time the deficits
are huge and are growing rapidly – and of quality – the excess dollars and Treasuries
abroad are held by Asian Central Banks (approximately two thirds of the total), see
graphs 8 and 9.
Once the critical aspects of the model have been clarified, without wishing to
make any rash hypotheses regarding the possibility of America forcing the situation
again (it seems to me that all the options have been exhausted anyway), two possible
scenarios can be envisaged, one involving a “soft landing” and the other a “hard
(emergency) landing”.
1. The first scenario is the one that most analysts preach and most observers hope
for. In essence, it would involve a gradual re-absorption of both the public spending
deficit and the BOP deficit through restrictive monetary and fiscal measures. Given the
macroscopic nature of the deficits, the estimates circulating as to how much of a
slowdown in growth would result are such that a period of several years of anaemic
growth would be forecast. This would make the problem of downsizing the empire even
more evident: if the rebalancing mechanism failed to be effective in conditions of more
modest deficits and in the presence of a dollar-gold link, I find it difficult to imagine that
this mechanism could work today, if not on a voluntary basis at least on a cooperative
and multilateral basis, when the stakes are so much higher. A possible scenario yet not a
very likely one.
9. The principal creditor nations of the United States – October 2004

(the distribution by country of US Treasuries held by foreign investors)
Turkey,
Israel
OPEC 1% Others
3% 8%
Canada
Latin
2% Japan
America
3% 38%
Switzerland
3%
Offshore centres
5%
Britain
8%
European Monetary
Union
8% China + Hong Kong
Others Asia
11%
10%
Source: our calculations using figures provided by the Department of the Treasury
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2. The second scenario is that of the hard landing: the countries with surpluses
stop financing the American deficit and use the money for their own domestic ends.
The countries with a debt towards America, and towards the West in general, follow
the example of Argentina and go bankrupt without repaying their debts. America,
deprived of its funding, is forced to implement restrictive measures to its public
finances together with a sharp devaluation of the exchange rate and a hike in interest
rates. This is, in my view, the most likely scenario the longer America puts off making
the necessary adjustment.
One of the reasons is that creditor countries (especially Japan and Europe) are very
likely to find themselves in the condition of having to repatriate funds in order to
finance the impact of negative demographic trends. Ageing populations with the
resulting decrease in their active workforce will come about in these countries earlier
and more rapidly than in the United States, and the self-financing channel (by
increasing fiscal pressure) cannot be used because of the high tax levels already in
existence. It was no chance that Haruhiko Kuroda – currently at the head of the Asian
Development Bank and formerly an important consultant of the Japanese premier
Koizumi – pointed out that this funding need will make it necessary, at a certain point,
to keep within the Japanese domestic economy savings flows currently being directed
towards financing the American BOP deficit. The devaluation of the dollar that would
follow the repatriation of Asian and European capital would probably be substantial
and would take place very rapidly, causing a worsening of prices for exporting
countries (Asia and Europe). For debtor countries, the only way to break the vicious
circle of “debt-loans-privatizations-underdevelopment-unemployment” and to take
repossession of their own resources, would be to repudiate their financial debt (which
would not actually be a great cost for the West) and to bring ownership of these
resources back into the domestic market, after enacting a reform of the property
system, which has often remained at a level comparable with the latifundium regime
(at least in South America).
What remains uncertain is the time frame of these events. The projections made
by the Levy Institute on the basis of current policies remaining constant, to which
reference is made above, are actually conservative estimates: they do not, for instance,
take into account, and cannot take into account, funds committed through emergency
appropriations. What would happen if an Iranian and/or a Syrian front were to come
into the picture8? How will Putin’s change of direction if not downright rebellion
against the Washington Consensus be dealt with (blocking Jukos from trying to sell
Russian natural resources abroad, the nationalization of the oil industry, the
8
In 1996 “A Clean Break” was drawn up, a policy document for the election campaign of Netanyahu in
Israel. Written by various exponents of the American neoconservative movement - in the middle of the
Clinton era – it preaches a regime change for Arab countries, starting with Iraq and continuing with
Syria and Iran. Even more radical was a paper presented by the Rand Corporation in 2002 to the Defense
Policy Board arguing that it would be a good idea to intervene directly with no half measures in Saudi
Arabia and carve the country up.
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constitutional changes recently put forward, the announced increase of the percentage
of official reserves invested in euros instead of in dollars)? So far America has made
no explicit response to the “resource rush” undertaken by China, but in the event of an
American slowdown the question of competition to control strategic resources would
become a matter of some urgency. On the other hand we cannot exclude the possibility
that America may try to limit its BOP deficit, and thus the accumulation of foreign
debt, through extreme forms of protectionism combined with a creeping devaluation
(as happened in 1973). Not only would the exports of creditor nations be penalized
even further and arbitrarily, but their dollar receivables would lose value: the current
administration has already given clear signs that it has no qualms about adopting such
a policy. There are therefore elements that lead us to fear that America’s figures – and
the instability that would be the result at international level – are destined to worsen
extremely rapidly.
In reality the two scenarios put forward differ with regard to the speed of the
adjustment, but not with regard to the direction involved: in both cases, in fact, there
will be a rise in interest rates, a depreciation of the exchange rate and a slowdown of
domestic demand. In the first instance it would all happen in an orderly fashion and by
degrees, whereas in the second it would all happen much more quickly and much more
massively. The probability of one or the other taking place depends, therefore, on how
long the current situation drags on, as the numbers continue to get worse: the longer
the adjustment is postponed over time, the greater it will be and the more likely it will
be that the scenario will be that of the hard landing.
In 1961 Eisenhower felt the urgent need to warn his successors of the risks
connected with the "military-industrial complex" meaning the "conjunction of an
immense military establishment and a large arms industry”: a machine that has become
gigantic in terms of the amount of money involved ("we annually spend on military
security more than the net income of all United States corporations") and the number
of people employed, and which is now such that "the total influence – economic,
political, even spiritual – is felt in every city, every state house, every office of Federal
government. (…) We must not fail to comprehend its grave implications”. During the
Nineties America systematically and explicitly opposed all plans put in place by
creditor nations, the European Monetary Union and the Asian Monetary Fund, in order
to become more independent of the Washington Consensus, sabotaging the former and
sinking the latter. Today there is no reason to suppose that things are any different and
that attitudes are more amenable.
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CHINA-AMERICA THE GREAT GAME CRUDE AWAKENINGS
CRUDE AWAKENINGS by Margherita PAOLINI
The United States were caught by surprise by the new global energy competition,
unleashed by China, India and other emerging countries. The return of the agreements
of production between states, bete noir of the Americans.
1. T he Clinton administration left by way of inheritance to Bush a domestic
energy system already structurally weakened by the growing disparity between a

continually expanding demand and an increasingly sluggish production of national oil
and gas resources. The problem of excessive dependence on foreign supplies, in
particular from the Middle East, was already seen as a risky exposure. The priorities
then were the recovery, as quickly as possible, of the domestic productive capacity, the
application of some energy saving measures and the regulation of products of
consumption, considering that one part of the oil reserves is now exhausted and one
can only count on four productive areas for the future. At any rate, given the
unpreventable decline of oil reserves, the valorization of national natural gas resources
was highly recommended both in terms of development and commercialization.
The American energy system has certain built-in rigidities which increasingly
necessitate federal intervention in order to regenerate efficiency: a global demand of
up to 60% of gas and oil, a transport sector responsible primarily for the growing quota
of oil consumption (especially benzene) and for the incentives offered to the
automobile industry with a low taxation on gas. Lastly an idle refining system with a
treatment capacity of 16.5 million barrels a day (b/d), which cannot cover a demand
that has grown to 23 million b/d. This difference accounts for foreign dependence even
for a quota of finished products—about 2 million b/d—imported from Venezuelan
refineries. The problem for Bush was serious but not insurmountable seeing that
initially market prices granted sufficient profits to the operators of the energy sector.
But the slowdown of the economy which already preceded the trauma of
September 11th froze the activities of the US operators. Then, the temporary crisis of
demand following September 11th, especially in the transport sector, and the relative
drop of energy prices caused the oil companies to seek foreign investments.
Consequently, a crisis befell a number of small and medium-size operators, which for
many was irreversible. Thus was accentuated the already inexorable structural drop in
domestic production.
But from the moment of the attack on the Twin Towers Bush concerns were
focused on a different conception of energy security, supported by his vision of
preemptive war. This was the basis of his policy of strategic supplies (Strategic
Petroleum Reserve or SPR) which between 2002 and 2006 will have to reach 700
million barrels and perhaps more, the most vast global oil reservoir, guarded in caverns
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that were once salt mines. Today the SPR has officially reached a quota of 680 million
barrels. A The system will be able to guarantee a reserve of 4.3 million b/d for 90 days.
The policy of massive reinforcement of strategic reserves begun in the months
immediately preceding the war in Iraq has created an added demand which has further
shaken a global market, which remains in balance but is threatened by diverse factors:
the strong growth of energy demand in emerging countries; the drop in Venezuelan
production, presently the US’ third supplier; and the first signals of strong speculative
movements.
Between 2002 and 2004 prices on oil imported by the US, influenced by the
Nymex reference that created the upsurge, suffered two successive flare-ups that raised
them from an average of 23.7 to 36.7 dollars a barrel. US oil rose from 17.6 to 36.9
dollars a barrel. Beginning in 2003, energy production improved slightly. But in the
meantime vice-president Cheney designed a map of provisions arranged with a
restricted group of oil companies. This was reinforced by the bankruptcy of Enron,
which was dismembered and divided amount the major energy firms.
The connection between the administration and the oil companies, begun to
augment the security of energy facilities against terrorist attacks, is increasingly
becoming a strategy of its own with the following aims: a forward policy of energy
security reducing dependence on the Middle East and in particular on Saudi Arabia;
blackmailing or taking down the Chavez regime which creates dangerous turbulence in
Latin America; and spreading the American strategic presence to Asia and Africa.
The oil companies can reveal the best locations: those which guarantee large profits
and which the US political and military presence (or NATO, or mercenary, but always
organized by the Americans) contributes to ensuring their value. In the last two years
the US plan for foreign supply for the near future has become focused on a few
geographic macro areas.
If North America remains in theory the most secure resource system, policies of
new production demand further investment. However the oil companies are still
loath to venture it. Obviously they are involved in the Gulf of Mexico. The problems
come from the northern area of Latin America-Trinidad -Venezuela-Columbia-Ecuador
system, conceived by the oil companies, led by Chevron Texaco, as a reservoir
integrated with the American one. The quarrel between Chavez and the corporations,
exacerbated by the virulent anti-Americanism following the unsuccessful coup d’etat,
affects the project. Even if Venezuela has recently increased oil exportation towards
the US, commercial relations between the two countries are hanging by a thread.
Hopes and fears alternate in the North Sea and the Antarctic sea where BP,
Royal Dutch Shell and Exxon Mobil must cede the way to Norwegian Statoil, destined
to become the principal supplier of the American market. Further east great projects
are underway on the reserves of offshore Russia. Khodorkovski’s Jukos was pressured
by Exxon Mobil and Chevron Texaco to transfer its best assets to them, valued at 20
billion dollars. But now 15% of its juiciest assets are in Putin’s hands who uses it for
commercial purposes with China and Japan
Things are better in the Caspian. Chevron Texaco drives the great project of
developing the oilfields of Tengiz in Kazakhstan, where production destined for the
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US should double by 2008.

In the Middle East the heralded diversification continues to betting on Saudi
Arabia which still maintains a position in the aristocracy of Washington’s preferred
suppliers. Maintaining the necessary production from now until 2010 according to the
American administration (20 million b/d), Riyadh risks ruining its oilfields, old and
new. The Iraqi campaign has been disappointing until now. At least before the war, 1.3
million b/d arrived at very convenient prices on the American market. Now one hopes
for the restart of exports: perhaps 1.7 million b/d in 2005: a flow well-protected by
government militias and local administrations directly interested in their territories’
resources. Meanwhile the first contracts for technical assistance to regenerated and
develop the Kirkuk and Rumayla oilfields were awarded to Royal Dutch Shell and BP,
respectively.
It is in Africa that Bush-large corporations strategy should yield the most
interesting results. Beginning in the North, with Algeria and now Libya, where
Chevron’s spectacular entrance was announced. New development of oil and gas
resources are involved in the basins of the so-called “Berber Pole”. However,
culturally based autonomist claims are arising against the government, accused of
being too “Arabized”.
The principal African pole is the Gulf of Guinea, from Nigeria to Angola, where
traditional coastal suppliers are joined by Equatorial Guinea, Congo and Gabon.
Cameroon is becoming an outlet for new reserves discovered in Chad and exploited by
the omnipresent Exxon Mobil and Chevron Texaco. Finally, the island of Sao Tome
remains far offshore, away from terrorist attacks and political tension. By 2010, 25%
of American oil imports will have to come from this region, which will be guarded
thanks to a military base now under construction in Sao Tome.
And yet this strategy has not produced any significant improvement of the
United States’ energy situation. Domestic production, with a few exceptions, continues
to drop, while the bill for supplying continues to rise. To this one must add the
growing cost of militarization abroad: the “oil protection” in zones of production, the
defense of facilities and patrolling of maritime routes in the Gulf, the Arabian Sea, the
Straits of Molucche, the South China Sea, etc.
2. Since September 11th the oil companies have de facto written Bush’s energy
agenda. And they have contributed to aggravating the crisis of the US system. The
divide between growing consumption and falling supply has widened. Thus the
dependence on foreign resources. This policy has ended up sacrificing gas, which is
exists in vast amounts in North America, even more than oil. The United States have
reserves that put them in fifth place in the world scale, behind Iran, Russia, Qatar and
Saudi Arabia (which could in the future be superseded by Iraq).
The companies have snubbed the actions put forth by the national energy plan.
Among its priorities were the boosting of domestic gas production and
commercialization. The minimal interest in national gas production combined with the
scarcity of oil products has further weakened US energy market. The domestic and
international juncture, which in 2004 determined the inexorable increase of consumer
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oil prices, has ended up involving gas as well. From 2002 to 2004 its price in the US
rose by 48%.
Now that the price of US gas has more than doubled from 2.95 to over 6
dollars/MBTU, the large companies are interested once more, for two reasons.
The crisis of domestic gas supply makes for irresistible pressure on companies
to start up the exploitation of the most precious reserves, many in federally protected
areas, both domestic—parks and Indian reserves—and coasts and offshore. Until now
these were spared thanks to a moratorium that President Clinton renewed until 2008.
The most desirable reserves, besides offshore Florida, are those of ANWR (Arctic
National Wildlife Refuge), which are 100% protected. The bipartisan resistance in the
Senate which had saved them until now has dissolved since the elections. Both the
former Energy Secretary, Spencer Abraham, and the new one, Sam Bodman
(previously Under Secretary of Commerce and Treasury and president of one of the
most polluting companies), have announced the “necessity” of drilling to “guarantee to
our citizens an adequate energy supply”.
The companies expect to obtain the necessary investments to drill. How?
This time they can count on sufficiently profitable market prices. So commercial
interests suddenly coincide with national ones. But the companies will be in charge.
The expected leap in US demand for gas, from 22 trillion cubic feet in 2003 to at least
31 trillion by 2025, explains the campaign promoted by Exxon-Mobil for foreign
resources. This strategy involves the enhancing of Canadian production. Thus the
development of the offshore reserves of the Beaufort Sea, the Arctic isles and Nova
Scotia. The campaign extends to Mexico, strongly connected to the US network.
The North America is interconnected not only logistically but also in terms of
management. The companies that matter—American, Canadian and Mexican—are
always the same: Exxon Mobil, Chevron Texaco, Royal Dutch Shell, Conoco Phillips,
Marathon, BP USA, etc.
Nonetheless, the key aspect of this enrichment is the areas of production foreign
to the American continent. If the growing American demand is primarily served by
foreign markets, investments for the commercialization of these reserves are required.
The most conspicuous projects are in Southeast Asia: in Malaysia (where as
elsewhere, we find former pieces of Enron), in Indonesia (particularly offshore of the
province of Aceh where Exxon Mobil operates), in Australia (Northwest Shelf) and in
the Sea of Timor. Investments in this region should allow the building of a supply of
LNG (liquid natural gas) to cover part of the growing demand of Japan and South
Korea as well. The most ambitious objective is to monopolize the Asian market of
LNG. In Qatar and Nigeria on the other hand, the great projects underway are
intended for the American market (Chevron) and its British friend (BP). At the
moment, a battle without quarter is underway over the projected building of plants and
terminals along the US and Mexican coasts and offshore (California and the Gulf of
Mexico). The boom of foreign supply is liquid natural gas is in fact sponsored by the
White House. Since 2004 Bush has been making it a question of national security,
almost more than oil. “I see an iceberg in front of us, a dreadful increase in the price of
gas if we do not manage to build the necessary plants on the American coast.”
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Only one aspect of the boom of LNG is still in discussion. The plants and the
great ships, particularly in Southeast Asia, could represent targets for terrorist attacks.
This will be a great boon to private security firms.
In 2002 US imports of LNG by sea accounted for little less than 1% of
domestic consumption and came mainly from Trinidad. In 2020 they should account
for 80%, making the US the largest importer of such resources and worsening its
record of energy dependence.
The companies in Russia and Central Asia play a strategic role when it comes to
gas, commercializing quotas of Russian, Kazakh and Turkic gas. As and perhaps even
more than with oil, the Jukos collapse has given Putin full control over commercial
treatment of gas. On the other hand, the “Orange Revolution” is creating a crisis for
the flow of Russian supplies and those through Russia to Europe. Yushchenko wants to
review the Russo-Ukraine joint-venture (International Gas Consortium) which
manages 85% of Russian exportations of gas towards the West. The new Ukraine
government intends to construct a society which involves instead German Ruhrgas and
which works with the Turkmen government without Russian interference. A challenge
to which Putin is attempting to respond by seeking alternatives to Ukraine for the
exportation of Russian gas, exploiting the vastness of his territory and the diversified
collocation of his reserves. The safest alternative will be in the future, in the arctic seas
as well as Turkey.
Thanks also to the enormous energy profits of 2004, Russia is also undertaking
the exploitation of reserves on the Jamal peninsula (western Siberia), the Sea of
Barents, eastern Siberia and the Sakhalin peninsula. This should guarantee exports
both to Europe and towards the Far East—on the basis of recent agreement signed with
China and Japan. Further acquisitions of gas reserves are possible after the accord with
Kazakhstan to divide a large field of oil and gas along the border between the two
countries. Besides, it is highly likely that thanks to co-production of gas with
Norwegian Statoil in the Sea of Barents, Russian Gazprom can become an important
supplier of LNG to the east coast of America. Statoil is considered by the US one of its
most important partners.
3. The battle for gas reveals the growing competition in the world market for
energy resources. As former Secretary of Energy Abraham observed, “I foresee that as
far as gas is concerned, we will witness the same type of challenge as for oil”. The
competition has swelled with the entrance of two new players, China and India,
followed by a group of new entries that threaten critical mass, like Malaysia and Brazil.
China is also an important producer (which nonetheless can’t cover a demand which in
2004 reached 5.5 million b/d). The growth of domestic energy demand for these two
players was forecast up to 2002. But no analyst imagined a similar rate of
development.
These giants tend to get involved in the corporations’ hunt for reserves. And
they acquire assets in important projects of LNG or oil prospecting. Chin in particular
has stabilized its position in the South China Sea (Spratly and Paracelso islands),
which it considers its own. From this platform the Chinese are projecting themselves
92
towards significant zones in the Indonesian seas (around the Natuna archipelago) and
in Southeast Asia, up to the coasts of Northwest Australia, where major companies are
already stationed. The Chinese expansion in Southeast Asia is especially worrying for
the Americans. Also because the Chinese acquisition of Unocal would grant to Beijing
a notable know-how for energy resources in that area.
But Beijing’s invasion goes well beyond that: from the Middle East (oil
explorations in Saudi al-Rub al-Hali, joint-ventures with Iran, which provides 40% of
China’s oil consumption) to the Gulf of Guinea (where Nigeria is another important
exporter), from Norway to Venezuela.
Partly thanks to China the Venezuelan leader Chavez can allow himself to snub
the Americans. Caracas has stipulated a joint venture in a contract with the major
Chinese state company—CNPC, which operates offshore—for the development of oil
and gas reserves. This allows Chavez to sustain his neo-Bolivarist aspirations, seeking
to build a Latin American energy pole, with obvious geopolitical connotations.
The Chinese model of consumption seeks to contain levels of dependence on
importation through two basic choices. First: national companies are given incentives
to acquire directly from the producing governments (operations from state to state),
involving contracts of production sharing agreement (PSA). Second: the Chinese buy
assets of energy groups or enter in quotas of projects already in development. This
differs from other important consumers like the Japanese, which are at the point of
dissolving their national company, which had a single objective—to directly seek new
resources.
The Chinese and Venezuelan models—consumer and producer—represents the
most dangerous challenge for the United States. They are building on a global scale,
offering an enviable example to other emerging countries.
As far as India is concerned, its principal zone is the Middle East. Beginning
with Iran. The Indians have stipulated with the Persians analogous to the Chinese one
(40 billion dollars) for the import of LNG and the development of Iranian oilfields.
Tehran and Delhi have raised the prospect of a gas pipeline from Iran through Pakistan
to India. This has profoundly irritated the Americans. They have been trying for its gas,
to be developed by Exxon. But the Pakistanis consider it to costly and intend to go
with the Iranian project, guaranteeing passage towards India. The Indian projections in
the Gulf concern Saudi Arabia, Oman and Kuwait. In Southeast Asia, on the other
hand, India’s principal partner is Malaysia. But above all, Delhi proposes to become
the over a long term period among the major consumers of the region.
Lets move on to the third player of the competition, reentered into a new sort of
energy triangle with China and India. Putin’s Russia also inserts itself into areas of
strategic American interest, from Venezuela to Nigeria to Saudi Arabia, Until now it
has worked onshore, so it is hardly competitive. Nonetheless, the collaboration with
Norwegian Statoil will allow Russian companies to acquire experience in the
technique of deepwater perforation. They will become dangerous competitors of other
companies in their area of superiority. The American companies Chevron Texaco and
Exxon Mobil, have lost the key to dialogue with Moscow. The projects in the field
until 2003 were reviewed in the name of commercial and geopolitical logic. The
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Russo-American rapport returns to a purely market-oriented dimension. or example

