China Confidential

Criticism is out, cooperation is in; and none dare call it appeasement ... for now.

The United States is softening its approach to Rising China, deliberately avoiding criticism of Beijing in the hope of encouraging it to moderate its economic and foreign policies--and the conduct of its Stalinist vassal, North Korea, and Islamist ally, Iran. The US would also like to put some space between China and its new friend and former Communist rival, Russia, which, flush with petrodollars, is fast emerging as the world's third center, or pole, of power and influence.

The policy shift is manifesting itself in a less confrontational style and tone and a series of planned initiatives reminiscent of a controversial Cold War policy--detente--which aimed to moderate Soviet behavior.

At the risk of oversimplification, it could be said that whereas detente with Moscow was designed to ease tensions and ultimately bring about an end to the costly and protracted Cold War, detente with Beijing is intended to prevent the start of a new Cold War. There are major historical differences between the times and policies; but there is also at least one common concept on the part of US policymakers--the idea, championed by former Secretary of State Henry Kissinger, that it is possible to both collaborate and compete with an actual or potential adversary, and that treating a rival power as a geostrategic phenomenon, rather than an ideological foe, facilitates this goal.

Borrowing a page or two from Kissinger's playbook, the Bush administration's new strategy seeks to influence China into becoming a "responsible stakeholder" in the international system, in US diplomatic parlance, by increasing its involvement in important institutions, such as the International Monetary Fund, while developing new bilateral mechanisms and structures for dealing in a cooperative way with contentious issues, including trade and energy, and shared concerns, such as pollution.

China's "energy diplomacy" has resulted in a disturbing deepening of ties with Iran and Venezuela as well as some of the world's most notoriously corrupt and anti-democratic regimes, such as Sudan and Zimbabwe.

The change in administration policy--which could be altered again should China continue to disappoint Washington by failing to persuade its rogue allies to change their belligerent behavior--represents a victory for the US State and Treasury departments over Defense, whose chief, Donald Rumsfeld, has been an outspoken critic of China's opaque military modernization and buildup.

The shift may also reflect the departure and diminished influence of neoconservative foreign policy hawks, including some aging baby boomers who began their political careers, ironically, as critics of Kissinger and detente.

Conservative critics of the new approach can be expected to revive anti-detente arguments of the past--the main one being that the policy, though clearly compelling in many respects, simply did not work and instead prolonged the Cold War by effectively strengthening the Soviet regime and delaying its crackup.

Friends and supporters of Kissinger--who was also instrumental in changing US policy toward China through his secret diplomacy and visits there ahead of the historic trip to Beijing by President Richard Nixon--have at times argued that the super-diplomat partly pushed detente with the Soviet Union because he had concluded that US leverage over its superpower adversary was far more limited than conventional wisdom claimed.

It seems that the Bush administration has come to a similar conclusion concerning China.

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The planet's number-one nutcase, North Korean Dear Leader Kim Jong-il, has escalated his war of words with the United States, threatening to attack US cities with hydrogen bombs.

Amid reports that the Stalinist despot has entered China for a secret sit-down with the country's Communist Party rulers, his unofficial spokesman, Kim Myong-chol, has bylined an astonishingly bellicose article for Asia Times Online.

The essay, "Why Pyongyang is Going Nuclear," comes close to a declaration of war.

The author has in the past argued that Dear Leader Kim is both determined and destined to reunify the Korean peninsula, and that the US is helpless to stop him absent a nuclear holocaust.

Excerpts follow.

"The time is coming fast to decide who is the winner and who the loser in the long-standing conflict between the Korean people....

"The North Korean government of Kim Jong-il is going to show who the real masters of Korea are by winning the nuclear standoff with the US. The Korean people adamantly refuse to be second-class citizens, but are determined to prove that they are sovereign masters of the Land of Morning Calm....

"The KPA is now capable of detonating hydrogen bombs far above the metropolises of the US in case of war. The Koreans are now able to fight nuclear war on the Japanese and US battlegrounds.

"There should be no doubt that the government of Kim Jong-il and his armed forces would never allow the enemy to attack first. On detecting the slightest signs that the US intends to launch a first strike, Kim would order his armed forces to move first and blaze key US metropolitan targets with high-precision nuclear-tipped intercontinental ballistic missiles (ICBMs), several exploding at high altitudes. It goes without saying that operating nuclear power stations would be prime targets, sitting ducks.

"The stage is being put in place where North Korea will demonstrate its potential capability for the rest of the world to see. Korean scientists and engineers are ready to detonate nuclear devices at any time on orders from Supreme Leader Kim Jong-il. More and more nuclear weapons and long-range ballistic missiles are being cranked out on a crash-program basis in a bid to catapult North Korea to the spot of the third-most-powerful nuclear-weapons state just after the US and Russia."

North Korea is essentially a Chinese vassal, dependent upon Beijing for most of its food and fuel. The bilateral relationship has traditionally been described as being as close as "lips and teeth."

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Step by step, speech by speech....

... The Bush administration is at last moving to clearly and unequivocally identify the enemy with which the United States--and the entire Western world--have been at war since the monstrous attacks of September 11, 2001.

The US is not simply fighting a strategy or tactic, terrorism; it is fighting "a new type of fascism," US Secretary of Defense Donald Rumsfeld told a veterans' group in Salt Lake City, Utah on Tuesday. "We face similar challenges in efforts to confront the rising of a new type of fascism.

"And that is important in this 'long war' where any kind of moral and intellectual confusion about who and what is right or wrong can weaken the ability of free societies to persevere."

Speaking in Reno, Nevada on Monday about the need to be patient in Iraq, Rumsfeld said: "Today we will not tell 50 million Afghans and Iraqis that because the going is tough--and it is tough, let there be no doubt--that we will abandon them to the beheaders, the terrorists, the assassins, and 21st century fascists who seek to attack us abroad and here at home."

The defense secretary's use of the "F" word follows remarks earlier this month by President George W. Bush, after British security agencies foiled a plot to bomb US-bound passenger jets, that America was "at war with Islamic fascists."

Which is true. Islamism is a political movement, akin to clerical fascism. Presently bridging Islam's Sunni and Shiite branches, despite their theological differences and historical rivalries, Islamism has its origins in the formation of Egypt's Muslim Brotherhood. Founded in 1928 by Hassan al-Banna, the Brotherhood was an outgrowth of an earlier pan-Islamic movement.

In 1936, the Brotherhood's youth group and other fronts spawned paramilitary units, initially called the Rovers and then renamed the Battalions, which were explicitly modeled along European fascist lines.

Other Arab political parties founded during the '30s that were modeled after Nazi and fascist parties included Syria's Popular Party and Socialist Nationalist Party, whose leader, Anton Saada, saw himself as an Arab Hitler. The party's banner sported a Nazi swastika; members used the Nazi salute.

Iraq's Baath party was formed upon the principles and organizational structure of the Nazi party. Iraq, because of its oil, was a strategically important battleground between the Axis and Allied powers in World War II. Nazi propaganda was broadcast throughout Baghdad, and pro-Nazi Iraqis massacred Jews during the war.

In Palestine, the Grand Mufti Haj Amin al-Husseini declared his solidarity with Nazi Germany in 1937. A cleric and political activist, the fanatically anti-Semitic Mufti led a campaign of terrorism against Jewish and British targets during the 1936-'39 Arab Revolt, which, according to documentation from the Nuremberg and Adolf Eichmann trials, was financed by the Nazi SS. The high ranking Nazi, who was responsible for implementing the industrialized genocide of the "Final Solution" that sought to exterminate European Jewry, visited British controlled Palestine during the '30s, met with the Mufti, and subsequently maintained regular contact with him in Berlin. The Mufti spent the war years in the Nazi capital as Hitler's special guest, advocating the mass murder of Jews in radio broadcasts aimed at the Middle East. The Mufti also recruited Balkan Muslims for SS units that massacred Jewish communities throughout the region.

At the Nuremberg Trials, Eichmann's deputy Dieter Wisliceny (subsequently executed as a war criminal) testified: "The Mufti was one of the initiators of the systematic extermination of European Jewry and had been a collaborator and adviser of Eichmann and Himmler in the execution of this plan. ... He was one of Eichmann's best friends and had constantly incited him to accelerate the extermination measures. I heard him say, accompanied by Eichmann, he had visited incognito the gas chamber of Auschwitz."

After the war, the Mufti fled to Egypt,where he was received as a national hero and set up a terrorist apparatus that was responsible for the assassination of Jordanian King Abdullah in 1951 following the 1948 war against the reborn State of Israel.

The Mufti died in exile in 1974. He was never tried for his crimes because the Allies--even then--were afraid of antagonizing a hero of Arab and Muslim extremism.

But the Mufti's influence on the Muslim world, though far-reaching, can't compare with the influence of Hassan al-Banna, without whom, it can be said, there would be no contemporary Islamist movement. Banna preached a totalitarian form of Islam--cult-like and all-encompassing. His ideas have influenced Islamist murderers from the ayatollahs of Iran to the warlords and Taliban torturers of Afghanistan to Al Qaeda leader Osama Binladen and the Wahhabi extremists of Saudi Arabia.

And extremists in China--specifically, in the western province of Xinjiang, which is home to some 55 million Muslims, including Islamists and ethnic separatists. Beijing is concerned about the problem but believes it can control the restive elements, crushing when necessary the more militant and violent groups, some of which may have Al Qaeda links.

The analysis has guided China in its cynical efforts to forge a strategic alliance with Islamist Iran, its Lebanese Shiite proxy, Hezbollah, and the Sunni Palestinian terrorist group, Hamas. Beijing sees Islam as a civilization in the grip of protracted radical change--sort of a cross between the Long March that swept the Chinese Communists to power and the Cultural Revolution that plunged the country into years of chaos and bloodshed.

Given Radical Islam's oil wealth, global reach, and capacity to harm China's chief adversary, the US, Beijing has decided to accommodate and cooperate with the movement up to a point--namely, China's borders.