the accord that Gazprom signed in December 2004 with the American Conoco-Phillips,
in partnership with France’s Gaz, for production of LNG in Shtokman.
The US-Russia competition continues on the Caspian, around a crucial question:
where will Chevron Texaco’s quota of Kazakh oil go, once it leaves the Russian port
of Novorossijsk on the Black Sea. Lets move on to Ukraine, where the “Orange
Revolution” offers westerners a port in Odessa. Beyond this, the famous Baku-Ceyhan
pipeline, is now completed for the Georgian part and creates some security concerns
for the Turkish part, as it crosses Kurdish territory. The moribund Ambo project
(Bulgaria-Macedonia-Albania) also reemerges. On December 28, 2004 a political
protocol was signed for this alternative conduit, from the Black Sea to the Adriatic.
Europe is the most discrete competitor, because it contributes notably to
supplying the American market with oil products. In fact the principal European
countries possess a surplus of refining useful to American consumers. Nonetheless
Europeans maintain strong interests in areas strategic for the US—the Caspian (oil and
gas), North Africa (gas and oil) and the Gulf of Guinea (oil). Besides they consistently
contribute to the development of Iranian energy, in clear opposition to American
policy.
From this picture of international competition emerges the myopia of the
corporations. Instead of serving as American strategic sensors, for a more stable and
secure national policy, they have underrated the negative effects of the rise of US and
international demand, seduced by the possibility of enormous earnings. Of course one
can’t fault their earnings, seeing that in 2004 Exxon Mobil’s profits reached 25.3
billion dollars and BP reached 13.5 million pounds. They have also contributed to
ruining the relations with suppliers from Venezuela, now labeled by the Bush
administration as a “non-reliable supplier”, at least as long as Chavez is around.
Caracas is now working with Panama on an oil route from the Atlantic to the Pacific,
which would allow the passage of 800 thousand b/d as Venezuela hopes to raise
present production from 2.65 to 5 million b/d by 2009.
4. In this competitive context, the American energy crisis becomes structural. It is

now impossible for companies to acquire foreign resources at favorable prices. If last
year the US paid 38 dollars a barrel, this year it is unlikely to drop below 35 dollars.
This figure will probably be the threshold of reference for OPEC, which announced
the end of the phase of 22-28 dollars a barrel fixed in 2000. The producing countries,
despite the weak dollar, have no desire to lose profits which they are used to.
At least once the earnings of the mainly Arab producers ended up in US banks.
Since September 11th, the diffidence in the Arab-American rapport favored the transfer
of part of the oil capital. The Gulf producers were moved to invest at home, to
confront social emergencies and thus reduce the support for the jihadists. If money
arrives in America it is more to buy goods than to invest.
Once could object that with the price of oil fixed in dollars, America is not hit
too hard. But if in the deficit of commercial balance, which in 2004 reached 660
billion dollars, one is not able to depreciate the cost of crude oil (over 200 billion),
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given the psychological effect of instability. Oil consumers continue to expand in the
transport sectors as in the production of electric energy. With the supply always tied
down, prices of benzene (+24%), diesel (+35%) and gas (+36%) have continued to rise
in the course of the last year (January 2004-January 2005). The companies consider it
normal that consumption has grown despite the increase of prices. In fact, the present
prices of oil products are inferior in real terms to those of 1981. Even the fiscal quota
has remained low to stimulate consumption—thus the increased sale of vehicles,
beginning with pickups and SUVs which guzzle the most gas.
To reduce the debt it is necessary therefore to begin with the domestic market.
Here Bush could do something concrete and structural. The rise of consumption erodes
commercial supplies, holding to levels fixed by the operators. Each negative variation
of levels is used by speculators on an international crisis or a cut in OPEC production
for profit. The rigidity of the American system, unable to adapt to minimal turbulence,
geological or geopolitical, of the energy markets becomes obvious.
The US commercial supplies are hence considered by the international market
as an important factor in the formation of speculative prices. Structural government
action designed to calm matters would be useful. However, the president’s agenda
continues to make the operation of strategic reserves a priority.
In this context of growing dependence on foreign supplies in an international
market that is increasingly filled with competitors, Bush and the corporations are
compelled to reemphasize the collaboration—never really interrupted—with Saudi
Arabia. Riyadh has continued to provide continuity to the American market.
Arabian Light remains its north star. The difference in respect to pre-September 11th is
that the regime’s stability seems highly compromised, while the reciprocal diffidence
has grown. In sum, Riyadh is no longer the swing producer it once was.
Together with the Saudi-American retrouvailles, the other path followed by
Bush consists in using nuclear energy for the production of electricity. But without too
much emphasis, so as not to disturb the oil companies. The new Secretary of Energy,
Sam Bodman has announced that the atomic centers are secure. Meanwhile the project
continues to transform Yucca Mountain in Nevada into a nuclear waste deposit, with
bipartisan support.
5. The concept of a bringing together a strategy of national energy security seems

to escape this administration. America oscillates between the security approach of the
government which spends an enormous amount on protection (guarding of domestic
plants, patrolling of maritime routes, guarding of foreign pipelines and oilfields) and
the speculative approach of the energy firms.
Is their another way? Yes. But it is not written in Bush’s agenda. Lets try to lay
it out in five points.
First: reduce the intensity of the growth of energy consumption, especially in
the transport sector. For example, with an effective taxation on benzene, designed to
cover other incentives. The automobile industry should be encouraged to produce
lighter vehicles which consume less.
Second: stop the reduction of domestic production, giving staying power to the
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small and medium-size companies which work on reserves abandoned by the giants.
It is estimated that this activity could raise present production by about a third.
Third: balance the importation of LNG with a major domestic production of
gas.
Fourth: create a sort of Monroe energy doctrine, which privileges North
American suppliers (from Canada to Mexico).
Fifth: integrate this strategic choice with a plan of foreign resources, through
accords from government to government of production sharing, differentiated but not
dispersed according to the pure interests of the energy companies.
All these measures would greatly assist the government, preferable to a collage
of recycled pieces of Enron or based on the whims of the corporations.
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CHINA-AMERICA THE GREAT GAME THE EMPIRE ON CREDIT
THE EMPIRE ON CREDIT by Lucio CARACCIOLO
Bush’s objective is to render America more independent from the world, since the
world is terribly dangerous for America. Economic dependence from Asian central
banks, a basically defensive-shaped army and a declining appeal on foreign
populations make Bush’s “mission” a very hard one. While China stands on the way.
1. O n George W. Bush’s table in the White House, a recent visitor noticed just
one book: an anthology of selections from the Bible. Two years ago David Frum,
brilliant neoconservative speechwriter, noted that in the presidential circle, the study of
the Sacred Scriptures was “if not obligatory, not quite optional.”1
The most powerful leader in the world is a man of faith, as profound as it is
open. His evangelical Christianity is not only a dimension of the soul, it is a guide for
action. His favorite political philosopher is Jesus. Before making important decisions,
he collects himself in prayer. When asked on what he bases the assurance with which
he confronts issues of which he has no special knowledge, he replies: “My instinct”.2
Of course it is not true, as some of his former collaborators have maligned, that
he imagines himself on a mission among humans to do God’s work. But without
considering his fervent religiosity, a born again Christian who twenty years ago
escaped the curse of the bottle, one cannot understand much of Bush—how he thinks,
speaks and operates.
The world does not exactly burn with love for this president. The
anti-Americans depict him as a marionette in the hands of capital, occasionally
incarnated by his Vice President, Dick Cheney. No one suspects that Bush possesses
the trappings of genius. Not even himself, seeing that he often speaks of his own
academic performance with irony. He is capable of not knowing or forgetting the
names of foreign leaders. He can assert that Sweden does not have a military, safe then
to excuse himself. But it is not from these particulars that one judges a president of the
United States. Furthermore, that which the world doesn’t like convinces the majority
of Americans. For Bush, in the end, this is what counts.
An analysis sine ira et studio of the Bushian trajectory must therefore equally
avoid facile irony and ingenuous enthusiasm. This pertains both to the awkward
televised address of September 11, 2001, when the president overwhelmed by shock
seemed unable to explain to himself and to his people what had happened and how one
had to react, and to the proud claim of the “resounding success” of the first Iraqi
elections, that shines a new light on the Mesopotamian expedition.
1
D. FRUM, The Right Man, New York 2003, Random House, p. 3.
2
R. SUSKIND, “Without a Doubt”, The New York Times, 10/17/2004.
97
Before perusing Bush’s agenda, another warning. More than any other political
figure, the president of the United States lives in a world of his own. In his own way.
Bush detests the stile of his predecessor. Clinton had transformed the White House into
a sort of campus, where counselors and friends camped out till the morning hours,
casually debating how to cure the ills of the planet. The time for Bush’s agenda comes
in units of five minutes. There is no space for academic seminars. Nor for oblique,
unconventional minds. Explains the president: “Many say that I’m wrong, I know. I
presume I’m right.”3
To take the temperature of the Oval Office, it is convenient to listen to the
lesson imparted by an influential counselor of Bush’s to the journalist Ron Suskind:
“People like you live in what we call the community based on reality”, where one
mistakenly believes “that solutions emerge from a careful study of a comprehensible
reality. Today the world no longer functions like that. Now we are an empire. And
while we act, we create our reality. And while you carefully study that reality, we act
again, producing a new reality, that you can study…We are the actors of history. And it
remains to you, to all of you, to study it.”4
Bush knows where history goes because he makes it. In the inaugural speech
for his second term, this trust is expressed in messianic tones: “History has a visible
direction, fixed by liberty and by the Author of liberty.”5 To confound the skeptics,
critics and adversaries—almost half of America and a great part of world public
opinion—he chose a solemn and inspired register, in the purest tradition of American
idealism. Leaving aside the rhetoric of the occasion and the narcissism of his
speechwriters, Bush is suited to take it seriously because he believes in what he says.
The question is how to bring his profession of faith back to earth. How to translate the
vision into an agenda.
As far as domestic priorities are concerned—from the radical privatization of
social security to further tax cuts, from the reduction of the twin deficits (the budget
and balance of payments) to the emphasis on nuclear energy—we can put forth some
formal criteria for evaluating their gradual progress or failure. But for the American
mission in the world? If the United States pursues “the ultimate aim of eliminating
tyranny in our world”, defined as the “work of generations”6, our grandchildren’s
grandchildren will be able to devote themselves to judging Bush. Richard N. Haass,
recently returned to the “community based on reality” after a stint among the “creators
of reality” in Powell’s State Department, has observed that “liberty is not a doctrine of
foreign policy”.7
3
J. D. MCKINNON, CH. COOPER, “Bush Will “Lead” Drive for Changes to Social Security”, The
Wall Street
Journal, 1/11/2005.
4
R. SUSKIND, op. cit.
5
Cfr. the text of Bush’s inaugural speech for his second term at http://www.whitehouse.
gov/news/releases/2005/01/20050120-1.html
6
Ibid.
7
R. N. HAASS, “Freedom Is Not a Doctrine”, The Washington Post, 24/1/2005.
98
Haass’ criticism may seem pertinent. But it is intrinsic to a classic, moderate

vision of politics and its aims. It misses the revolutionary heart of Bush’s thought.
Perhaps he may not have studied Marx’s eleventh thesis on Feuerbach, but this
president is convinced that the world is to be changed, not studied. America was
founded on the idea of the perfectibility of man, on the diffusion of liberty and
democracy as precursors to peace. If it abjured this idea, it would cease to be America.
Or at least that America which Jefferson assigned the goal of the “Empire of Liberty”.
And that for Bush is “an active force for good in the world.”8
Not all the leaders of the United States have been married to such a vision, and
none have been immune from the temptations and the necessities of pragmatism.
Even Bush counts on his “sons of bitches” (Musharraf, Abdallah or Mubarak, in some
measure Putin and Hu Jintao) to support the national interests and win the war on
terrorism. But when he evokes a world revolution in the name of American values,
we should not doubt his sincerity.
2. And nonetheless, since politics is not measured by intentions but by their