Venezuela update.

Following our report that China was planning to increase investment in Venezuela's Orinoco River region heavy oil deposits, Beijing has agreed to pour $5 billion in energy projects in the Latin American country. The previously announced amount was $2 billion.

China's investment will be divided between new (heavy crude) and mature oil fields through 2012, Venezuelan Energy Minister Rafael Ramirez said. The announcement followed a six-day trip by avowedly anti-American Venezuelan President Hugo Chavez to China, his fourth since taking office in 1999.

Our sources say China plans to deepen its involvement in Venezuelan heavy oil in the coming years in line with Beijing's view of the resource as the oil of the future. The world is actually awash in gummy heavy crude and solid tar (oil) sands; but the resources are more costly to produce than conventional (light) crude.

Chavez plans to triple sales of oil to China to 500,000 barrels a day by 2009.

And Venezuela and Iran will supply North Korea with oil should China feel compelled to cut shipments to its Stalinist vassal in a phony show of displeasure with its provocative missile launchings and an anticipated underground nuclear bomb test. Chavez, who recently received a medal from Iranian President Mahmoud Ahmadinejad during a visit to Tehran, intends to visit North Korea in the near future.

China also agreed to build 13 oil drilling rigs and 18 oil tankers for Venezuela. In keeping with China's "energy diplomacy," which allows state-owned oil companies to make so-called wellhead deals involving economic assistance and arms, if necessary, as in the case of the genocidal rogue state Sudan, China will help Venezuela build a $10-billion, 622-mile railroad line, thousands of new housing units and a fiber-optic communications network network. The latter project is a followup to China's gift to Venezuela of a communications satellite that is scheduled to be in orbit by 2008.

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INTELLIGENCE ITEM: As the Iranian nuclear issue heats up, Chinese propagandists are reaching out to foreign media contacts, telling them what they want to hear: it's America's fault. The Chinese line, cooked up in government-run think tanks, is that the Bush administration's rejection of Tehran's offer of "serious negotiations" makes matters worse by reinforcing Iranian fears that the US is not "serious" about a diplomatic resolution of the dispute and is instead bent on regime change.

WORDS TO REMEMBER:

"I would be willing to bet that, in another year or so, … Khomeini will be [seen as] some kind of saint when we finally get over the panic of what is happening there," -Jimmy Carter's UN envoy, Andrew Young, commenting on the 1979 overthrow of the pro-American Shah of Iran by the avowedly anti-Western Ayatollah Ruhollah Khommeini

"America cannot do a damn thing." -Ayatollah Khomeini, commenting on the hostage crisis after receiving President Carter's flattering, handwritten appeal for the release of the captured Americans "from one believer to a man of God."

“Iran is the only country in the world that has now had six elections since the first election of President Khatami (in 1997). (It is) the only one with elections, including the United States, including Israel, including you name it, where the liberals, or the progressives, have won two-thirds to 70 percent of the vote in six elections: Two for president; two for the Parliament, the Majlis; two for the mayoralties. In every single election, the guys I identify with got two-thirds to 70 percent of the vote. There is no other country in the world I can say that about, certainly not my own.” -Former President Bill Clinton, speaking on the Charlie Rose Show, on America's PBS TV network.

[There is] no significant need for the United States." -Iranian President Mahmoud Ahmadinejad

If there is a special section of hell reserved for the top torturers and henchmen of totalitarian mass murderers--men like SS leader Heinrich Himmler of Hitler Germany and NKVD head Lavrenty Beria of Stalinist Russia--China's Kang Sheng must be there, looking up at the Middle East with a smile on his fiendish face. The man who ruled over Mao's secret service was an architect of China's secret alliance with anti-American Arab extremism, building ties with the superstars of international terror, from Yasser Arafat and George Habash of the PLO and PFLP, respectively, to Wadi Haddad of the PFLP (he headed his own faction) and Ahmed Jibril of the PFLP-GC.

Kang, who died of cancer in 1975, was responsible for bringing Abu Nidal to Beijing in March 1972 before he became one of the world's most notorious names in international terrorism. He was accompanied by Abu Daoud, who six months later was responsible for the massacre of Israeli Olympic athletes in Munich, Germany. A year earlier, Kang had welcomed another Munich massacre mastermind, Abu Jihad, to China's capital.

Kang's Palestinian connection actually began in the mid '60s, with visits to China by Fatah founder Arafat and Egyptian-backed PLO founder and general secretary Ahmed Shoukairy. But the heyday of cooperation took place during the '70s. Thanks to Kang, hundreds of Palestinian terrorists and guerrilla fighters received military training in China, learning the precepts and principles of "people's war."

Covert operations came naturally to Kang, who was one of the most feared and secretive personalities in China for over a half-century. He was a grand master of murder and intrigue, manipulating and, perhaps even more astonishingly--surviving--the major purges and upheavals, including the Cultural Revolution that plunged China into a long period of bloodshed and chaos. A natural born puppetmaster, the scholarly spyboss specialized in arranged accidents and military airplane crashes, among other assassination techniques.

He may even have developed the technology and know-how for commercial airline hijackings and bombings--including a forgotten bombing of a TWA jetliner bound for New York and a Swissair plane en route to Israel--though the late Habash and Haddad and the surprisingly still alive-and-killing Jibril are generally credited with pioneering airline terrorism.

In 1966, it is believed, Kang was ordered by Mao to develop a contingency plan --in the event of a US attack on China's nuclear arms facilities--for a retaliatory attack on the US homeland. His plan, as China Confidential has previously reported, called for crashing a counterfeit civilian aircraft--containing an atomic bomb--into an American city. The scheme somehow came to the intention of foreign intelligence services, and reportedly was the premise of an obscure, 1969 French novel, Thirty Seconds Over New York, by Robert Bruchard, a Paris journalist with a military background.

So much for fiction. Kang was particularly impressed by the PFLP, which was the second largest member of the PLO during the '70s. In contrast with Arafat's dominant Fatah movement, which sought support among Arab countries, the Marxist-oriented PFLP looked to the Soviet Union and China for assistance. Mainly to Moscow, Kang found, which prevented the group from getting too cozy with Beijing.

But perhaps cozy enough to commit mass murder. On September 8, 1974, TWA Flight 841 departed Tel Aviv en route to JFK International Airport with stops scheduled for Athens, Greece and Rome, Italy. After a 68 minute stop in Athens, the flight departed for Rome. But radio contact was lost 18 minutes after takeoff. The jet crashed into the Ionian Sea, and all 79 passengers and nine crew members were killed.

The US National Transportation Safety Board determined that the probable cause of the crash was the detonation of an explosive device within the cargo compartment of the aircraft.

There is reason to believe that the design for the device may have originated with Kang Sheng.

In fact, the same method may have brought down another forgotten victim of Palestinian terror four years earlier--Swissair Flight SR330, a regularly scheduled flight from Zurich International Airport to Tel Aviv.

On February 21, 1970, the plane was flying on the route with 38 passengers and nine crew. A bomb detonated in the aft cargo compartment of the aircraft about nine minutes after take-off. It crashed a short time later near Zurich. There were no survivors.

The PFLP claimed responsibility for that bombing. A barometric triggered IED (improvised explosive device) had been used.

On the same day, a bomb exploded aboard a Vienna-bound Caravelle after takeoff from Frankfurt. The jetliner landed safely.

The Palestinians never claimed credit for the TWA bombing, though the airline and the US government were sure they were responsible for the atrocity.

Months before the attack, TWA was warned by US officials that as the only US carrier in those days that flew to Israel, the airline was the number one target for Palestinian terrorists after Israel's national carrier, El Al, which, since a 1968 PFLP hijacking that started the aerial terror wave, had achieved a well deserved reputation as the world's most secure airline.

The IED that destroyed TWA Flight 841 was installed in Athens, a notoriously unsafe airport because of the presence of local, anti-American radical groups who sympathized with the Palestinian cause.

Twenty-two years later, according to some terrorism experts, Revolutionary Guard operatives of China's ally, Iran, may have used a more sophisticated IED to destroy TWA Flight 800. The 747 jumbo jet exploded 20 minutes after departing JFK airport and crashed off the coast of Long Island, killing all 230 people on board.

Again, there was an Athens connection: the plane had just arrived from the Greek capital and was en route to Paris when it blew up. Analysts have speculated that a so-called double-timer type of device--delaying detonation of a bomb to allow for safe landing in and takeoff from New York--may have been used.

A striking similarity with TWA Flight 841: there had been multiple warnings of an Iranian attack on a US civilian airliner.

A decade later, US airlines are still vulnerable to barometric triggered IEDs.

Kang Shang could not have hoped for a better outcome.

A closing note about Ahmed Jibril, a trained demolitions expert who now heads the PFLP, or what is left of the group. The granddaddy of Palestinian terrorism, who has long been protected by Syria, Jibril is Muslim, unlike the late George Habash, who was a Greek Orthodox Christian. His religion has made it possible for Jibril to reconcile his supposed Marxist leanings with support for Shiite Islamist Hezbollah and Sunni Islamist Hamas.

Jibril's China file would make truly fascinating reading.

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It's an exciting time to be working for a Chinese think tank.

Foreign affairs analysts, academicians, and propagandists employed--and deployed--by China's elite, government-run institutes and research centers are abuzz with anticipation and speculation concerning the coming weeks and months. Though more sober and sensible individuals are justifiably worried that changing world currents (a favorite Chinese concept) can spin dangerously out of control and lead to a global conflict, the prevailing mood is one of heady optimism--for China.

Hardliners are apparently convinced that Beijing's most powerful adversary, the United States, also known as "the Hegemon," is heading for a perfect storm, so to speak, in international relations, as China's Islamist ally, Iran, and Stalinist vassal, North Korea, intensify nuclear tensions in tandem. North Korea is increasingly likely to test a nuclear weapon before the winter months--and may even test-launch another long-range missile capable of hitting the US. And Iran is not going to give up its covert nuclear weapons program. Instead, it will try to buy time by offering "serious negotiations"--in best bazaar behavior--while continuing its uranium enrichment program and accelerating an alternative method of producing plutonium for bombs via its new heavy water facility.