consequences, it is worthwhile to shift our attention from the president to the historical
environment in which he operates. We will thus attempt to interpret Bush’s vision,
bringing it back into time and space. Only in this way will we be able to get an idea of
Bush’s geopolitical agenda. And to what degree he will be able to realize it. Lets
consider the internal front first.
This is not really Bush’s second, but his third term. The first lasted from
January 20, to September 11, 2001. Made president by an election that many of his
compatriots considered illegitimate, jeered at by the intelligentsia and the
establishment’s media figures. The second begins with the president in flight in the
skies of an America under attack, culminates in the Afghan and Iraq campaigns, and
ends with the clear victory over John Kerry in the November 2004 elections. The third,
just begun, will determine if Bush will be remembered for verbal gaffes and bellicose
adventurism or if instead he will have earned a place in the gallery of great American
presidents as the victorious commander-in-chief of the war on terrorism.
But Bush’s last term will be divided in two. In the first half, until the midterm
congressional elections, the president will be at the peak of his powers. In the second,
however the 2006 vote goes, Bush will be a “lame duck”, above all because the
American political arena will be focused on the choice of a successor. To the time
restraint factor, one adds the divergence of interests between a president that cannot be
reelected and Republican congressmen who certainly wish to be. Already now some in
the Senate and the House have distanced themselves from the White House’s projects
for social security reform and immigration.
To avoid being stifled by the brief time left to him and by politique politicienne,
Bush has restructured his administration according to the principle of homogeneity.
After having faithfully carried out a strategy of which he was never convinced, Colin
8
Thus in his “State of the Union Address”, Washington, 2/2/2005, in http://www.whitehouse.gov/
news/releases/2005/02/20050202-11.html
99
Powell has left the State Department. In his place Condoleezza Rice, intimate of the
president, who in fact will continue to watch over the National Security Council, left to
her former assistant, Stephen Hadley. Dick Cheney remains the “second number one”,
even if he is not the shadow president that many paint him as. As far as the
neoconservatives, maximum ideologues of the war on terror as global democratic
revolution, are concerned, their influence in the administration will largely depend on
the Iraqi experiment. Moreover each neocon is by now on his own. It takes all the
anti-American fantasies of the conspiracy theorists to represent those ex-liberals as an
omnipotent cabal. Their mentor in the administration, Deputy Secretary of Defense
Paul Wolfowitz, has seen his aspirations for a more relevant task frustrated. The
retiring of Powell and the enlargement of the Pentagon’s sphere of influence in the
intelligence field, to the detriment of a reorganized CIA, instead enlarge the space to
maneuver for Donald Rumsfeld, having miraculously survived the shame of Abu
Ghraib. In sum, Bush’s second government is much more Bushian than the first.
3. The president’s strategic objective is to render America more independent from

the world because the world has been revealed to be terribly dangerous for America.
On September 11th, the United States were found to be vulnerable to that Muslim
fanaticism that had served to deliver a death blow to the Soviet Union. Bush is
convinced that America was attacked because it was too weak towards the jihadists.
The war on terrorism is above all an exhibition of force and determination to
discourage an enemy that could strike again and with any means, including weapons of
mass destruction. It is furthermore intended to reaffirm the global leadership of the
United States over a new world, ideally redrawn in its own image and likeness.
The most recent Bush reinterprets the war on terrorism as a war for liberty and
democracy. Because he believes it, of course. But above all because only in this way
can he win it. Or at least declare victory. Exalting the Afghan, Palestinian and
especially the Iraqi vote. But also the Ukrainian one, preceded by the “rose revolution”
in Georgia. And hoping that soon it will touch Cuba or other “outposts of tyranny”.
In the now famous confidential memorandum of October 16, 2003, Rumsfeld
admitted: “We don’t have a measure for determining if we are winning or losing the
global war on terror.”9 Bush himself, in a moment of distraction, confessed on August
30, 2004 that this war “cannot be won”.10 In a strict sense, it is true: terrorism is a
method exercised by homo sapiens since the dawn of mankind, and under every sky.
To extirpate the ideology and the practice of terror is utopia. A president that
proclaimed victory in the conflict against terrorism would risk being refuted in that
same moment by a fanatic’s bomb. But if the emphasis no longer falls on the
calculation of terrorists captured or killed, on the Madrassas of anti-Western hate
9
Cfr. the internal letter on the “Global War on Terrorism” addressed 10/16/2003 from the Secretary of
Defense to his closest civilian and military colleagues (Paul Wolfowitz, Doug Feith and Generals Dick
Myers and Pete Pace), then leaked to the press.
10
Cfr. B. KNOWLTON, “Conventions Opens in Shadow of 9/11”, International Herald Tribune,
8/31/2004.
100
closed or opened, on the fields of training jihadists cleared or replanted —and

especially not on the list of fallen Americans—everything changes.
Bush has found the right measure— or rather the golden section that escaped
Rumsfeld. The measure of success or defeat must be the advance or retreat of liberty in
the world. If liberty is the secret plan of history—and the president, like many of his
countrymen, is absolutely convinced of it—we can follow its progress and temporary
defeats step by step across the planet. Like the work annually produced by Freedom
House (see map) and baptized, with tasteful British understatement, “Map of Liberty”.
Here are mapped out the 88 “free”, 55 “partially free” and 49 “not free” countries of
the world, updated in 2003. Ten years earlier, 72 states inhabited “paradise”, 53
“purgatory” and 49 the “inferno”. Bush may hope that in January 2009, when he
departs the Oval Office, the banners of liberty on the last edition of the Map will be all
the more numerous. If then the “ally” Saudi Arabia still figures among the
supervillains, in the company of North Korea, Iran or Syria—patience (see table).
The president has decided that the American sphere of influence is the whole
world. A world to redeem, in the tracks of the great universalist presidents Wilson and
Reagan. Bush things that he has thus distilled the perfect formula, a balanced blend of
idealism and pragmatism: “The survival of liberty in our land increasingly depends on
the success of liberty in other lands. The best hope for peace in our world is the
expansion of freedom in all the world.”11 Besides, liberty and democracy being
relative and always debatable concepts, such a program presents the added advantage
of not exposing itself to refutation (Bush must have read his Popper).
If for example in the Greater Middle East—at once the major front of the war
against the jihadists and the laboratory of democratization of the Islamic
archipelago—the window of opportunity opened by the Iraqi vote were to close, the
White House could still point out that in the season of the “war on terror” and the
missionary impulse, America remains number one, apparently without rivals. Europe
is neither a great resource nor a great problem, and then it is divided, with a vast
pro-American periphery that surrounds a skeptical central Hispano-Franco-German
nucleus, reluctant but above all sterile. In Russia, the “friend” Putin must learn to
behave himself, but he fails each time he attempts to reassert his preeminence over the
“near abroad” or even just to halt the advance of Nato (read: America) in the heart of
his former empire. China is growing, but its economy is tied tightly to that of America,
which harbors spontaneous admiration for its model of development. If its ambitions
go too far, it will end up clashing with India, which has just begun the climb to the
high levels of power, and with Japan, thus confirming the US in the role as arbitrator
of the Asian equilibrium.
As far as international organizations are concerned, they are floundering (UN)
or tamed (IMF). America does not recognize the right of veto over its vital interests.
It is not sufficiently hypocritical to evoke an international order higher than its own
sovereignty, as do the Europeans and the other secondary powers that would like to
use it to contain the great strength of the US. The White House imagines, if anything, a
11
Cfr. Bush’s second inaugural speech, 1/20/2005, cit.
101
“League of Democracies” in place of the obsolete and unreliable United Nations.

From the heavens of grand principles, clear and concrete advantages for the
sole superpower descend to earth. This at least is Bush’s firm conviction. But is it
really the case? Lets try to probe the foundation of American power, to verify its
solidity. And lets hold fast to Rice’s counsel: “To determine if the course is right, I will
never forget that the true measure is in its efficacy.”12
4. The three decisive components for evaluating the effectiveness of the White
House’s agenda are: the economy, military power and influence (soft power). The
stronger and more autonomous America is in each of these fields, all intimately
connected, the greater the hopes of success for the third Bush.
Economy. The United States grows at, for us, enviable rates (4.4% in 2004).
But the boom is the child of public spending to the stars, also in the cause of a war that
costs more than presupposed (200 billion dollars for Afghanistan and Iraq, according
to official estimates surely to fall). The growth requires robust injections of foreign
resources, to sustain the internal demand. From here the colossal foreign
debt—projected to break the ceiling of 8 trillion dollars, with a loss of balance of
payments that last year superseded 650 billion dollars—that parallels the public deficit
(413 billion). American depends therefore on credit supplied by the rest of the planet,
especially Asia. Approximately 58% of American public bonds is in Asian hands,
particularly Japanese and Chinese, attracted by the American consumer market and by
protection (Japan) or US strategic threat (China). But this unbalanced interdependence,
aided by a policy of weakening the American currency to secure the dollar standard,
triggers a latent crisis for the US development model that neither Bush nor Greenspan
can manage by themselves. For example, the implosion of the Chinese banking system
and/or the necessity for Japan to confront the consequences of its aging population by
bringing home the capital currently flowing towards the US are two not immediate but
impending probabilities (see Martino Dolfini’s article).
In the energy field as well, America is discovering that it is no more able to
determine its own destiny. In less than ten years the United States have passed from
the rank of principle oil producer in front of Russia and Saudi Arabia, to having the
primary negative balance as largest importer (in the future for gas as well). The logic
of the great companies, sustained by the government, remains to procure abroad that
which is not profitable to produce at home or that cannot be found there. But in recent
years, while fishing for energy in the world sheltered by the vast American security
network, the major corporations run into new and seasoned rivals. From China to India
to the Russia under a supposedly tamed Putin, the competition knows neither certain
rules nor secure friends. Besides, owing to the speculation and geopolitical instability
that America has contributed to, energy prices are growing beyond the threshold of
international market control. In a similar vein the contractual power of the United
States, identified with its companies, appears redefined.
12
Cfr. R. COHEN, “Bush’s Smiles Meet Some Frowns in Europe”, The New York Times, 1/22/2005.
102
Armed Forces. American arms serve to protect the security of the nation and to
perpetuate the flow of external resources. Thus a kind of “empire on credit” founded
on extraordinary military power and the hegemony of the dollar. One sustains the other.
Contrary to classical empires, American is not inclined to territorial expansion because
such is not the root of its power.13
But how much is the American war machine really worth? Before the coming
of Bush, the picture was not encouraging. In the eyes of the jihadists, rather,
Washington appeared quite irresolute in the use of the force—from the retreat of US
troops from Beirut called by Reagan after the bombing of the embassy (1983) to the
less decorous flight from Somalia undertaken by Clinton ten years ago, followed by
pinpricks in response to jihadist attacks in Africa and the Middle East, among which
the attack on the U.S.S. Cole (October 12, 2000). Not to speak of the incomplete
missions in the Balkans that have left Europe with several jihadist cells still entrenched
in Bosnia (and not only there).
What use are the armed forces if they cannot win wars? Afghanistan and Iraq
would have had to overturn such perceptions. In the first case, Bush has achieved a
moderate success: the Taliban regime was knocked down and Osama’s bases destroyed.
But it was a sledgehammer blow to a nest of wasps. Some are holed up in Pakistan, in
Iran or elsewhere; others fight US soldiers in Iraq. Meanwhile Karzai, however
legitimated by the vote, remains the mayor of Kabul. In Iraq, as we will see later on,
we are still wading through, despite the relative success of the elections of Jan. 30th.
If before the Iraq campaign had 752 bases installed in 130 countries14, the
attrition of the war and imperial overextension forces the United States to recruit new
troops. Thus confirming that even the US armed forces need partners. As the analyst
George Friedman observed: “The United States don’t fight alone. They fight with
coalition partners, which are either indigenous forces or nation-states. The reason is
demographic. The US is always overwhelmed when it fights on the Eurasian
continental mass. Technology alone is not enough to make up the difference.”15 Now
the “indigenous forces” (mujahadeen in Bosnia, KLA guerillas in Kosovo, Northern
Alliance in Afghanistan, Kurdish peshmerga in Iraq) are joined by private soldiers,
trained by retired Pentagon officials. State partners, indigenous troops, or private
warriors are useful to limit losses and prevent the costs of the campaign from falling
entirely on the Americans shoulders.
Influence. In general, those who don’t have too much hard power—as is the
case with us Italians—tend to like soft power. It is a rather mysterious object. For
Joseph Nye, one of its American theorists, it approaches the Gramscian concept of
hegemony. In plain words: “If I am able to find a way to make you want what I want,
13
Cfr. the volume of Limes, “L’impero senza impero”, n. 2/2004.
14
N. FERGUSON, Colossus. The Fall and Rise of the American Empire, London 2004, Allen Lane, p.
16.
15
G. FRIEDMAN, The Secret War, New York 2004, Doubleday, pp. 85-86.
103
then I don’t have to force you” to do something.16 Saving time, effort and money.
In Bush’s first four years America has demonstrated a dramatic and surprising
lack of soft power. Didn’t the critics of globalization—supposing that this term means
anything—explain that such a presumed universal law of our time was only the Trojan
Horse of Americanization? And that the internet is its instrument of occult persuasion?
And yet the “globalized” world has not become more American. If anything America
is each day becoming more global to the point of provoking the alarm of those who
fear the decomposition of the national fabric, corroded by ethnic diversification.17
More than foreign restraints on economic growth and limits on its military
power, America should fear its declining appeal. As all the surveys reveal, the
superpower’s popularity is somewhat low abroad. The concrete fallout is very serious
both in terms of “made in the USA”—American brands suffer in hostile cultures—and
especially regarding the power of coalition for the only superpower.
Bush may shrug his shoulders and make light of it, convinced that “America is
America”. But if there is even a grain of truth in the analysis of the growing
dependence of the “indispensable nation” (Madeleine Albright); if the prosperity,
security and power of the United States are largely in other people’s hands; and if these
hands are less and less friendly, then this is something to be concerned about. The
empire without hegemony will not function for long.
The immutable premise of the world revolution foretold by Bush is that the
peoples of the planet listen to the voice of America. In many cases, this is not so.
Thus why Bush’s (and Rice’s) new agenda highlights the significance of public
diplomacy. Synonymous with dear old propaganda—or at times with the
dezinformacija at which the USSR was the master. The thesis is that if others knew
Americans as they believe themselves to be, they would love them. The problem is not
the message but the inability to broadcast it in an agreeable way to the world’s ears.
This has yet to be demonstrated. Together with the emphasis on the use of force, the
faith in propaganda and the propaganda of faith signals a curious American tendency
to reproduce Soviet schemes.18 Hence losing ones.
5. If America’s sphere of influence is the whole world, no one else has a right to a
sphere of influence. Consequently, from the American point of view the allies should
take some of the burden of the war upon themselves without contributing to directing
it or trying to maneuver for geopolitical advantage. Or else get out of the way. The was
Bush’s disposition immediately after the jihadist attack on the Twin Towers and the
Pentagon: “To a certain point [of the war, ed.] we could remain alone. For me it’s not a
problem. We’re America.”19 We do not know if the president has changed his mind.
Of course the facts would imply that not even Washington can go it alone. And
publicly the president appears more ecumenical, less stingy with recognition (perhaps
16
J.S. NYE jr., The Paradox of American Power, Oxford 2002, Oxford University Press, p. 9.
17
Cfr. S. HUNTINGTON, Who Are We?, America’s Great Debate, London 2004, Free Press, p. 251.
18
Cfr. M. LIND, “How the US became the world’s dispensable nation”, Financial Times, 1/24/2005.
19
B. WOODWARD, Bush at War, New York 2002, Simon & Schuster, p. 81.
104
ironical) towards the Europeans. But if the “friends and allies”—however one wishes
to interpret this slogan—hope that Bush goes beyond the diplomacy of the smile and
pat on the shoulder, they risk deluding themselves.
When supporting players and walk-ons feel backed into a corner by the lead
performer and they know they lack the power to challenge him, they have three
choices: a) to take time to build up their strength, pooling together their respective
resources as much as possible; b) gain leverage over the giant to utilize its force to
their own advantage; c) both strategies at once. The perception of an imperial America
is evoking old and new geopolitical counterforces. History teaches that each absolute
dominion provokes other poles of power to rise in reaction. But the challenge is
covered over by the war on terrorism, that everyone is free to interpret according to
their own interests. In fact, the war has an real and a metaphorical dimension. In the
second case it acts as a by now torn shroud, that allows flashes of the crucial
competition to seep through. That will determine if in the near future the United States
will remain the only superpower or something less.
In the decades to come, only two actors appear capable of challenging the
American colossus: China and Europe. The first hypothesis is rather concrete, the
second quite theoretical, though still studied by geopolitically misguided analysts
inside and outside the Bush administration.
Beijing has established a collaborative rapport with Moscow, from which it
acquires weapons able to strike the American Pacific fleet. Nor is the financing of 6
billion dollars with which Chinese banks helped Putin incorporate the best morsels of
Jukos, just snatched from the pro-American Khodorkovskij, into the state-owned oil
company Rosneft’ particularly agreeable for Washington. Moreover, China is
designing a vast Asian sphere of influence, at least up to where it does not encounter
the realm of Indian (Nepal, Myanmar) or Japanese (Taiwan, Eastern Chinese Sea,
Korean peninsula and the Sea of Japan) power. With Delhi and Tokyo the Chinese
could moreover contract provisional marriages of interest. Of course the gestation of
the free trade zone ASEAN+3, conceived by the Southeast Asian nations together with
China, Japan and South Korea, does not gladden the hearts of Americans.
Prospectively, the result could be the largest commercial bloc on the planet, bigger
than the European Union and Nafta.
As far as we are concerned, we confess that we can’t imagine that one might
see in the European Union a new geopolitical actor hostile to the US, based around a
Franco-German axis aligned with a Russia increasingly similar to a little USSR.
Such a likelihood could only derive from the anti-European paranoia of some
Americans, blinded by contempt for “Old Europe”. Moreover Bush seems decided to
prevent the transatlantic fracture from ending up translating European frustrations into
a challenge to America.
So today, in the world that matters the United States have just two declared and
dangerous enemies: Iran, most importantly, and then North Korea, associated by Rice
with Cuba, Myanmar, Byelorussia and Zimbabwe as “outposts of tyranny”. The North
Koreans are already in possession, so it would seem, of a small nuclear arsenal, while
the Persians are a few years away from the finish line (assuming that they haven’t
105
reached it already). If Bush aims to contain Pyongyang’s paleocommunists with the

arms of politics, he has not excluded the politics of arms against Tehran. Seen from
Washington, the Ayatollahs’ regime is almost evil incarnate: the worse enemy that
threatens to annihilate the best friend—Israel—with the atomic bomb. Unable to
invade Iran, it is not left to the US to bet on a coup d’etat or an air strike against
atomic sites, provided that the Israelis think to do it first. To imagine that they could
thus liquidate Iranian ambitions to acquire the Bomb seems risky. Tehran’s regimes
come and go, occasionally with the Americans’ help; the desire for nukes remains,
because it is the symbol that affirms Iran as the greatest Middle Eastern power.
Here emerges a specific contradiction of Bush’s agenda. Among the motives
that pushed him to attack Afghanistan and Iraq, one of the most important was the
assumption that among the possible targets, these occupied first and second place in
order of weakness. If Saddam had already possessed nuclear devices, perhaps the
Americans would not have attacked him, or they would have done it differently. The
message is clear: we can and will march against all tyrannies that threaten us, save
those endowed with the Bomb. Ergo, any self-respecting rogue state attempts to
secretly enter the atomic club, understood as a vaccine against a US-led preemptive
war. A vicious circle that enhances the threat of defeat. And narrows the choice to
surrender or war. In the first case Washington should resign itself to living in a very
dangerous world. In the second it should prepare itself for a series of preemptive
conflicts probably greater than the available resources.
For the United States the problem is not the possession of the Bomb in
itself—otherwise it should concern itself with its best friends, Israel included—but the
risk that it will fall into enemy hands. So Bush concedes to Brazil a program of
Uranium enrichment which it denies to Iran, convinced that the first will make a
civilian use out of it and the second will treat it as a nuclear deterrent. Probably.
But who can swear on the type of regime that will rule Brazil or Iran within twenty
years?
The effects of overexposure are witnessed even on the Iraqi front. Only the
myopia of professional anti-Americans can devalue the meaning of the elections. It
was felt loud and clear throughout the Greater Middle East, and it still resounds. And
Bush has availed himself of the opportunity to admonish the Saudi and Egyptian
“friends” to open themselves up to democracy. Meanwhile assuring the Middle Eastern
peoples that “the United States do have not the right nor the desire nor the intention of
imposing our form of government on anyone else”.20
It’s a long way to realize his desires, by which Iraq would be by now set on the
tracks of democracy, a beacon of liberty in the darkness of Middle Eastern regimes
(almost all as tyrannical as they are more or less tied to Washington).
Let us yet assume the best scenario: by the beginning of 2006 a united Iraq,
having approved the constitution by referendum, will have legitimated with a new vote
a government of a more or less Shiite character. It would allow Bush (and us) to bring
the troops home. On the ground the Americans would leave the necessary garrisons to
20
Cfr. the “State of the Union Address”, cit.
106
manage a few strategic bases, which the White House considers the spoils of war. Is all
well in the best of all possible Iraqs? Maybe. A weak, predominantly Shiite Iraq is
however Iran’s geopolitical priority. The Persian area of influence in the Gulf would
certainly be reinforced by it. Of course, the Iraqi Shiites are not assimilable to the
Iranians; the quietist hawza of Najaf is not the militant one of Qom. But the
pro-Iranian network in Shiite Iraq could incline Baghdad’s choices towards Tehran’s
interests. It would perhaps result in a domino effect not desired by the Americans.
The Iraqi example could threaten to inflame the Shiite communities of the region,
beginning with the Saudi-Arab ones, which lie on Riyadh’s richest oil reserves—a risk
Bush would prefer not to run, in times of energy prices outside his control.
While Bush could rightfully show pride for the Iraq vote—or rather, for the
Kurdish and Shiite vote in the Iraqi territories more or less controlled by the
coalition—from which Tehran hopes to pick the fruits, the ayatollahs did all they could
to widen their range of anti-Washington countermeasures. The terminals of the Persian
network by now reach Russia (weapons, nuclear technology, energy pipelines), China
and India (oil and gas), the France-Germany-Great Britain European triangle (whose
mediation in the Iran-America atomic querelle is obviously not free of charge), to the
point of entering the garden of the United States’ house, on the Southern costs of the
Caribbean Sea. Here one witnesses a significant China-Venzuela-Iran energy
triangulation. The United States’ greatest strategic competitor together with Castro’s
neo-Bolivarist friend and the most hardened power of the “axis of evil”: a truly lethal
cocktail. Beijing puts down money and agrees to a joint venture with Caracas to
furnish it with crude oil, but also for research and development of the Venezuelan
oilfields which Chavez made the major American companies vacate; Tehran offers the
technologies in which it is rich, in order to facilitate the ambition Chavist projects of
boosting oil production. The Iran-Venezuela agreement could delineate an
anti-American front in OPEC, intent on buying up energy in the garden of the
American house. Poor President Monroe is already rolling in his grave.
We don’t know where Bush keeps his agenda. However, we are certain that
many of its pages will be written by the rest of the world.
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CHINA-AMERICA THE GREAT GAME A VIEW FROM THE TRUMAN BALCONY:
THE SECOND TERM OF GEORGE W. BUSH
A VIEW FROM THE TRUMAN

BALCONY: THE SECOND TERM
OF GEORGE W. BUSH by John C. HULSMAN
An imaginary dialogue between the White House’s superstrategist, Karl Rove, and his
chief. A good dose of realism should temper the revolutionary leap of the neocon
agenda. A more democratic and less friendly Middle East?
Introduction: Time For A Private Chat
I t is January 5th in the District of Columbia. The temperature in Washington is
unseasonably mild, with a light rain wafting down. Congress has just gone out of
session until after the inaugural, scheduled for two weeks hence. The frantic pace that
is the norm for the adrenaline junkies of the Capitol city has slowed to a relative crawl.
It is likely to remain so until after the presidential swearing-in, when life will resume
its mad, but always-interesting pace. In such a rare lull, it would be entirely
unsurprising if George W. Bush summoned Karl Rove, the genius behind his
re-election victory, to the Presidential quarters for a long chat about what is to come.
Based upon what is within the realm of possibility, here is the best-case scenario for
what they might say, at least if I transmogrified into the shape of Karl Rove.
Real-world limitations
As Karl Rove settles himself in a comfy overstuffed empire-style armchair

looking out over the Truman balcony to the Jefferson Memorial, he begins, ‘Sir, we
are still on our way to restoring the dominance of the Republican Party in American
electoral politics, last seen in the belle époque era stretching from William McKinley
through the magical Theodore Roosevelt into the early 1930’s. We control the White
House, House of Representatives, Senate, Supreme Court, most of the governor’s
mansions, as well as the localities-a political grand slam. Worse for our Democratic
enemies, a few structural issues are really working against them. First, as Americans
continue to move south and west (note that the last elected president to claim to hail
from the east coast was Jack Kennedy in 1960) they become more patriotic, more
fiscally conservative, more religious, more worried about social and moral issues-in a
word they become more Republican. You won well over 85 of the fastest 100 growing
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counties in the country. Unless the Democrats figure out how to connect with people
not living on the coasts or the upper Great Lakes, they are toast.’
‘Second, the Democrats are still stung by the ghost of Vietnam-though not the
one Senator Kerry wasted so much time talking about. Since the turmoil of the late
60’s, voters have consistently favored a generic Republican candidate over a generic
Democratic candidate in terms of who can better deal with security issues. This
remains the case today. Apparently our opponents cannot shake their unserious, hippy
image, no matter how out of date such a stereotype may really be. This remained true
even during the Clinton years-however then security issues fell in voters import to
such an absurdly low level (as voters joined policy-makers in taking a holiday from
history) that this great problem of the latter stages of the Cold War could be easily
finessed. After al-Qaeda, after Afghanistan, after Iraq, and with Iran and North Korea
looming on the horizon, the Democrats’ problem has returned with a vengeance.
Unless they can quickly convince voters they have become grown-ups on matters of
national security, they are in for a long spell of opposition.’
The President smiled his lopsided grin, exclaiming, ‘Then we’ve got them on
the run.’ Rove nodded absent-mindedly, but without real enthusiasm. The President,
noticing, said sharply, ‘If all that you say is so, why the glum face?’ ‘Sir, the
ever-hopeless Democrats are not the problem…we are.’ The President’s smile faded,
he said somewhat dangerously, ‘What do you mean?’ Rove squirmed somewhat in his
comfortable chair but returned the President’s gaze steadily. He had won the right to
speak plainly, which was a trait George W. Bush deeply valued. ‘Well first, let’s take
the case of our incredibly ambitious second term agenda. Three major political fights
loom on the horizon, all of which will require a huge expenditure of political capital,
time, and effort-two of which will require an initial gigantic expenditure of money.
There will quite likely be a number of vacancies to the Supreme Court in the new
term-you have it in your power to dramatically influence the direction of America for
the better part of the next quarter century by appointing young, conservative justices.
The democrats know this as well as we do-there will be blood on the carpet over this.’
‘Reform of Social Security, a crown jewel of the New Deal, will likewise be
incredibly contentious. Also while in the long run such a policy makes fiscal sense,
reform costs will be immense up-front. A fundamental reform of the incredibly
over-complicated tax code will also require huge start-up costs. This is the ground we
have chosen to stand upon, in terms of both securing your historical legacy as well as
cementing Republican political dominance well into the future. It is a bold, exciting,
worthy program. But it will take all that we have to accomplish. That sharply limits
what we can do abroad.’
‘Second, Iraq, as of February 2005, will have cost the American taxpayer $200
billion, with the meter running. While America’s debt to GDP ratio is much lower than
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that of our European and Japanese allies, obviously spending this kind of money limits
what else we can do abroad, to say nothing of the tragic loss of lives. We have 150,00
troops in Iraq at present, and our Army and units of the National Guard are seriously
overstretched. With the election of an Iraqi government, however imperfectly arrived
at, we should expedite our transition out of Baghdad. Even with this, we will be very
involved there for much of your term, like it or not, and I don’t.’
‘Third, as Macmillan put it to JFK about what worried him, ‘Events, dear boy,
events.’ Radical Islam, as illustrated in Madrid, remains a primary security threat to
the west. Containing the spread of nuclear weapons to fundamentally unfriendly states
such as Iran and North Korea will be issues that come to a head during the term. Iraq,
al-Qaeda, Iran, North Korea. We have four primary security threats to the United
States readily apparent-and I haven’t even begun to assess major geopolitical shifts
such as the rise of China. Our plate is full.’
The President, ruminating softly said, ‘so here we find ourselves with a
neo-conservative victory, while living in an undeniably realist world.’ Rove unfazed,
grinned and said, ‘Exactly.”
A second term foreign policy agenda
1. Concentrate on the war on terror
So the President asked the only question ever asked of an expert by a

policy-maker, ‘What do you want me to do, boy genius?’ Rove blushed at the
President’s mentioning his nickname, and replied, ‘First we have to set real priorities.
Fighting and winning the War on Terror should be our primary Foreign Policy
objective. To do this, we have to define in much greater detail what we are talking
about. We are not fighting a war, as Wilsonians in the Democratic Party would have us
do, against evil in the hearts of men everywhere. As good conservatives we know such
a war is unwinnable; worse, such a characterization does not differentiate between
primary and tertiary American interests-overstretch and ultimately the decline of the
United States as a great power is bound to follow such a strategy of tilting at windmills.
Specifically, we are fighting al-Qaeda and other manifestations of radical Islam. So far
there is good news and bad news here. The first term saw significant American
successes in this war. If al-Qaeda was then best thought of as an evil multinational, we
have destroyed the home office (Afghanistan), obliterated its most faithful sponsor (the
Taliban), cut its funding (speculatively somewhere in the neighborhood of 15 percent),
and killed, captured, and set to flight around three-quarters of its senior leadership,’
‘Not too shabby,’ the President grimly replied, ‘what’s the bad news?’ ‘Just as
our efforts to combat al-Qaeda have evolved, so its efforts to survive have led to its
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own continued evolution as an organization. Call this the political equivalent of

Darwin’s theory. Al-Qaeda’s home office may have been hit, but the branch offices
around the world have shown themselves quite capable of continuing to function, be it
through bombings in Bali, Istanbul, Riyadh, or Madrid. Worse, without central control,
it is much harder to fathom the local motivations behind al-Qaeda’s branch offices,
making analysis and detection far harder.’ ‘
‘Al-Qaeda now functions as something more akin to a grant organization. Local

groups with only the most tenuous ties to bin Laden contact al-Qaeda representatives
with a plan that will advance interests the two groups hold in common. In the case of
Spain, radical Islamists from neighboring Morocco provided many of the foot soldiers
for the Atocha bombings-others from the Maghreb were involved as well. They went
to al-Qaeda for help with financing, logistics, planning, and permission to use the
feared al-Qaeda brand (naming themselves as part of the organization), much as any
grantee would go to a donor for resources. In return, al-Qaeda reminded people of its
relevance with its attack on a western, first-world country, and of its savvy,
unquestionably the outrage helped determine the result of the Spanish election,
throwing out the party of our friend Mr. Aznar.’ ‘Don’t remind me,’ the President said
tersely. Rove went on, ‘as our abilities have evolved, sadly so have theirs. For all our
successes al-Qaeda is more diffuse, harder to detect, and, in many ways harder to deal
with. Like Hercules cutting off the head of the hydra, two seem to have sprouted in its
place.’ The President absentmindedly responded, ‘What’s the second head?’
Rove answered somberly, ‘recruitment. As Don Rumsfeld mentioned around a

year ago, while al-Qaeda, as it was is practical terms not the specific threat it once was,
the broader situation is worse. Or as Don put it, ‘for every al-Qaeda operative we
destroy if five young men emerge from a Madrass sworn enemies of America,
determined to do violence to the country and its allies, are we really winning the war
on terror?’’ ‘Good question,’ the President answered gloomily. Rove finished, ‘that is
the problem. Radical Islam, as best we can measure it, is growing, even as al-Qaeda as
it was is waning. Its future as an evil grant organization perfectly fits with this reality.
We must quickly evolve as well.’
2. Other primary interests (Iran, North Korea, Russia, China, and Iraq) must be
addressed
Emboldened, Rove went on, ‘Second, we have to very quickly think our way
through a large number of pressing foreign policy issues, some of which will come to a
head right away and others of which will help shape our legacy. Iraq we have already
talked about. The key conceptual challenge will be not letting it swallow the rest of the
larger agenda.’
‘Iran is probably the single biggest crisis looming on the horizon. At the end of
the first term, the Big Three in Europe (UK, France, Germany) were doing a pretty
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good impression of Neville Chamberlain, agreeing to bogus deals with the Iranians not
worth the paper they were printed on due to a complete lack of diplomatic sticks to go
with the economic carrots they were offering Tehran.’ The President laughed, but
Rove cautioned, ‘before we get too superior our approach was even worse. Having
discovered evil in the world we decided we didn’t want to negotiate with it. I always
assumed diplomacy was about talking to people you didn’t agree with-otherwise we’d
be spending a lot of time chatting with Canada.’ The President got angry, ‘by talking
to the Mullahs you are conferring a dignity on them they don’t deserve and betraying
those fighting for democracy in Iran.’
Rove knew he had to be careful. Speaking quickly and softly he said, ‘but
you’ve hit on the problem of our democracy as panacea first-term policy. The dirty
little secret is that what we have in Iran is a problem of Persian nationalism-both the
students and the mullahs favor developing a bomb. I doubt Israel would be placated if
Iranian democrats, still presumably virulently anti-Israel, came to power with a nuclear
capability.’ ‘So what should we do?’ Rove said, ‘the only option is to coordinate with
the Europeans.’ The President moaned. Rove hurried on, ‘yes, I know I’d rather have a
root canal as well, but it’s the only way. They must be willing to discuss real sticks if
the Iranians continue to cheat and try to develop a full nuclear fuel cycle. But we must
also be willing to discuss carrots, such as diplomatic recognition, a non-aggression
pact, and economic inducements if progress is to be made. Only by having a balanced,
coordinated diplomatic approach is there a way around what could be shaping up as a
catastrophic military confrontation. Without a complete change in policy such a crisis
is inevitable.’
‘While we are discussing headaches, what about North Korea?’ the President
asked. ‘Here China holds the key. We have to convince the new regime of Hu Jintao
that China’s interests really do dovetail with ours in the short-term. For we are in a
position to trade nightmares in the Korean peninsula. Our nightmare is a
nuclear-armed Pyongyang, with the ability to proliferate such technologies. China’s
nightmare is a nuclear arms race in East Asia. We must convince Beijing one
nightmare leads to the other. If we fail in deterring further North Korean proliferation,
how long will it take Australia, Japan, South Korea, and yes, Taiwan to acquire nukes?
But China, which accounts for the vast percentage of North Korea’s home-heating fuel,
is the only country with real leverage over Pyongyang. So far, they have been reluctant
to use it, fearing the implosion of Kim Jong-Il’s regime, the refugee crisis it would
foist on China, and the loss of power South Korea taking over the north would signal
for Beijing. Through quiet, secret diplomacy we must convince China to work with us,
as the alternative, for them as well as us, is far worse.’
‘The two longer-term geopolitical assessments follow from this. We must first
get over our romantic attachment to the immediate viability of Russian democracy and
instead focus on working with Russia on the war on terror, seeing that Russian
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pipelines flow toward Japan and not China (with the oil eventually reaching the west
coast), WMD issues, and integrating Moscow as firmly toward us as possible.’
‘What?” the President almost yelled. ‘I’m not saying we should give up on our
goal of democratizing Russia. I’m just saying the romantic feelings we’ve had for the
survival of the Gorbachev, Yeltsin, and even Putin regimes has entirely missed the
boat. Russia is a complicated country of over a dozen time zones-its political and
economic development is not about the whims of any one leader, however powerful.’
Now it was time for the President to blush, ‘you mean I shouldn’t have talked about
looking into Putin’s eyes?’ ‘Eh…yes.’ Rove was glad to see the President was
laughing. ‘We should not give up on democracy in Russia. We should, however, not
let this get in the way of the huge agenda we have with Moscow-an agenda where our
interests line up quite well. In the end by working more with the Kremlin we will have
a better chance of influencing democratic outcomes than by scolding them for not
electing people associated with the thievery of the Yeltsin era. But in the end, let’s, as
you once said, show some humility here. Its up to the Russians to determine what sort
of Russia emerges. We matter only at the edges.’
‘Anything else?’ the President asked, sarcastically. Rove pretended not to