Nuclear North Korea and Islamist Iran--the perfect storm! For Rising China, it does not get much better than that, provided, of course, that the criminally insane Dear Leader Kim Jong-Il and Hitler-admiring Mahmoud Ahmadinejad don't get carried away and actually make good on their threats of mass death and destruction ... because, at the end of the day, US consumer dollars are still needed to fuel the mighty export machine that is central to China's economic expansion and growth.

But the think tanks think things can be managed, at least for the foreseeable future. In the Chinese view, the US has few, if any, realistic options with respect to Iran and North Korea, apart from appealing to China for help--which will not be forthcoming in any meaningful sense of the term. US military action, in the Chinese view, is basically a bluff because both rogue regimes are already nuclear powers with the ability to launch devastating attacks on American allies--Israel, in the case of Iran, and South Korea and Japan, in the North Korean case.

Iran is nuclear armed? So it seems. Western analysts, as previously reported by China Confidential, say that although the mullahocracy may be weeks or months away from having nuclear bombs through its enrichment program, Tehran already has an arsenal of nuclear warheads and missiles capable of striking Tel Aviv and European cities. True, Israel's nuclear arsenal could obliterate Iran. But it would only take one bomb, Chinese strategists say, to wipe out Israel in accord with the declared objective of Iran's maniac-in-chief.

Early Warning: don't believe bogus reports that China is reducing oil shipments to Pyongyang to punish it for its provocative July 4 missile tests and pressure it to resume nuclear talks. China supplies North Korea with more than 80 percent of its fuel; even if Beijing were to curtail shipments to influence US opinion, Chinese allies Iran and Venezuela would make up the difference.

North Korea and Iran can count on Chinese support when push comes to shove. The Middle Kingdom may go along with weak sanctions at the United Nations in the interest of appearing like a "responsible stakeholder," as the US State Department puts it; but Beijing will block US proposals to authorize military force against the rogues under Chapter 7 of the UN Charter.

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Conventional wisdom says the world is running out of oil. But energy-hungry China has a different view. The country's state-owned oil companies think the world is running into oil--heavy oil.

In contrast with the United States, which has accepted the Big Oil view that solid tar (oil) sands and gummy, semi-solid heavy crude are uneconomical--meaning not economical enough for listed energy companies who must answer to stockholders and analysts--China has taken a serious interest in the resources, in keeping with its aggressive "energy diplomacy," which seeks to lock up reserves at the wellhead. Declaring itself a world leader in heavy oil technology, China will host a four-day international heavy oil conference and exhibition this November (following a world biofuels conference in Beijing). The theme of the event: heavy oil as the global energy of the future.

The Chinese view is that all natural resources transition over time from relatively inexpensive, easy-to-extract, high-grade reserves to more costly and more difficult-to-produce, low-grade deposits, and that oil is no exception to the rule.

Fortunately for China, the world's largest known heavy crude deposits exist in a country that is presently in the grip of an avowedly anti-American demagogue who wants to reduce oil exports to the US and increase shipments to China. The country, of course, is Venezuela; and the demagogue is Hugo Chavez, who just completed a five-day trip to China.

It was Chavez's fourth China trip since 1999, and it produced a slew of agreements. But the one that may prove to be the most important for both countries over the long run is a deal to jointly produce 200,000 barrels a day of Venezuelan Orinoco River belt heavy crude by 2010.

The Orinoco region's truly awesome, untapped heavy crude deposits have been known and studied since the late 1970s, when a handful of energy experts in Venezuela, Canada, and the US advocated formation of a heavy oil-based Western Hemisphere energy alliance grouping the three nations. Despite its membership in the OPEC cartel, Venezuela showed interest in the scheme; but the proposals failed to develop traction, largely because of the opposition of the major US oil companies tied to the Middle East.

Nearly three decades later, China is emerging as the main player in Western Hemisphere heavy oil. Chinese companies have made minority investments in Canadian tar sands that could be expanded in the near future. And China's longterm investment in Orinoco heavy crude could be bigger than just announced. Sources in Caracas and Hong Kong say Beijing is considering a huge exploration and exploitation effort as well as the construction of new refineries capable of handling heavy crude.

Meanwhile, Venezuela, which still sells most of its oil to the US, intends to double oil sales to China next year to 300,000 barrels per day and more than triple that within a decade to roughly a million barrels per day.

"We have advanced our bilateral relationship with China to a higher level,'' Chavez told reporters. "You will see a trend of continuing increasing oil exports to China. We will supply more and more energy to China.''

In all, Chavez signed 28 agreements during his visit to the Middle Kingdom. China will invest at least $2 billion in Venezuela's oil industry and another $10 billion to help the South American country build a 622-mile railroad.

Venezuela's national oil company, PDVSA, also signed an agreement with China's CNPC to acquire 13 oil-drilling rigs. The deal will also send 195 Venezuelan tecnicians to China for training to build rigs using Chinese technology.

PDVSA also signed a memorandum of understanding with China State Shipbuilding Corporation and China Shipbuilding Industry Corporation to jointly build 18 oil tankers.

And, touching the renewable energy base, China and Venezuela also signed an agreement to study possible sugar cane-based ethanol production in Venezuela.

On the diplomatic front, Chavez announced that China is committed to backing Venezuela's bid to join the United Nations Security Council as a non-permanent member. The US strongly opposes the move, which China has yet to confirm, and it is not clear if Venezuela has enough votes from other member states to achieve its goal.

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Nuclear politics.

South Korea is deliberately downplaying North Korea's nuclear arsenal in the hope that China will control its secretive Stalinist vassal and stop it from going ahead with an underground nuclear test.

South Korean Defense Minister Yoon Kwang-ung said at the end of the week that his government is positive Pyongyang has produced one or two bombs.

In fact, the North, which declared itself a nuclear power in February 2005, is widely believed to have at least a dozen nuclear bombs,though it has yet to test one. An underground nuclear test--coming in the wake of North Korea's provocative July 4 missile launchings--would trigger an immediate crisis.

Shinzo Abe, who is almost certain to be the next Japanese prime minister, warned North Korea yesterday that a nuclear bomb test would be "absolutely unacceptable."

"If North Korea conducts nuclear experiments, it will be a serious threat to Japan (and) the northeast Asian region," Abe said. "It would, of course, be absolutely unacceptable."

Analysts close to Abe say he has considered the feasibility of launching preemptive strikes against North Korean nuclear sites.

China probably regards that as a bluff. But Beijing is seriously concerned that a North Korean nuclear test would spur Japan to develop its own nuclear deterrent capability.

Senior Chinese military officers, however, are said to argue that Japan will eventually go nuclear no matter what North Korea does over the next year or so. The People's Liberation Army leadership sees Tokyo as an American pawn in Washington's plan to encircle and contain China.

It's beginning to look more like Cold War II every day in every way.

Following his trip to Tehran, where he received a medal from Iran's Hitlerian president, Mahmoud Ahmadinjejad, and bedside hospital visit with Fidel Castro, Venezeula's anti-American president, Hugo Chavez, is in China seeking political support and a big oil deal. Chavez wants to dramatically reduce his country's oil exports to the United States in favor of selling to China. More specifically, Chavez wants his country--the world's fifth-largest oil exporter--to double oil deliveries to China, the world's second largest oil consumer after the US. Venezuela currently sells between 70,000 and 100,000 barrels per day to China.

Chavez said his fourth visit to China is of "great strategic importance" to Venezuela.

Analysts say Chavez is also seeking a Chinese OK for a trip to North Korea that could produce an oil-for-arms deal under cover of a science and technology cooperation agreement.

Meanwhile, China and Russia are planning a joint mission to Mars, China's official Xinhua News Agency announced.

And Chinese President Hu Jintao and Premier Wen Jiabao have completed a three-day meeting on foreign affairs. The two leaders asked Chinese diplomats to "leverage their new found economic clout to help the nation's modernization drive and launch multi-dimensional diplomacy to ensure world peace," Xinhua reported.

Presumably, the new initiative will not interfere with China's "energy diplomacy," which is responsible for fueling conflicts and crises through arms supplies and assistance to oil-rich rogues, like Islamic-leaning, genocidal Sudan.

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There was a time when countries lining up against America at least took a few days, if not weeks, to make their intentions known during an international crisis.

But that was decades ago ... before an alphabet soup of Arab and Muslim murderers and their foreign helpers ... PLO and PFLP, PDFLP and DFLP ... began hijacking and blowing up civilian airliners and attacking airports ... and slaughtering Olympic athletes ... and deliberately killing children ... and getting away with it ... again and again ... and ... again ... before Maalot and Munich, and TWA ... too many TWAs ... and Pan Am 103 ... and the Achille Lauro ... before the Beirut barracks and Khobar Towers bombings ... before the fall of the Shah and Jimmy Carter and the Hostage crisis ... Hamas and Hezbollah ... World Trade Center I and the USS Cole ... and World Trade Center II and the Pentagon ... before Al Qaeda and the Tora Bora escape ... before the Faluja retreat ... and a summer of North Korean missile tests and Hezbollah missile attacks.

Those days ... when the United States was feared and respected by its adversaries ... when waving an American passport and shouting, "Let me through! I'm an American!" was a guarantee of safe passage through a flag-burning foreign mob ... before metal detectors and suicide bombers and air marshalls ... before anyone had ever heard of a so-called holy warrior or could care less about a hell-hole like Afghanistan ... when made-in-America mattered and a union label counted ... and borders were real ... those days are long gone.

Nowadays, America's adversaries feel strong enough to move swiftly and deliberately, regardless of how things may look, confident that the appeasers and fifth columnists in the West will follow and push the party line.