notice. ‘Well, yes…China. In the long-term, this is probably as important as anything
other than perhaps the war on terror. In its guise as rising power, Beijing is tacitly
signaling that it knows in the long-run Sino-American interests don’t line up well-it
wants to dominate its region, an area where we are now first among equals. However,
geopolitically we will have real opportunity to see that China remains a status quo
power rather than becoming America’s primary rival.’ ‘How?’ ‘By making the price of
challenging us higher, both positively and negatively.’
‘Positively, by locking China through its WTO membership into the world
economic order, making it live up to its commitments, but also making it see the
benefits of working cooperatively through trade with the West in general and the
United States in particular. Conflict in the region would put all this in peril. Negatively,
by bolstering already well established economic and military ties with regional powers
such as Australia, Japan, and South Korea and by playing the India card. Establishing
far closer ties with New Delhi is perhaps one of the biggest prizes of American victory
in the Cold War. India will soon be the most populous country in the world. It is a
democracy, albeit a fractious sort of one. It has embarked on a genuine course of
economic liberalization, which is enriching it at a dramatic rate. Critically, it has a
long history of antagonism with China for leadership of its region. In an interest-based
way, be the angle geopolitical, economic, or military, India seems ripe for the plucking
as a new major American ally. By ringing China with this array of countries, the
penalty for their trying to dominate the region grows exponentially. That’s all we can
hope for.’
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Conclusion-Nation-building: A Bridge too far
The rain had let up and the President was getting antsy. ‘Well, Karl thanks for
the input. I’ll think over what you said and we can get going on some of this.’ ‘One
thing more, sir.’ Now the President was exasperated, ‘Yeah?” Rove responded meekly,
‘Is there any chance that we can abandon, after top-down nation-building efforts have
failed in Haiti, Somalia, Bosnia, Kosovo, Afghanistan, and Iraq, the idea that imposing
democracy works? Such a policy assumes history, culture, religion, and ethnicity
(forces that have built up over millennia) can be ignored in a one-size-fits-all manner.
And that such an outcome can happen in a hurry, say the next four years? Let’s take
the Middle East as an example. The dirty little secret of the region is that the corrupt,
unrepresentative leadership of the region is far more pro-American than the Arab street.
If we could flick a light-switch and produce democracy there, radical Islamists would
take over in Algeria, Mohammed V of Morocco would fall, as would King Abdullah
of Jordan, even more radical Wahabists (and far more anti-American) would run Saudi
Arabia, and God knows what kind of pro-bin Laden outfit would run Pakistan. Surely
that is not the world anyone could want in Washington.’ Rove saw that he had gone
too far. The President responded merely by saying a quiet, ‘I think we are done,’ as the
senior political adviser left the Truman balcony.
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CHINA-AMERICA THE GREAT GAME LIVING WITHOUT EUROPE
LIVING WITHOUT EUROPE by David POLANSKY
Seen from Washington, the Old Continent is not a problem. The transatlantic tension is
not a question of tone or language, but of diverging interests. The Euro-Arab
rapprochement is a risk for America. The unheard lesson of Henry Kissinger.
E urope is arguably the least geopolitical

factor in American foreign policy. This can be understood in one of two ways, both
interconnected. First, American primary national interests are less engaged by Europe
than by nearly any other major area of the globe. Second, what interests that exist are
largely subsumed in a strange tangle of philosophical and emotional ties that tend to resist
a straightforward analysis of policy concerns.
Any discussion of America’s strategic view of Europe must begin by noting that
the transatlantic relationship is now undergoing a decisive transformation that many have
attributed to the aftermath of September 11th, but is more the result of policy and rhetoric
finally catching up to the changes that have occurred in the world since the end of the
Cold War.
It is somewhat unfortunate that these realities now been (too harshly) illuminated
by the dominant personalities on both sides of the Atlantic today. Against the American
side, much is made of the so-called neoconservative ideologues pursuing unilateralist
policies of American aggrandizement. Against the European side it is fashionable to speak
of neo-Gaullists seeking to use the European Union to balance the American superpower.
In other words, recent transatlantic developments have been passed off as the result
of intransigence and unreasonableness on the part of certain Americans and Europeans
(when they are not simply passed off as being the result entirely of the actions of
Americans on the one side or entirely of Europeans on the other). The assumption then for
many is that much can be resolved between America and Europe by an increased
willingness to cooperate on both sides of the Atlantic. Such a renewed collaboration
would be the basis for confronting myriad issues throughout the world. This has it exactly
backwards. It is the issues themselves that present the problem for the alliance. While the
tone of the disputes has been heated, even childish, the differences that spark them are
real; they are the result of disparate worldviews and interests.
Nor is this simply the result of overconfidence on the part of American statesmen
who believe that they can accomplish US aims without resorting to troublesome
diplomacy. To see this clearly one might try a brief thought experiment: leaving aside the
rhetoric, imagine that Bush is not the caricatured ideological unilateralist but simply a
ruthless pragmatist. He is prepared to carefully manage relations with China and Russia
despite the fact that neither conform well to his espoused democratic principles. He has
worked in concert with the East Asian powers in trying to leverage the North Korea issue.
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Relations with Japan are stronger than they have been in years. He is balancing relations
with Pakistan and India, which is no mean feat. He has even expanded American aid to
Africa beyond what Clinton was prepared to give. In other words, Bush is prepared to
work in tandem with other powers where it suits American interests.
Above all, the Bush administration is reacting to geopolitical changes that in fact
have little to do directly with the transatlantic relationship. Nothing can now change the
simple fact that the balance of power in the world is shifting inexorably towards Asia.
Simply put, Americans have more to hope for and more to fear from other parts of the
world.
So what, if anything, is the American policy towards Europe itself? Secretary
Rumsfeld’s comments regarding “Old” and “New” Europe may have seemed to represent
the basis for a new strategic approach towards Europe. In short: isolate the core and
engage the periphery.
This was more or less based on the assumption that—on foreign policy matters at
least—a two-track Europe was emerging, with the Franco-German core and probably the
Benelux countries as well rallying the continental opposition, alongside a more
pro-American periphery in the Mediterranean and former Soviet bloc countries of Eastern
Europe, from which a pool of ready allies could be drawn. This account was bolstered by
the support pledged by Spain, Italy and the so-called Vilnius 8 during the run-up to the
Iraq War. However, those nations that supported the war all faced strong internal
opposition, particularly among the younger generation, which has little if any memory of
communism and hence is more likely to view the US as imperium rather than liberator.
Furthermore, those continental allies that assisted the US were only able to provide
minimal assistance in terms of putting boots on the ground. It was their show of support
more than their actual support that came to be desired. Thus, allies are reduced to an
abstraction, used more as evidence of the legitimacy of US undertakings than as actual
tools to advance American interests.
This outcome of America’s diplomatic initiatives in Europe prior to the Iraq war
was less the result, I think, of a deliberate strategy than of certain unconsidered
assumptions on the part of the administration, and to a larger extent on the part of many
Americans since the end of the Cold War. The major assumption was that European
nations would continue to assist the US on an individual basis, out of specific interests, or
more broadly because they favor the stability granted by an American-led world order.
Thus, the US will be able to “cherry-pick” its allies at will. However, this assumes that
other nations will remain more or less independent actors. In fact, their ties to America are
essentially tenuous and growing more so as European integration continues apace.
While there is little reason to believe that such integration will manage to forge a common
foreign policy, it can certainly hamper the US bid for continental allies in its future
endeavors.
In the end the EU has far more to offer—or at least is far more prepared to
offer—those nations politically and economically than the US. As the Economist recently
pointed out of what had been America’s staunchest European continental ally during the
war, “After grumbling furiously about dangers to their sovereignty and their social values
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when they joined the European Union in May, Poles are discovering themselves now to be
among the Union's most loyal citizens. Some three-quarters say they are happy with EU
membership—and no wonder. In its first eight months of membership Poland got some
€2.5 billion ($3.4 billion) from the EU budget, or roughly twice what it paid in…”1
Rumsfeld’s remark, and the subsequent dredge for allies was less a new direction for
policy than it was a stopgap for transatlantic drift.
As for areas of danger in Europe, the sharpest change in terms of policy is in
regards to the Balkans. During the first Bush administration, this was obscured by the
overwhelming momentum of the events that followed September 11th. With another
conflagration likely to occur in Kosovo in the near future, it will be more starkly revealed.
To put it bluntly, none of the principals nor Bush himself have much interest in returning
to what they consider a failed policy in an area that is not strategically vital, particularly
in light of their ongoing troubles with nation-building in that other part of the world.
Nor, with Putin an increasingly significant ally (and with relations already strained by his
foolish power play in Ukraine), will they risk creating divisions with Russia in pursuit of
Balkan stability. Some will no doubt be inclined to see this as a lamentable result of
strained relations, but in truth, it is merely a willingness to delineate areas of interest.
Despite this, there is a strong argument that the developed nations that span the
Atlantic have common interests in promoting stability and democracy in the world and
that self-interest rightly understood would counsel those nations to concentrate less on the
increasingly esoteric disagreements between them and more on the practical matters at
hand.
Robert Kagan, ironically enough one of America’s most ardent Europeanists, offers
a cogent summation of this position, which is shared by those in both parties, arguing that
the common approach taken on Ukraine by the US and the EU points the way towards a
basis for broader cooperation. In effect, America and Europe together form a bastion of
liberal democracy. While America may emphasize force and the EU diplomacy, they both
seek the spread of Western ideals as a way of promoting stability in a dangerous world.
By accident of history and geography, the European paradise is surrounded on three sides by
an unruly tangle of potentially catastrophic problems, from North Africa to Turkey and the
Balkans to the increasingly contested borders of the former Soviet Union. This is an arc of
crisis if ever there was one, and especially now with Putin’s play for a restoration of the old
Russian empire. In confronting these dangers, Europe brings a unique kind of power, not
coercive military power but the power of attraction. The European Union has become a
gigantic political and economic magnet whose greatest strength is the attractive pull it exerts
on its neighbors. Europe's foreign policy today is enlargement; its most potent foreign
policy tool is what the E.U.'s Robert Cooper calls “the lure of membership.”2
This, however, assumes that the EU and the US possess permanent common
interests across a broad spectrum. In fact, the Ukraine incident aside, the US seems to
have far more interest in managing its relations with Russia than with Europe. While the
1
“New Europe is doing well”, Economist, January 6, 2005.
2
Robert Kagan, “Embraceable E.U.”, The Washington Post, December 5, 2004.
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US has strongly supported Turkey’s entrance into the EU, its relations with Turkey will
not be contingent on its relationship with Europe. Nor has this pointed towards a common
position vis a vis the Arab world or China, whose autocratic nature has not influenced the
EU’s position on the embargo. Simply put, transatlantic cooperation along this line is
essentially limited by the fact that both America and the European Union have
geopolitical interests that go beyond the question of liberal democracy.
The most obvious example of existing cooperation is also arguably the most
pressing matter in the world right now: Iran’s nuclear program. While the French, the
Germans and the British have pursued negotiations on that front (which Secretary Powell
went out of his way to praise on numerous occasions), they have yielded little
substantially. Progress is blocked by two particular structural problems: first, the US and
the European countries involved have not managed to coordinate a joint approach; and
second, if the United States seems unable to bring its military might to bear on the
situation (a fact that Iran’s mullahs seem quite aware of), then it is quite unlikely that
Europe will be able to muster the necessary stick with which to leverage the issue.
There is also one long-term danger coming from Europe that the administration has
not, I think, given much consideration: that demographic trends could impel parts of
continental Europe further towards the Arab nations on a geopolitical and economic level.
The American cold shoulder will offer little in the way of checking that impulse. With
military basing moving ever outward and defense strategies focusing on the Pacific Rim,
the Caucasus and the Middle East, Europeans will not be overly inclined to depend on the
US for security. The Cold War alliance depended in part on the common belief that the
United States had pledged itself to the strategic defense of Western Europe. That belief
was thankfully never directly tested. Part of the measure of the changing alliance can be
taken by analyzing the change in America’s concern for European security. This is less
due to any conscious willingness to leave Europe out in the cold than from taking its
safety and stability for granted as many Europeans themselves tend to. With Europe’s
problems increasingly becoming internal rather than external, it is difficult for American
to become actively engaged on that level, particularly as more immediate concerns call its
attention elsewhere.
For once, any change in the direction of the transatlantic relationship will have to
come from the European nations. In order to gain Washington’s proper attention, they will
have to demonstrate three things: first, that they retain individual foreign policies and as
such can be dealt with separately from the EU; second, that they possess the wherewithal
to assist the US in its endeavors; and finally, that their aid comes at a reasonable price,
depending on the situation. The first two will incline Washington to see cooperation with
European nations as a useful thing that need not involve the diplomatic shenanigans it
went through at the UN the last time around. The last will prevent those nations that do
work with the US from simply being taken for granted, as frankly many have in Iraq.
All this, meanwhile, would be greatly aided by more skillful diplomacy. Much
has been written about Bush’s wretched public diplomacy. Less has been noted about the
problems afflicting Europe’s. Theodore Roosevelt, perhaps the most skillful foreign
policy practitioner among American presidents, famously counseled, speak softly and
118
carry a big stick. Not having much in the way of sticks, Western Europeans have simply
substituted speaking loudly as a way of getting the US’ attention.
It may seem strange counsel coming from an American in the Age of Bush, but Europe's
chief problem in the United States today results from a failure of European soft power.
Europe beats the broad back of American power with the sticks that it has—mostly, its
trade power—but somehow that does not move the behemoth more than a few halting
steps. It abuses the United States for its boorishness and its weak grasp of the fine points
of international co-existence—but this somehow does not move the beast either.3
Americans—even Republicans—are surprisingly susceptible to diplomacy when it is well

employed; they are quite deaf to criticisms of their worldview, which offer no policy
alternatives.
Finally, what is the significance of this direction on European policy for the US?
Since the time when America unabashedly embraced a global role during World War II,
its alliances with Europe and with Great Britain have been the keystone of it involvement
in the world beyond its hemisphere. Since the end of the Cold War, the US has generally
embraced its position as “leader of the free world”, allowing it to link national interests
with the common good of democratic, mainly Western, nations.
The US has never really been comfortable operating according to the traditional
verities of power politics. It is no accident that its earliest endeavors at the beginning of
the Cold War began with Europe and NATO. Henry Kissinger remarks of that generation
of American statesmen that they “understood that, without its Atlantic ties, America
would find itself in a world of nations with which—except in the Western Hemisphere—it
has few moral bonds or common traditions. In these circumstances, America would be
obliged to conduct a pure Realpolitik, which is essentially incompatible with the
American tradition.”4
America’s distancing itself from Europe as it continues to expand its involvement
throughout the world is very much a revolutionary measure. The anguished chorus of
dissenters in America, witnessing the damaged transatlantic relationship, are expressing
real dismay that at bottom is uncertainty at America’s ability to carry on alone, and
perhaps even more at the effect that doing so will have on its basic character.
Meanwhile, all this is taking place against a backdrop of rhetoric as strong as any
employed during the Cold War, as the Bush administration pledges itself to the global
spread of freedom and democracy. In other words, Bush’s realistic assessment of Europe
remains very much at odds with the idealism with which he approaches the rest of the
world.
While the world will hardly slow down for the two to resolve their differences or to
mourn their growing separation, it remains to be seen how Europe will proceed with
America’s umbrella of protection gradually receding and how America will proceed
without Europe’s conference of legitimacy on its increasingly revolutionary foreign policy.
3
Walter Russell Mead, “Goodbye to Berlin?”, The National Interest, Spring 2004.
4
Henry Kissinger, Diplomacy, Simon & Schuster, New York, 1994, p. 819.
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CHINA-AMERICA THE GREAT GAME RETURN TO REALITY:
IRAN SEEN FROM WASHINGTON
RETURN TO REALITY:
IRAN SEEN FROM WASHINGTON by Alexis DEBAT
What to do about Tehran? The Bush administration would like to topple the Iranian
regime and block its nuclear ambitions. But it has not the means. A new school of
thought is therefore emerging, which waters down the neocon strategy.
W ith its ambitious domestic agenda and

its legacy bound tightly to the Herculean task of stabilizing Iraq, it is unlikely that the
Bush administration will spend any political capital proactively taking on major
foreign policy challenges in the next four years. Baring a terrorist event on US
territory or against its installations abroad, we can rather expect the President and its
new foreign policy team to revert to a more “Pavlovian” style of foreign policy
management, where the US government only reacts to issues that international
“flare-outs” force upon its agenda. Among those most likely to erupt is Iran’s renewed
diplomatic, economic and nuclear ambitions in the Middle East and South Asia, where
Washington and Tehran now share the same neighbourhood. Few challenges will be
more crucial and harder to manage for the US than this Iranian “Great Game” from
Beirut to Bombay. Especially because addressing this situation in a way that enhances
US interests in the region will force the Bush administration (just as the conservative
regime in Tehran) into painful options, pragmatic decisions that will probably cut
deeply into the doctrines (“pre-emption and prevention”) and ideological fabric
(Neoconservatism) laid out during George W. Bush’s first term. Even more than the
stabilization of Iraq, where the US government can now hide behind “third parties” on
the ground, the management of Iranian ambitions within the confines of the world’s
most strategic and most vulnerable geopolitical sphere, will not only streamline the
Bush administration’s multiple - and often contradictory - ideological leanings, but
will set a doctrinal course for the foreign policy of the United States for the many
years to come.
Missed Opportunities
Few foreign policy issues have been more emotionally charged or more difficult
to address for the US in the past 25 years than Iran’s regional ambitions. The trauma
caused by the 1979 revolution and the subsequent hostage crises of the 1980s, as well
as Tehran’s continuous sponsorship of anti-American violence, have led one
administration after another to stay within the boundaries of a narrow ideological
discourse with regards to the Iranian regime’s foreign and security policies. By
depicting Iran as an illegitimate and “evil” force – a process that did not start with the
120
administration of George W. Bush – Washington’s foreign policy bureaucracy tied