Less than one day after Islamist Iran responded to the West's proposed nuclear incentives package with a phony counter-offer of "serious negotiations," China and Russia publicly backed Iran's position. Despite their own restive Muslim populations and domestic terrorist threats, China and Russia are strengthening their ties with Iran and demonstrating their commitment to blocking meaningful measures against the mullahocracy at the United Nations.

Just as we predicted they would, though this time, for the sake of the US and the free world, we would have preferred to have been wrong.

Iran, whose Holocaust-denying, clerical fascist leaders have repeatedly vowed to destroy Israel and drive the US from the Middle East ... after turning the Persian Gulf into "a sea of blood" ... is buying time as it goes about its business of developing nuclear weapons.

We've said it before; but we must say it again: given the ways in which the US funds China's growth, its alliance with Iran--and Radical Islam--is inexcusable.

Is anyone in Washington listening?

Inquiring minds would like to know.

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technorati tags: Iran

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The tag team wrestling-style gang-up on the United States continues.

On the same day that China's Islamist ally, Iran, sought to buy time in its increasingly tense nuclear standoff with the West by proposing new negotiations, China's Stalinist vassal, North Korea, again threatened to attack the US and South Korea.

North Korea said Tuesday that US-South Korea military exercises, an annual event since 1975, could lead to actual war. An army spokesman described the drills, which began in South Korea on Monday, as an "undisguised military threat and blackmail" against Pyongyang and a "war action."

The regime of Dear Leader Kim Jong-Il warned, for the upteenth time, that North Korea had the right to launch a preemptive attack in self-defense.

The threat follows our report (subsequently confirmed by the ABC news network and other media organizations) that North Korea could be preparing an underground test of a nuclear weapon.

Approximately 30,000 US troops are stationed in South Korea, which has more than 650,000 soldiers in its armed forces. North Korea has an army of 1.2 million soldiers. Most of the North's troops are stationed near the heavily fortified border with South Korea.

On Monday, US President George Bush said he asked Chinese President Hu Jintao to help dissuade North Korea from pursuing nuclear weapons.

Our prediction: Hu will disappoint Bush, as he has in the past. Impoverished North Korea depends on China for food and fuel; but Beijing will continue to block truly meaningful action in the United Nations Security Council against North Korea, preventing passage of any resolution that would authorize use of force against Pyongyang under Chapter 7 of the UN Charter.

When the chips are down, North Korea--like Iran--can count on China's support.

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Iran plays for time, as China Confidential predicted.

Details are slow in coming; but it appears that Iran's response to the Western package of proposals aimed at ending the nuclear impasse conforms with our forecasts. The Islamist nation, according to reports from Tehran, offered a "new formula" for resolving the issue and said it was ready to begin "serious negotiations" as early as tomorrow.

China Confidential has consistently said that Iran was (a) certain to reject the West's demand for a halt to uranium enrichment, a key part of the atomic bomb making process, while hinting at a possible compromise that might allow partial enrichment, and (b) likely to leave the negotiating door open in an effort to divide Western opinion and drive a wedge between the United States and Europe. Iran wants to make it easy for the West's fifth columnists and appeasers--men like former US President Jimmy Carter, for instance--to come to their aid as they go about their apocalyptic business of plotting nuclear strikes against Israel and the US.

Iran may be only weeks or months away from having nuclear bombs; so stalling is key. But Iran may already possess nuclear warheads, as we reported yesterday; and its missiles are assumed to be capable of striking Israel and Europe.

Another development: Iran's soon-to-be operational heavy water plant could allow the regime to produce plutonium for nuclear bombs by an alternative method to uranium enrichment.

China certainly had a hand in the Iranian response. As we reported last week, China's top envoy in charge of nonproliferation issues, Vice Foreign Minister Cui Tiankai, told his Iranian counterpart, Ali Larijani, in Tehran that China "hopes that Iran will seize the opportunity to respond to the package in a positive way."

China has forged an alliance with Iran and can be counted on to block truly meaningful measures against the mullahocracy at the United Nations Security Council.

As we have reported, Beijing has urged Tehran to avoid direct confrontation with the West--at this stage, at least--and instead signal a willingness to talk.

And talk....

China's Communist Party rulers know how much Westerners love to talk; diplomacy for its own sake has become a secular religion in the US and Europe. The editorial pages of the prestige press will surely be flooded with renewed calls for appeasement at all costs; anti-appeasement arguments will be drowned out and derided as war-mongering rants.

China's deepening alliance with Iran--and Radical Islam--is inexcusable, in our view, given the fact that the US basically funds China's economic expansion. Should Americans stop buying cheap Chinese products, the expansion would also stop. Should US investment bankers suddenly turn away from China, instead of continuing to invest in its ascent, Beijing's schemes and dreams of world domination--its plan to replace the US as the so-called Hegemon--would end up on the trash heap of history, like so much Chinese-made Wal-Mart junk.

With that in mind, we hope our readers will scroll down and, if they have not already done so, read yesterday's opinion article about China and Iran.