itself to the notion that a rational dialogue with Tehran would be possible only after
regime change occurred in Tehran. Fuelled by domestic political arithmetic and
popular demonology, these self-imposed constraints somehow rejected the possibility
that either of the two countries would change its course, and that ultimately they would
have to break the status quo and start working on reconciling each other’s interests in
the Middle East1. Considering the Iranian regime’s success at repressing any credible
opposition (including the reformist movement) and the rejection of any military option
against Iran by the Untied States, no US administration since 1980 has been sincerely
willing to invest political capital to overcome these psychological and political
roadblocks and design a concrete, substantial and realistic Iranian policy. The
Washington foreign policy bureaucracy was for once united in locking itself up in a
“non-Iranian policy” which culminated with the “Dual Containment” doctrine during
the Clinton administration. Throughout the 1990s, the only significant policy decisions
affecting the United States’ relationship to Iran - House Speaker Newt Gingrich’s $18
million covert action plan against Iran, and Senators d’Amato and Kennedy’s “Iran
Libya Sanctions Act” of 1996 - were made by the Congress, not the executive branch.
After a decade or so of increased misunderstanding and conflict between the
two countries, the election of George W. Bush in 2000, along with the alignment of US
and Iranian regional interests over the overthrow of the Taliban regime in Afghanistan
in the Fall of 2001, raised expectations on both sides and, for the first time in almost
25 years, opened the door to the possibility of a concrete dialogue. Despite the new
administration’s neoconservative agenda and its deep ideological rifts on Iran, the
American intervention in Afghanistan made contacts not merely desirable but
inevitable. According to Kenneth Pollack’s excellent account of US-Iranian relations2,
the Bush administration quietly allowed the opening of secret talks between low-level
diplomats of the two countries in Geneva, as well as a small measure of coordination
between US and Iranian intelligence in Afghanistan. Despite a few snags (some
elements of Iranian intelligence facilitated the escape via Iran of senior Al Qaeda
leaders such as Abu Musab as Zarqawi), this détente culminated during the Bonn
conference in November 2001, when Iranian diplomats successfully pressured some
Pashtun tribal leaders to subscribe to the Afghan political process advocated by the
United States. But right when the two countries were ready for an even greater
cooperation on Iraq, where the Bush administration was poised to attack next, and
bring the Shi’as to power, Washington and Tehran failed to solidify this historical
convergence of interests and institutionalize this pragmatic dialogue. The Geneva
consultations were broken after Iran was alleged to be the source of an arms shipment
to Palestinian radical groups intercepted by the Israeli navy in the Red Sea in January
2002, and the subsequent inclusion of the Mullah’s regime in President Bush’s “Axis
1
As expert Geoffrey Kemp pointed out in his excellent analysis of US-Iranian policies, “Iran is the only
country in the world that refuses to have formal contact with U.S. officials. Even officials from North
Korea and Cuba meet with the United States, as the Soviet Union did during the height of the Cold
War”. See Geoffrey Kemp, “Iran: Can the United States Do a Deal?”, The Washington Qaurterly Vol.
24, No. 1 (Winter 2001).
2
Ken Pollack, The Persian Puzzle: The Conflict Between Iran and America, NY: Random House, 2004.
121
of Evil” speech later that month3. This speech not only stalled the diplomatic process
between the two countries, but immediately strengthened the position of Tehran’s
hard-liners over reformist President Mohammed Khatami, who had been the most
vocal advocate of an opening to the US. The relationship between Washington and
Tehran then reverted to its usual and sterile cross-stream of angry statements and press
releases that have become the essence of the two governments’ “no-policies” for the
past 25 years.
Secret talks between former enemies united in a temporary - and inevitable-
community of interests make for interesting displays of good intentions, but hardly
amount to a policy, to which they are only the prelude. This roadmap between point A
and B is precisely what is currently lacking in Washington.
A Clash of Ambitions
Looking past the mantras and gesticulations that still make for the visible part
of US-Iranian relations, it appears that the core of the conflict is a fundamental clash of
ambitions. Iran sits on one of the world’s most strategic geopolitical nodes, at the
crossroads between Egyptian, Syrian, Turkish, Russian, Saudi, Indian, and Chinese
regional designs. The Iranian regime’s self defined “manifest destiny” over this area
stretching from Lebanon to Central Asia has the potential to destabilize a region that
includes approximately 75% of the world’s proven oil reserves, the most strategic
economic arteries for energy transit between production (Middle East, Caspian Sea)
and consumption areas4, 90% of global opium production5, almost all of the terrorist
groups targeted by the War on Terror (not to mention a dozen or so major insurgencies),
as well as the world’s second largest population of unemployed adults (15-65)6.
All recent foreign policy moves by the Iranian regime indicate that, now that it
has strengthened its position at home, it is not only conscious of this unique position,
but eager to play a pivotal, if not dominant, role7. This ambition is the main reason
3
The genesis of this decision to include Iran is laid out in Pollack’s book
4
Iran sits on the cheapest, most technically feasible and therefore most realistic transit option for
delivering Caspian energy to world markets (to the Persian Gulf of the Gulf of Oman through Iran.
5
According to a UN Office for Drug Control and Crime Prevention report, Afghanistan alone was
responsible for 70% of global opium production in 2000 (3,300 tons). This number was dramatically
reduced in 2001 because of a Taleban ban on production and the subsequent allied military operation in
Afghanistan, but the country’s opium production bounced back to 3,600 tons in 2003, and is expected to
rise even further in 2004.
6
See Tariq M. Yousef, « Macroeconomic Aspects of the New Demography of the Middle East and
North Africa”, Annual World Bank Conference on Development Economics-Europe, June 26-28, 2000.
Available at: Hhttp://www.worldbank.org/research/abcde/eu_2000/pdffiles/yousef.pdf. See also the
presentation made by Shahriar Hendi at the International Institute for Economic Studies’s annual
conference in 1998: “Iran’s Foreign Policy and Energy Transitopportunities in the Caspian Region”, at:
http://www.iies.org/OLD_Site/english/training-conf/conference/conf98-paper/pdf/hendi.pdf.
7
In a speech before the Iranian diplomatic corps on August 15, 2004, the Supreme Leader of the
Islamic Republic of Iran, Ayatollah Sayyid Ali Khamenei, reiterated the basic principles of Iran's
foreign policy as “promoting Islam, standing up to the hegemonic policies of arrogant powers [the
United States] as well as defending the oppressed nations and supporting the world’s Muslims”. This
focus on challenging the United States and its allies in the Middle East is a strong indication of Iran’s
regional ambitions. Source: IRNA, August 15, 2004.
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behind most of Tehran’s major foreign policy initiatives of the past 15 years, from its
decision to develop nuclear weapons, to the strengthening of its ties to the region’s
large and strategically spread Shi’a minority8, as well as its support to insurgent and
terrorist groups in the Gulf (Saudi Hezbollah responsible for the Khobar Towers
bombing in Saudi Arabia in June 1996), in Israel and the Palestinian Territories
(Hamas, Palestinian Islamic Jihad), and Lebanon (Hizb’Allah). It is also the main
reason behind we can read Tehran’s active policy of pursuing such major strategic
infrastructure projects as the pipeline to India, and building strong economic ties to
China9.
All of these policy initiatives can be seen as part of a major push of Iranian
“soft power imperialism” throughout the region.
But even if the Iranian government has learned to tone down its international
activism and project its power through economic, diplomatic and cultural means, and
taking the hypothesis (largely shared by most Iranian experts) that Tehran’s intentions
aren’t bellicose and have yet to be proven as fundamentally detrimental to peace and
stability in the region 10 , this policy has the potential to destabilize a vulnerable
geopolitical area which still hasn’t found its way out of post-colonial disputes,
religious and ethnic conflicts, as well as structural political and economic dysfunctions,
but which stability remains one of the cornerstones of peace and prosperity in the 21st
century. The fear that, by increasing the region’s ethnic and religious tensions, Iran’s
“Great Game” - whose effects have been felt in just about every major event or
initiative in this region since 1990, from Khobar in 1996 to the war in Iraq - would
precipitate a major “domino crisis” throughout the Persian Gulf and South Asia, is the
main reason behind the necessity to need to keep these Iranian ambitions in check,
which is far from being lost in Washington.
Bracing for the inevitable
Succeeding in this objective while preserving fragile American interests in the

region remains the Bush administration biggest foreign policy challenge, at a time
when Iraq is on the path to a delicate Shi’a-dominated rule, and Iran is months or years
away from becoming a nuclear power11.
In the past three years, some neoconservative outlets have been very vocal in
demanding that the Bush administration delivers on the promises made in its doctrines,
slogans and ideological designs such as “the war on terror”, the “Axis of Evil”, the
8
According to the December 2004 edition of “The CIA World Factbook”, Shi’is make for 60 to 65%
of the population in neighboring Iraq (15 million), 10% (about 2 million) in Saudi Arabia, 30% (about
300,000) in Kuwait, 70% in Bahrain (about 220,000), 19% in Afghanistan (about 5.4 million), 20%
(about 32 million) in Pakistan.
9
In October 2004, The Iranian government signed a $70 Billion oil and liquid natural gas deal with
China’s oil giant Sinopec Group. Source: AFP, October 30, 2004.
10
Tehran doesn’t hold any major territorial disputes and has neither the capacity nor the intention to
conduct a major military operation.
11
Iran has already designed and successfully tested several ballistic missiles, some of which, such as the
“Shahab-3”, are capable of carrying a nuclear warhead and reaching ranges as high as 1,500 Km.
Source: The Fedaration of American Scientists, at: wwww.fas.org.
123
“pre-emption/prevention” doctrine, and the “quest for liberty”, and start putting
economic, diplomatic and even military pressure on the Iranian regime. It is true that
Tehran’s dictatorial tendencies, continuous and active support to terrorism,
anti-American rhetoric, and nuclear weapons program, make it a prime target of the
new concept of “upstream threat management” that characterizes the Bush
administration’s foreign policy12.
Reality, however, has put several heavy damps on this option.
The first is Iran’s influence in Iraq. In one of the greatest, and most overlooked
ironies of the Bush administration’s foreign policy, the decision to intervene in Iraq
with an ambition (to establish a democratic regime) that tied the historical legacy of
the 43rd presidency and the credibility of its ideological fabric to the success of the
American mission there, the Bush administration has placed a great portion its own
success in Iraq – and the long-term credibility of US foreign policy - in the hands of
the countries (Iran, Saudi Arabia, Syria) which most oppose its goals in the Middle
East.
Now secure in its belief that US forces in Iraq would be sufficiently “tied
down” in the country’s stabilization to prevent a military operation against its own
regime, Iran has moved to its second foreign policy objective there: laying out a strong
infrastructure with which it can gain a solid political foothold in Iraq and be able to
influence events there13. Even if Tehran’s control over the Shi’a diaspora in the Gulf in
general, and Iraq in particular, is far from certain, the success of such political entities
as Dawa and the Supreme Council for Islamic Revolution in Iraq (SCIRI), who
dominated the “Sistani list”, at the January elections in Iraq, have not only validated
the Mullahs’ strategy, but strengthened Iran’s influence with its main neighbor for the
long run.
This major development has once again emphasized in Washington the reality
that, regardless of the fantasies expressed by some corners of the neoconservative
archipelago during the past four years, the road to the fulfilment of the Bush
administration’s historical designs laid out in the President’s Inaugural Address on
January 20, 2005 – not to mention more immediate objectives such as the revival of
the Israeli-Palestinian peace process14 - runs through Tehran.
The second, and maybe most obvious, restraint to the Bush administration’s
first term doctrines and attitudes toward Iran, is simply the lack of good economic,
diplomatic, or military options for stopping its nuclear weapons program and its
support of terrorist groups. Despite the international community’s pressure and
12
“Upstream threat management”: the management of such threats as terrorism and the proliferation of
weapons of mass destruction before it materializes in a way that harms US interests, or worse, its
installations and citizens.
13
According to a recent article in the conservative magazine “US News & World Report” quoting
several US intelligence documents, Iranian intelligence services have deployed several hundred agents
and spent millions of dollars in Iraq, with the goal of building extensive intelligence networks as well as
a strong base of influence throughout the country. Source: Edward T. Pound, “The Iran Connection”, US
News & World Report, November 22, 2004.
14
Also, as demonstrated by their control over such terrorist groups as Hamas, Hizb’Allah and the
Palestinian Islamic Jihad, as well as their past policy choices, which triggered the biggest terrorist wave
in Israel in 1996, the Mullahs have a tremendous influence over the future of the other major foreign
policy challenge in the Middle East, the Israeli-Palestinian peace process.
124
Tehran’s agreement with the European Union last November to halt its uranium
enrichment activities temporarily, and open negotiations on a long-term compromise, it
seems very unlikely that Iran will voluntarily walk away from the historical
opportunity of becoming a nuclear power and regaining its status as a major regional
player. And even if it does, this sacrifice will come at a price which will, in essence,
push Iran’s regional agenda and ambitions as far as if it was a nuclear power. This
reality, along with China and Russia’s support to Iran at the UN Security Council,
leaves only one option for coming to terms with this looming challenge: military force.
But contrary to Iraq, which was already teetering on the brink of economic, military
and even political collapse when the American offensive against the regime of Saddam
Hussein started in March 2003, Iran is an extremely difficult military target. It is a
major regional power, with a considerable capacity for stirring up trouble against US
interests throughout the world, and its military is badly equipped but fairly significant
and very well trained15. Most important, its regime, while widely unpopular on several
levels, wields absolute control over Iranian society, and is even in tune with its
people’s traditional nationalist and anti-imperialist feelings when it comes to foreign
policy.
Despite recent statements by leading neoconservative voices in Washington16,
as well as the recent reports of increased US intelligence activities inside Iran17, and
baring an Israeli military action against Iran’s nuclear facilities, which is always
possible, there are every signs in the United States that Tehran will eventually be
allowed to complete its nuclear designs – sometime between the end of this year and
2008 according to most estimates18.
However unsettling this prospect may seem for a country whose government is
violently opposed to democracy, the existence of Israel, and the American presence in
the Middle East, and is still actively supporting terrorist groups such as Hamas or
Hizb’Allah, this development could prove to be a little less destabilizing than what
most observers have led us to believe, especially if we consider that Iran’s strategic
room for maneuver is even smaller and the US government’s.
First and foremost, because even Tehran’s most radical Mullahs have now
realized that they do not have the capacity to single-handedly fulfil their main national
security goal during the 1990s - the departure of the United States from the Gulf - in
the short, medium, or even long term, and that they will only be able to exert their
“soft power dominance” over the Middle East and South Asia through peaceful
15
As demonstrated in November and December 2004 by the “Payrovan-e-Velayat” (followers of
Velayat), Iran’s largest military exercise, which underscored the Iranian army’s major logistical
challenges but displayed its impressive firepower. See IISS’s “Strategic Balance 2004” for details.
16
At a recent meeting of the Jewish Institute for National Security Affairs in Washington, D.C.,
Undersecretary of State John Bolton said that “regarding Iran, all option remain on the table”, leaving
the door open to a military operation.
17
Seymour Hersh, “The Coming Wars”, The New Yorker, January 24, 2005.
18
During an interview on a radio talk show in January 2005, Vice-President Dick Cheney confessed that
“in the case of the Iranian situation, I think everybody would be best suited by or best treated and dealt
with if we could deal with it diplomatically”. Source: AFP, January 22, 2005.
125
coexistence, if not cooperation, with the United States19.

Second, because Iran’s economic crisis, combined with the considerable
challenges of its demography20, makes attracting foreign investment not merely an
added bonus but an absolute necessity for the Iranian regime if it wants to satisfy the
two social forces that most threaten its survival: the middle class (bazaar), which is
looking for a way out of the chronic economic slump, and the student community,
which is yearning for greater cultural opening to the outside world and desperately
needs jobs. Many among the clerical leadership realize that Iran's weak economy is a
threat to stability, and a major obstacle to realizing their goal of transforming Iran into
a regional power, and that the country's economic problems can no longer be ignored.
Already, according to University of Durham (UK) Professor Anoush Ehteshami, “there
has been an ‘economization’ of Iranian foreign policy”21.
Third, as some Iran watchers already predict, because the nuclearization of Iran,
while strengthening the dictatorial regime, will undermine the ideological bedrock and
central claim to power of some of the most radical (and most anti-American) elements
of Iran’s conservative camp: their role as guarantors of Iran’s sovereignty in the face of
“foreign” (i.e., Western and American) influence.
While some of them still remain highly theoretical, there are every signs that
these three trends are gradually tilting political balance of power in favour of the
“conservative pragmatists” aligned with former (and probably future) president Ali
Akbar Hashemi Rafsandjani, which strongly advocate a “China Model” where the
Iranian government would open up its economy, and allow some social liberties while
tightening political control and cracking down on free speech22.
A New Republican Doctrine?
The sheer energy of these harsh economic, diplomatic and military realities, as
well as the narrowing room of maneuver both in Washington and Iran, has created a
“tectonic momentum” forcing the two governments in the direction of a “painful grand
bargain”, which will necessitate hard choices and fundamental shifts in ideology on
both sides. As Nikolas Gvosdev and Ray Takeyh wrote in their remarkable analysis of
US-Iranian relations in The Washington Quarterly, “Washington no longer has the
luxury of waiting for a more pro-U.S. government to come to power in Iran”23. Far
from being able to overthrow the Mullahs’ regime or compel Tehran to abandon what
19
See: Ray Takeyh, ed. Iran: Time for a New Approach, Report of an Independent Task Force
Sponsored by the Council on Foreign Relations, Washington, D.C., Council on Foreign Relations,
August 2004.
20
According to the CIA World Factbook, 40% of Iran’s population are currently under the age of 20,
which means that the Iranian economy needs to create at least one million jobs per year in the next ten
years.
21
Ehteshami, World Economic Forum’s roundtable on Iran, January 23, 2004. Available at:
http://www.weforum.org/site/knowledgenavigator.nsf/Content/_S10611?open&event_id=
22
Even Supreme Leader Ayatollah Khamenei seems to be in favour of this scenario. See his October 11,
2004 speech: “Future is Bright for Islamic Republic”, IRNA, October 12, 2004.
23
Ray Takeyh, Nikolas K. Gvosdev, “Pragmatism in the Middle of Iranian Turmoil”, The Washington
Quarterly Vol.27, N0°4 (Autumn 2004), pp 33-56.
126
it considers as its legitimate nuclear and diplomatic ambitions in the Middle East, the
Bush administration will have to treat Iran the same way it treats China: by firmly
keeping the Iranian “Great Game” in check, while making a fundamental difference
between Iran’s internal and external policies, even allowing for some of Tehran’s
regional ambitions to come to life, as long as they threaten neither US interests nor the
stability of Iran’s “area of interest”. Whatever path is chosen by the Bush
administration, dealing with Iran in the next four years will need for the USG to tap
into two of the rarest commodities in Washington: patience and restraint. Already, the
“Iranian challenge” to the Bush administration’s doctrines and policies, as well as the
difficulties experienced by the US in Iraq have profoundly altered the Republican
party’s ideological fabric with regards to foreign policy. By striking down some of
neoconservatism’s basic ideological tenets (such as Paul Wolfowitz’s and Elliott
Abrams’s “world democratic revolution”), the question of Iran has suddenly brought
back to the limelight of Washington’s bureaucratic and academic scene the pragmatic –
and vastly successful - thinking of “realists” such as Henry Kissinger or George H. W.
Bush’s national security adviser Brent Scrowcroft, whose two main advocates inside
the Bush administration, Dr. Condoleezza Rice and Robert Zoellick at the State
Department, have been put in charge of US diplomacy. There are already signs in
Washington that this “realism” is now being combined with the other half of the
neoconservative ideology - which advocates the pursuit of democracy abroad only
when it is in the interest of the US - in a new school of thought dubbed as “offensive
realism”, and embodied not only in Rice, but also in Vice President Dick Cheney’s
foreign policy thinking, as well as Charles Krauthammer, Jeanne Kirkpatrick’s
writings, and William Kristol’s writings24. If sustained and successful, this trend is
likely to emerge as the dominant ideology of the Republican party for the next decade.
In the end, it is likely that historians will give neoconservatism credit for
pointing post-cold war US foreign policy somewhere downwind from the forces of
history and civilization. But it is certainly as likely that they will harshly judge the
thinkers and officials, mainly in the Department of Defense, who took responsibility
for implementing it, for failing to give their ideology enough flexibility and credibility
to outlast its contradictions and serve as an effective policy tool.
24
On Iran and neoconservatism, see Franklin Foer: “Identity Crisis: Neocon v. Neocon on Iran” ,The
New Republic (December 20, 2004).
127
CHINA-AMERICA THE GREAT GAME WHY WE BACK ISRAEL
WHY WE BACK ISRAEL by David DONADIO
The US-Israel axis was formed in the Seventies and continues to be reinforced on the
basis of common interests and values. Washington has no alternative in the region. The
pro-Arab policies of the Europeans does not free them from the threat of terrorism.
T he United States’ alliance with Israel has

come about gradually over the last four decades, as the American foreign policy
establishment has come to believe that it is in America’s geopolitical interests as well as
America’s broader liberal ideological interests, to support a strong democracy in the Middle
East.
Although Israel’s original patrons in the west were Great Britain and France, those
countries repositioned themselves after President Johnson allowed Israel to purchase
American tanks and later fighter aircraft, and finally after President Nixon provided direct
military aid to Israel, which brought it solidly within the U.S. sphere of influence in the
early 1970s. In the 1950s, Great Britain and France had seen Israel as a vehicle to do their
bidding against Gamal Abdel Nasser, the Egyptian pan-Arab nationalist who threatened
their economic interests in the region by nationalizing the Suez Canal and closing it to their
ships, but they later took American support for Israel—which also proved an effective
guarantor of those interests—as an opportunity to reap all the benefits of restraining Nasser
without any of the costs of being associated with the Jewish state.
For their part, having seen the resounding defeat of the Arab armies who fought
Israel in 1956, 1967 and 1973, the Americans calculated that for as much as they might gain
by trying to unite Arab countries around their antagonism for Israel, there was more to be
lost by doing so. Between 1948 and 1967, the Americans supported Israel for the most part
in name only, but they were probably hesitant to show any indifference to it because
President Truman—who had defined the moral and political terms in which the United
States pursued foreign policy throughout the Cold War—had stuck his neck out to make the
world recognize Israel’s existence, and they didn’t want to appear willing to negotiate away
any of the more vital interests Truman had protected, like Berlin. The Americans knew that
preserving a peaceful, stable balance to Soviet power in the Middle East was in their
long-term interest, and they recognized that an unbeatable Israel surrounded by belligerent
but impotent neighbors was a better bet to that end than a power vacuum filled by a group of
squabbling strongmen like Nasser and the Syrian dictator Hafez al Assad, all of whom in
essence could become aligned with Moscow. The Americans therefore saw that a middle
east without Israel didn’t look any more favorable for its interests, and would probably
128
necessitate making deals which were at least as risky geopolitically as they were morally
questionable.
In the eyes of the Americans, at bottom, the Middle East was a tinderbox full of
people with all sorts of conflicting group loyalties—none of them particularly reconcilable
to western democracy—and an alarmingly prevalent desire to kill for them. So the
Americans understood that a balance of power between Israel and the Arab states which
wanted to push it into the sea was likely to be more stable than a situation in which there
was no Israel, and thus no longer any common object for Arab loathing—or in which the
object which took Israel’s place in that role was the United States itself. Under such
circumstances, the trans-national religious and ethnic forces of the region, almost all of
them hostile to liberalism, might be allowed to rise up and assert themselves. The
underlying political forces of the middle east—especially after the fall of the Shah in the
Iranian Revolution of 1979—were difficult to predict and impossible to control, which
made it advantageous to preserve a familiar Cold War balance of sovereign states, each
aligned with either the United States or the Soviet Union.
Because Israel was a Jewish state, it was naturally hostile to the forces of Islamic
fundamentalism, and also to the Soviet Union, which was making life very unpleasant for
Russian Jews, and thus Israel was ideologically suited to becoming a client the United
States could count on to balance Soviet influence in the Middle East. Moreover, even under
its more hawkish leaders, such as Golda Meir—who initially refused to make peace with
Nasser’s successor, Anwar Sadat, which made the 1973 war more likely—Israel’s central
strategic objective was never to fight wars of aggression, nor to annex new territories, but
only to ensure its continued security. Because the Israelis were committed in principle to
peace, they forced Meir out of office for her refusal to recognize the sincerity of Sadat’s
threats to start another war, and her failure to take any action beforehand to stop it. The
Israelis thus shared the Americans’ ultimate interests in the Middle East: supporting the
proliferation of peaceful, non-communist regimes which traded rather than fought with
each other. So American officials realized that their position could be advanced by
supporting Israel, or at least could not be improved by relinquishing support for Israel in
favor of a roll of the dice among Arab states which might support the United States in one
respect or another, but would always be looking for the door, because they would always
hate what it stood for.
Americans have also always admired the way in which Israel has defended itself
against aggression from all sides, in spite of being vastly outnumbered by its enemies. Their
respect for Israeli resolve in the face of half a century of almost unabated violence is
compounded by an emotional connection and a fundamental belief in the justice of the
Israeli cause. Few moments better illustrate this connection than Moshe Dayan’s 1967
address, as Minister of Defense, after the Israelis retook the Western Wall, the holiest site in
Judaism, which the Jordanians had been using as a latrine. Dayan stood before the Wall and
read a short statement “We have returned to our most holy place, never again to leave it. To
129
its Arab neighbors, the State of Israel extends its hands in peace, and assures all other
religions that it will maintain full freedom and honor all their religious rights. We have not
come to conquer others’ holy places or to curtail their religious rights, but to guarantee the
unity of the city and live in it with the the others in harmony.”
Americans knew these to be the words of fellow Democrats, who cherished peace,
and who fought not to eradicate another way of life, but only to protect their own.
Today, American critics of Israel are quick to decry the quantity of foreign aid the
United States provides to Israel—which, by some accounts, amounts to one third of all U.S.
foreign aid—as the work of a powerful Jewish lobby which has succeeded in turning the
United States into a vehicle for the advancement of Israeli interests. This conclusion
accounts neither for any possible confluence of interests between the United States and
Israel—which are all the more significant in a time of war against radical Islamic
terrorists—nor for the fact that for the first two decades of its existence, Israel protected its
interests successfully with little help from the United States. Israel fought the war of 1948
with antiquated arms which had been manufactured in Czechoslovakia, ironically enough,
for the Nazis. It fought the war of 1956 with French aircraft. Even in 1967, it defeated its
Arab rivals handily with Americans to thank only for outdated tanks—and indeed, after
President Johnson had failed to make good on his promise to compel Egypt to reopen the
Strait of Tiran to Israeli shipping.
One could argue that events like the 1956 war, in which Israel, France and England
started a war to force Egypt to reopen the Suez Canal to their ships—infuriating President
Eisenhower—demonstrate that Israel occasionally pursues policies which conflict with
American interests. The critics have a point, but for the billions of dollars which American
taxpayers now transfer to Israel each year in the form of military aid, the United States has
gained new leverage over Israel, and received what is in essence an implicit guarantee that
it will not again soon make any bold moves without the knowledge and consent of the
Americans.
Moreover, on several occasions, Israel has proven willing to serve American

interests by taking on burdens the Americans didn’t want to bear. The most notable
occasion in this regard was June 7, 1981, when the Israeli Air Force bombed the Osirak
reactor complex in Iraq, which was to have built nuclear weapons for Saddam Hussein. The
attack was met with the public scorn of the international community, but the Reagan
administration was undoubtedly pleased that someone had seen fit to risk any reprisals to
ensure that Iraq did not get the bomb.
The present standoff over the nuclear ambitions of Iran offers a glimpse into the
significance of the Israeli-American alliance. In a time when Islamic terrorism isn’t
particularly popular with Americans, its biggest state sposnsor is likely to feel a degree of
pressure from the United States. But it is September 11th, and not any action by Israel, that
130
has compelled Iran to accelerate its nuclear program, and thus the United States stands to
gain little by softening its support for Israel. Because Iran is the brains and the brawn
behind Hizballah, Israel has always been threatened by it, and is especially threatened by
the prospect of an atomic Iran, which could deter Israeli and American action while
exporting Islamic terrorism with impunity.
If the Israelis had a feasible plan to do so, they would almost certainly eliminate the
Iranian nuclear program. The Americans share this desire, and their support for Israel
enables them to say “we support Israel and its right to protect its national security by any
means necessary.”
If the United States wanted Israel to act in Iran, it could probably precipitate action,
and if it wanted to restrain Israel from acting, it could do a considerable amount to that end,
as well. If a diplomatic solution to the crisis were to be found, perhaps the United States and
Israel could offer the Iranian regime a guarantee that they would neither attack it nor
provide support for any of its domestic opposition elements, provided that Iran abandoned
its support for Hizballah and other terrorist groups, and provided continual proof that it had
abandoned its nuclear weapons program. If a diplomatic solution were not to be found, the
United States and Israel could pledge to cooperate at every level to deny Iran a nuclear
weapon. In either event, the American-Israeli alliance bears fruit.
There is no guarantee that the United States could prevent Israel from acting in Iran,
but in the present circumstances, unless the Israelis perceived a grave and imminent threat
from Iran, it is unlikely that they would take such dramatic action without American
approval.
There have, after all, been times when Israel has acted in ways that contravened
American interests, but in spite of its miscalculation in, for instance, the 1985 Pollard
debacle, Israel had and continues to have a modus vivendi in supporting the United States.
Over the last 30 years, Israel has become a client of inelastic demand, in that it needs the
United States absolutely—far more than the United States needs it—which compels it to
side with the United States more than ever. It continues to be a Jewish state amidst a sea of
hostile Muslim states which almost all refuse to recognize its existence, so it has no hope of
achieving its strategic objectives by changing its alignment, because no power other than
the U.S. shares its fundamental commitment to deterring Arab despots and defeating
Islamic terrorists. Whereas Arab states could turn to other patrons to provide missiles, tanks,
radars and aircraft—just as Egypt decided to become an American client rather than a
Soviet one in the mid-1970s—Israel has no feasible alternative to American alignment.
Israel may ingratiate itself to powers like India by and China by selling them advanced
aerospace and electronic warfare capabilities, but they have less valuable support to offer in
return, and in the end, Israel has a hard time doing deals without American approval.
131
As we have no doubt all noticed, the end of the Cold War has had massive
implications for American foreign policy. As victor and sole superpower, the United States
no longer needed Israel to counterbalance the Soviets in the middle east, and could adopt a
more nuanced posture in the region. Of course, within minutes of the end of the Cold War
came the Gulf War, in which Arab governments supported the United States with
unprecedented unanimity, and Palestinian Liberation Organization leader Yasser Arafat
chose foolishly to side with Saddam Hussein. This cost Arafat a great deal of support in the
international community, which undoubtedly made him more eager to negotiate as to the
fate of the Palestinians and the Israelis.
Though the first President Bush would surely have liked to see a lasting peace
between the Israelis and Palestinians, he was more concerned with consolidating the United
States’ victory in the Cold War. With that work largely done, it was President Clinton who
yearned for peace in the Middle East, and who hoped against history that he would preside
over a handshake to end all handshakes. In August of 1993, Israeli prime minister Yitzhak
Rabin and PLO leader Yasser Arafat shook hands on the White House lawn to mark the
signing of the “Declaration of Principles,” the first of the Oslo Accords, which brought the
Israeli and Palestinian leaders together for negotiations about a final settlement which were
to realize the legitimate aspirations of the Palestinian people and Israel’s right to exist.
Though the Oslo process was billed as “Land for Peace,” the Palestinians never
made good on their promise to rein in terrorists, and the Israelis never did enough to halt
and roll back their settlements in the West Bank and Gaza. There was perhaps an
opportunity for both parties to make good on their commitments in the summer of 2000,
when President Clinton and Israeli prime minister Ehud Barak put forward the most
far-reaching proposal to date, but Arafat rejected Barak’s offer, derailing the entire process.
In October of 2000, Arafat launched a second Intifada against Israel, denying President
Clinton an opportunity to forge a lasting peace.
So far, the second Intifada has killed hundreds of Israeli civilians, but it has won
little for the Palestinians, though it has driven Israel to build an internationally detested
security fence around its borders with the West Bank and Gaza, with the intention of sealing
those territories off and withdrawing from them altogether. Some analysts regard this as a
strategic defeat for Israel, and it may well be, but it has also cut down on terrorist attacks
enormously.
Whatever the consequences, Israeli prime minister Ariel Sharon has made a
commitment to disengage Israeli forces in the West Bank and Gaza, and although the
United States should waste no clout in defending every Israeli action in that pursuit, its
policy toward Israel should continue to be one of general support. The more pressure the
United States puts on Israel, the more likely Israel is to try and find new leverage by selling
its many forms of expertise to regimes which the Americans might rather not see
strengthened.
132
More importantly, does the United States stand to make any measurable progress in
the Middle East by pressuring Israel to make more concessions to the Palestinian
Authority—which has thus far proved itself either uninterested or unable to prevent
anti-Israeli terrorism? Would it not be a sign of American weakness in the face of Arab
anger to allow itself to be played, as it was by Arafat, in a whole new round of negotiations?
Hatred of Israel is the customary political sentiment uttered across the Arab world, but that
might also be because it’s the only one for which one can’t get shot. Arabs would probably
be happier with progressive reforms in their own countries than they would with more
Israeli concessions. For the United States to pressure the Israelis into a situation which, like
Oslo, benefited the Palestinians and provided no peace in return, with the sole intention of
seeming “even-handed” in the Middle East, might make angry Arabs happier for a minute,
but until the Arabs could be persuaded to make peace with Israel’s existence, what
difference would it make?
The question still remains: why should the United States support Israel now, when
Israel seems unable to offer anything that other states in the region cannot, with the
possible exception of the anger and disapproval of the international community? Critics
like Carter administration national security advisor Zbigniew Brzezinski and former
National Security Agency director William Odom argue that it is Israel’s existence as a
Jewish state on land to which the Palestinians also have a claim that has brought about all
the terrorist attacks against it, which is true in part, and that the United States is more
likely to suffer similar attacks because it supports Israel, which is also true in part.
This analysis however, misses the larger point, which is that the political tests the
United States now faces constitute a challenge, even if only a momentary one, to the entire
system of state sovereignty. As the bipolar order of Cold War alliances breaks down and
leaders go out in search of the new rules, the ugly underlying forces of the middle east are
baring themselves. While it is possible for the United States to reason with Arab despots, it
is not possible for it to reason with radical Islamic suicide bombers, who want the whole
world either dead or Muslim, who cannot be deterred, and who hate Hollywood and
Madison Avenue just as much as they hate Tel Aviv.
In the War on Terror, the United States finds in Israel an ally with unparalleled
human intelligence gathering capabilities, whose spies can penetrate Arab governments
and intelligence agencies with far greater ease than Americans can, and whose objective is
ultimately the same as that of the Americans. The United States is an imperfect democracy
which, by necessity, fought Hitler the mass murderer alongside Stalin the mass murderer.
Surely it can fight radical Islamic terrorists alongside another imperfect democracy.
Perhaps the strongest evidence that it is in American interests to continue supporting

Israel, especially in the midst of the War on Terror, is that none of the states which have at
one time or another attempted to placate the Arab world by withdrawing their support for
Israel is any better off for it. The English foreign office has for decades maintained a
133
pro-Arab position, and yet England is only at greater risk of attack by terrorist cells the likes
of which operate out of Brixton mosques. Similarly, the French have considerable bona
fides when it comes to supporting Arab dictators and maintaining relationships with
theocracies the United States wants to freeze out, but they are no closer to extricating
themselves from a growing demographic problem with their own large, unassimilated
Muslim population. If supporting Arab despots instead of Israel were all it took to suppress
radical Islamic terrorists, Brzezinski and Odom would be right, and France would have
nothing to fear.
All this is because in the minds of radical Islamic terrorists, it is not Jews, but secular
liberals, who are the enemy. So as liberals, Americans can either stand up with the Israelis,
who share their beliefs, or they can dissemble and hope the terrorists interpret their
indecisiveness as faith in Allah.
134
CHINA-AMERICA THE GREAT GAME DIRTY BOMBS, SUITCASE NUKES, AND
CRUISE MISSILES: A TECHNOLOGICAL
AND GEOPOLITICAL ASSESSMENT
DIRTY BOMBS, SUITCASE NUKES, AND

AND GEOGRAPHICAL ASSESSMENT by Charles D. FERGUSON
Dirty bombs, nuclear suitcases and Cruise missiles: which will be the weapons of a new
September 11th and from where will they come. The unknown factor of Russia. The risk of
an attack launched from a boat moored off the long US coast.
B ecause of cultural, historical, and

geographical influences, certain threats strike deep in national psyches. The Japanese attack
against Pearl Harbor on 7 December 1941 and the terrorist attacks against New York and
Washington, DC, on 11 September 2001 exposed America’s vulnerability to sneak attacks.
For decades, Americans felt sheltered by two oceans, the Atlantic and Pacific, and two
friendly neighboring countries, Canada and Mexico. The attack on Pearl Harbor served as a
wake up call that thousands of miles of ocean do not guarantee protection of the American
homeland. However, because Pearl Harbor is located far from the U.S. mainland,
Americans still lulled themselves into feeling somewhat immune to an attack on the
continental United States. Less than two decades after Pearl Harbor, the Soviet Union’s
launch of Sputnik in 1957 shattered this myth and spurred a ballistic missile arms race that
directly threatened the American homeland. The end of the Cold War gave back to
Americans some comfort of living in a sheltered land although they were still vulnerable to
an accidental nuclear war with Russia. Moreover, despite the growing threat since the early
1990s of potentially hostile nations pursuing ballistic missile programs, that threat has yet
to materialize.
More recently, the increasing threat of international terrorism has once again
exposed the vulnerability of America’s homeland. Terrorists and other non-state entities
have tended to rely and will likely continue to rely on conventional explosives as a means
of attack. Nevertheless, during the past two decades, a new breed of terrorist has arisen
that seeks unconventional weapons, such as biological, chemical, nuclear, and
radiological weapons. This breed may also covet unconventional delivery systems, such
as jet airliners, cruise missiles, and unmanned aerial vehicles (UAVs). All these modes of
attack offer non-state enemies of the United States the capability to conduct almost
undetectable or sneak attacks. These weapons vary tremendously in the damage they
could inflict. Biological, chemical, and nuclear weapons are classified as weapons of
mass destruction (WMDs), but only a nuclear weapon will undoubtedly cause massive
135
destruction. Terrorists have used chemical and biological weapons, but these attacks have
not killed many people because the weapons were relatively unsophisticated.
Although some terrorist groups have expressed strong interest in unleashing
nuclear or radiological mayhem, they have yet to cross what many analysts consider a
nuclear threshold. Once that precedent occurs for nuclear or radiological attacks, the
United States and its allies could confront a nightmare scenario. Nevertheless, nuclear and
radiological weapons differ markedly in the damage they can cause. A radiological
weapon, one type of which is popularly known as a “dirty bomb,” would not cause
massive destruction, but it could result in massive disruption because of social and
psychological effects as well as economic damage from radioactive contamination.
Acquiring nuclear weapons from military arsenals is considered very difficult
because of the strict security features nations usually employ. However, certain classes of
nuclear weapons may have a higher risk of falling into terrorists’ hands. Such weapons
would most likely have the attributes of portability and relatively weak security
protections. Suitcase nukes may possess these vulnerabilities.
Concerning unconventional delivery systems, al Qaeda terrorists demonstrated on
11 September 2001 the devastating effect of manned jet airliners crashing into buildings.
Clearly, that precedent has been set. Terrorists may next try to control cruise missiles or
UAVs to launch even stealthier attacks. On November 7, 2004, for instance, the Lebanese
extremist group Hezbollah flew a UAV from Lebanon into Israeli airspace. Although the
UAV did not fire a weapon, it worried Israelis and signaled that more sophisticated
unmanned terrorist flights could take place soon.
Will the next wave of unconventional attacks against the United States use dirty
bombs, suitcase nukes, UAVs, or cruise missiles? What is the technology underlying each
weapon? What are the geographical routes of these potential unconventional attacks
against the United States? Where would non-state entities most likely acquire these
weapons or the materials to build such arms?
Radiation weapons: dirty bombs and other devices
The term dirty bomb embodies the misconception that radiation weapons must
employ conventional explosives. A more accurate description of a radiological weapon is
a radiation dispersal device (RDD). An RDD can spread radioactivity through a variety of
means, including detonating conventional explosives, spraying powdered or liquid
radioactive materials, and contaminating water and food supplies. The effectiveness of
each method depends on the chemical and radioactive properties of the radioactive source
that fuels the weapon. For instance, cobalt-60 and iridium-192 usually consist of solid
metal and are, thus, hard to disperse. In contrast, cesium-137 is usually formed into
cesium chloride, which is powdered and, therefore, relatively easy to disperse or dissolve.
Although there are dozens of radioisotopes that could end up in an RDD, only
eight pose high security risks because of their prevalence and their possession of
136
radioactive decay half-lives roughly on the order of a human lifespan.1 These isotopes are
americium-241, californium-252, cesium-137, cobalt-60, iridium-192, radium-226,
plutonium-238, and strontium-90. All, except naturally occurring radium, are produced in
nuclear reactors for commercial use. Less than ten countries, including Argentina,
Belgium, Canada, France, the Netherlands, Russia, South Africa, and the United States,
make most of the radioactive sources that employ the seven reactor-generated
radioisotopes. Businesses within these countries and the United Kingdom are responsible
for selling and distributing radioactive sources to almost all countries in the world.2
Terrorists have many options in acquiring potent radioactive sources. First, they
could try to purchase or steal sources from major manufacturers or subsidiary companies.
Second, they could attempt to seize sources from end-users located in dozens of nations
worldwide. Third, they could find “orphaned” sources (those that are lost or otherwise
outside of regulatory control). The former Soviet Union, for instance, has an estimated
hundreds of orphaned sources, many of which contain potent amounts of radioactivity.
Terrorists acquiring these sources would have to smuggle them from this area of the world
to the United States. Fourth, they could try to hijack sources during transshipment through
the United States. For example, a major manufacturer in Canada transports significant
quantities of cobalt-60 through the U.S. mainland and major U.S. ports. Thus, an RDD
attack on the United States can originate internally or externally.
Suitcase nukes
In 1997, Russian General Alexander Lebed grabbed worldwide attention when he

announced that Russia could not account for about 100 portable nuclear weapons,
popularly known as suitcase nukes, weighing from 30 to 90 kg. Since the late 1990s,
some Arab newspapers, such as Al-Hayat and Al-Watan Al-Arabi, have reported that al
Qaeda operatives have bought such weapons. However, independent corroboration has
never surfaced. Moreover, officials in Russia and Ukraine have repeatedly denied that any
of these nuclear arms are missing. In 1996, the Russian government established a
commission to determine the status of these weapons. Until recently, many doubted that
the commission completed its job.3 In February 2004, however, Vladimir Denisov, the
commission’s chairman, announced that it did finish the study. He stated that the
1
For a more detailed discussion of radioactive material trafficking and RDDs, see Charles D. Ferguson and
Alessandro Andreoni, “Le vie della ‘bomba sporca’,” Limes, 1/2004, pp. 93-100.
2
Charles D. Ferguson, Tahseen Kazi, and Judith Perera, Commercial Radioactive Sources: Surveying the
Security Risks, Occasional Paper No. 11, Center for Nonproliferation Studies, January 2003.
3
For informative reports on the suitcase nuke controversy, see Scott Parrish, “Are Suitcase Nukes on the
Loose? The Story Behind the Controversy,” CNS Reports, November 1997; Nikolai Sokov, “‘Suitcase
Nukes’: A Reassessment,” CNS Research Story of the Week, September 23, 2002; David Smigielski, “A
Review of the Suitcase Nuclear Bomb Controversy,” RANSAC Policy Update, September 2003.
137
commission matched records to actual weapons.4 Thus, this statement confirms that as of
the mid-1990s these devices existed although many outside observers thought that Russia
had already dismantled all suitcase nukes. The urgent question now is: what happened to
those weapons since the survey was completed? Do they continue to exist? If so, will
Russia move quickly to dismantle them in accordance with the intention behind the
1991-1992 U.S.-Russian Presidential Nuclear Initiatives, in which U.S. President George
H. W. Bush, Soviet President Mikhail Gorbachev, and Russian President Boris Yeltsin
pledged to eliminate whole classes of tactical nuclear weapons?
Even if suitcase nukes still exist, they may have become inoperable. Retired
Russian General Vladimir Dvorkin has stated that these devices were required to have
certain components replaced every six months. While it is uncertain what these
components are, they may involve radioactive materials that undergo relatively rapid
decay. In addition, suitcase nukes reportedly used special security devices, such as
permissive action links, which require entering a specific code to unlock the weapon.5 If
terrorists are able to acquire suitcase nukes, they would probably need insider help to
identify the components that require replenishment and to obtain the codes necessary to
unlock these weapons. Assuming that terrorists could accomplish all of these challenging
steps, they would then have to smuggle a suitcase nuke through one of the more than 300
official border or port crossings into the United States or more likely across any point
along the thousands of miles of relatively unprotected coastal or land borders.
Unmanned aerial vehicles and cruise missiles
A cruise missile is “a missile that, like an airplane, sustains flight by aerodynamic

means over most of its flight path.”6 Rockets can power very short-range cruise missiles,
but small jet engines propel longer range cruise missiles. Like a ballistic missile, it is
intended as a weapon-delivery system and can contain a payload of a conventional,
biological, chemical, nuclear or radiological weapon. Unlike a ballistic missile, a cruise
missile can often escape detection until only minutes before hitting a target because of its
relatively low flight profile. Because of their low altitude trajectory and relative slowness,
cruise missiles are more effective than ballistic missiles at dispersing biological or
chemical agents or radioactive materials in powdered or solution forms.
Anti-ship cruise missiles have proliferated much more widely – to more than 70
countries –than land-attack cruise missiles– to only about a dozen industrialized countries.
Many of the countries with anti-ship cruise missiles are located in the developing world.
One of the most urgent concerns is that non-state entities could obtain anti-ship cruise
4
Nikolai Sokov, “‘Suitcase Nukes’: Permanently Lost Luggage,” CNS Research Story of the Week,
February 13, 2004 and references therein.
5
Sokov articles, op cit.
6
Definition used in the 1987 Intermediate-Range Nuclear Forces Treaty between the United States and the
Soviet Union.
138
missiles and inexpensively modify them for a land-attack role. But this operation poses
challenges. Many anti-ship missiles are jammed with electronics and have little extra
space for modification. Nonetheless, the Chinese silkworm anti-ship cruise missile has
enough room to suggest that “conversion will require less technical skill” than with other
types of anti-ship cruise missiles.7 Many countries have purchased the silkworm and its
variants as well as the French Exocet, the Russian Styx, and American Harpoon anti-ship
cruise missiles. Countries in this group that may have an increased risk of terrorist
acquisition of missile systems include Bangladesh, the Democratic Republic of Congo,
Dubai, Egypt, Iran, Iraq, North Korea, and Pakistan. A terrorist group conceivably could
launch a land attack cruise missile or a missile modified for such a role from a ship
stationed off the coast of the United States. The strike range depends on the missile’s
capability but could cover hundreds of kilometers. A cruise missile could also fit inside a
cargo container and enter the United States through a port.
Using jet or propeller driven systems, unmanned aerial vehicles typically move
slower than cruise missiles but share similar characteristics. Although traditionally UAVs
were developed for conducting reconnaissance and gathering targeting information, they
can also deliver weapons.8 Non-state groups could also try to build kit airplanes, costing
about a few thousand euros, and adapt them to a UAV or cruise missile attack role. Such
airplanes require only short runways – about the length of a football field. Conceivably,
such attacks could originate from within the United States. Terrorists could make the
unmanned airplanes or UAVs in a small warehouse near major urban areas. Innovations in
guidance through use of the U.S. Global Positioning System or the Russian GLONASS or
the soon-to-be-produced European Galileo system offer non-state entities enhanced
accuracy that they could only have dreamed about several years ago. Unless more
controls are exerted over cruise missile and UAV systems, this threat will continue to
grow, and it should not come as a surprise if a terrorist group in the near future launches a
sneak attack with one of these weapons.
7
Dennis M. Gormley, “UAVs and Cruise Missiles as Possible Terrorist Weapons,” in Occasional Paper No.
12, Center for Nonproliferation Studies, August 2003.
8
U.S. Office of Technology Assessment, “The Proliferation of Delivery Systems,” 1993, pp. 244-245.
139
AUTHORS
FRANCESCO SISCI – Heartland Co-editor and columnist of the Italian newspaper La
Stampa.
ZHANG WENMU – Research fellow at the Chinese Institute of International Affairs.

YU XILAI – Director of Reform and Constitution website.
WANG SIRUI – Writer.
MARTINO DOLFINI – Economist.
MARGHERITA PAOLINI – Scientific Coordinator of Limes – Italian Review of
Geopolitics.
LUCIO CARACCIOLO – Director of Limes – Italian Review of Geopolitics and of

Heartland.
JOHN C. HULSMAN – Research Fellow at Heritage Foundation, Washington, D.C.

DAVID POLANSKY – Research Fellow at Limes – Italian Review of Geopolitics and at
Heartland.
ALEXIS DEBAT – Former official of French Army. Terrorism analyst and advisor at
NBC News.
DAVID DONADIO – Freelance.

CHARLES D. FERGUSON - Science and Technology Fellow at the Council on Foreign
Relations in Washington, DC.
140

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CHINA-AMERICA

THE GREAT GAME

40 Zhang WENMU - Sino-American Relations and the Question of Taiwan

47 Yu XILAI - Made in the USA: The Future of International Justice and

ANOTHER AMERICAN CENTURY?

68 Martino DOLFINI - Debt and Empire

88 Margherita PAOLINI – Crude Awakenings

97 Lucio CARACCIOLO - The Empire on Credit

120 Alexis DEBAT - Return to Reality: Iran seen from Washington

128 David DONADIO - Why We Back Israel

I n a recent exposition on the emerging geopolitical situation around the globe,

Henry Kissinger remarked on the diplomatic significance of the difference between

And so the Great Game begins. But which one?

INTERVIEW WITH Lieutenant General Liu Yazhou

The war in Iraq unmistakably signaled America’s preeminence. Rumsfeld’s victories

T he Iraqi War, which caught the attention

Part I. War Result: A Regional War that Rocked the World

REPORTER What do you mean by “another starting point”?

2. Civilizational conflicts. Civilizational conflicts are religious conflicts in nature.

REPORTER Because of the US’ disproportionate military strength, there is an approach to

set itself in an invincible position. An invincible position in geography means a region

REPORTER What about the influence in the military field?

REPORTER In order to achieve the aim of conquering and occupying a middle-sized

REPORTER How did the US control their enemies’ mobility?

Part II. Air Power, or Ground Force?

But the US troops’ advancement would have been unimaginable without

REPORTER Could you be more specific in describing the characteristics of the

The traditional army has a history of thousands of years. It is now approaching

Part III. Nature of the Iraqi War: Informatization

What were behind previous wars? Comprehensive national strength. What

This is really a brand-new and epoch-making military revolution. It changed

REPORTER Does Informatization mean an unprecedented exaltation of digitalized

I have always thought that psychological warfare belong to the category of

REPORTER How can we comprehend psychological warfare on various levels?

REPORTER What is the most important problem in the establishment of strategy?

REPORTER It seems that the US pays much attention to cost.

REPORTER What are the core and connotation of an “Overwhelming Victory”?

Talent is very important—a rare resource. It is particularly important when our

3. The spirit to tolerate different thoughts. Trying to assimilate the thoughts of

CHINA IS AN ENIGMA by Francesco SISCI

A t the beginning of 2001, the first Bush

Korea’s atomic programs—Japan’s priority—has further widened the gap in the

Pakistan. The war on Islamic terrorism has cooled traditionally good

5. The war on terrorism has therefore opened a large window of opportunity to

SINO-AMERICAN RELATIONS AND

Asia-Pacific geopolitics and Sino-American relations

T he Pacific region involves relations between four major countries: China,

The question of Taiwan determines the Asia-Pacific strategic structure

The question of Taiwan concerns China’s overall modernization

The core of China’s Asia-Pacific geopolitics is the question of Taiwan, which

MADE IN THE USA: THE FUTURE OF INTERNATIONAL

The Evolution of the Idea of International Justice

After entering World War I, President Wilson delivered an address to Congress

On August 14, 1941, US President Roosevelt and British Prime Minister

Since it was proposed, the theory of a right to self-determination has

The principle of non-intervention in internal affairs implies that governments

Recently, the “International Commission on Intervention and State

The realization of international justice: system and strength

The realization of justice requires the guarantee of the system; the

In “The Fourteen Points,” Wilson proposed that, “A general association of

“United Nations” was a term conceived by President Roosevelt. On January 1,

Cooperation in Europe in 1990 claimed that, freedom, democracy, multiparty systems,