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The Islamic fascists in Iran have made their decision. Emboldened by their increased influence in the Middle East as a result of their surprisingly successful proxy war with Israel in Lebanon, the maniacs running the world's fourth largest oil producing nation are going ahead with their nuclear weapons development program.

The United Nations Security Council has set a deadline of August 31 for Iran to suspend nuclear enrichment--a key component in the nuclear bomb making process--or face the possibility of economic sanctions. But Iran's self-imposed deadline for responding to a proposed package of economic incentives offered by the Security Council's five permanent members is tomorrow.

An Iranian foreign ministry spokesman said Sunday that Iran would not suspend enrichment; and, pending a formal reply, it only remains to be seen if the robed and turbaned tyrants will tell the West to take a hike or follow the advice of their Chinese allies, as we have reported, and somehow find a way at the last minute to leave a door for continued negotiations slightly ajar--just enough to support and encourage the West's fifth columnists and appeasers and drive a wedge between the United States and Europe.

Then, again, the hate-filled Iranian mullahocracy may feel strong enough to dispense with even a pretense of pseudo-moderation. The signs point strongly in this direction. As we write, the Associated Press, citing UN officials and diplomats, reports that Iran has turned away UN inspectors wanting to examine its underground nuclear site in an apparent violation of the Nonproliferation Treaty. The refusal is reportedly unprecedented. Coming on the heels of the weekend's events--large-scale Iranian military exercises featuring the firing of 10 short-range missiles--the move is clearly calculated to signal defiance and steadfastness.

Which should come as no surprise to anyone who has followed the Iranian issue, especially from our angle--the role of China in fueling conflict and crisis in the context of its aggressive, mercantilist "energy diplomacy" and imperialist foreign policy. Despite China's vote for the weakened Security Council resolution, Iran, like China's vassal, North Korea, is confident that when push comes to shove it can count on both China and Russia to block meaningful anti-Iranian action at the UN--meaning authorization for use of force under Chapter 7 of the UN Charter.

The situation stinks. The fact that Beijing is bold enough to deepen its ties with Islamist Iran, given the US role in spurring China's spectacular growth is more than disturbing. It is inexcusable. The US is China's largest consumer market; and US investment bankers are still rushing to pour money into booming, rising China. At the same time, Beijing is helping and encouraging and doing business--big business with Chinese characteristics--with America's worst enemies and the world's rogue states, like Islamic-leaning, genocidal Sudan, for instance. And China's nuclear-armed vassal, North Korea ... which was instrumental in Iran's missile and nuclear development programs ... may be preparing to test one of its nuclear bombs after defying the US and Japan with its July 4 missile launchings. China Confidential was one of the first outlets to report that Iranians were present for the provocative test firings; the report was subsequently confirmed by US Assistant Secretary of State Christopher Hill (a well known dove on North Korea) in testimony at a US Senate hearing.

Even the most self-hating American intellectual would have to admit that there is something terribly wrong with this picture.

It may actually be worse than Washington has led us to believe. A growing number of analysts are convinced that Iran's maniac-in-chief, Mahmoud Ahmadinejad, is the most dangerous national leader since Adolf Hitler. A religious zealot with a resume in terrorism and assassination that dates back to the 1979 Iranian seizure of the US embassy in Tehran and holding of American hostages--many of whom say he was personally, intensely involved in their interrogations and torment--Ahmadinejad seems bent on realizing his stated vision of a "world without Zionism"--and America. Like Hitler, he makes no effort to hide his intentions; in fact, he announces them.

Less well known are Iranian capabilities. Contrary to the disinformation flowing from the Council on Foreign Relations and other elite establishment think tanks and academic centers, Iran may not be close to having nuclear weapons. It may already have them. Seriously. Iran may be weeks or months away from producing nuclear bombs; but there is apparently ample evidence that the oil-rich regime that has ruled by crisis, confrontation, and terror is in possession of both nuclear warheads and the missiles that can deliver them to Israel and Europe.

And America. As far as anyone knows, Iran does not yet have intercontinental ballistic missiles capable of reaching the US. But if Tehran has nuclear warheads, it could strike the US from the sea in a deniable, covert operation that could easily be blamed on Al Qaeda, using Scud missiles and launchers hidden aboard foreign registered cargo ships. This threat is real and significant. The Iranian military has successfully test-fired a Scud missile from atop a cargo vessel--perhaps with North Korean help--and publicly bragged about the maneuver. The US, sad to say, has no defense against such a sea-launched missile strike.

Speaking of Al Qaeda, there are persistent, credible reports of Al Qaeda leader Osama Binladen and his Egyptian right-hand, Muslim Brotherhood leader Ayman al-Zawahri, receiving post-9/11 shelter and assistance in Iran.

And some experts say North Korean advisors and technicians are in Iran, working on the regime's arms programs.

That all this goes on while Washington--and Wall Street--do their best to maintain the fiction that China is a responsible stakeholder in international relations, to use the State Department term, is simply outrageous. Fortunately, Main Street America ... or what is left of it in the wake of the long hollowing-out of the US economy by short-sighted, globalizing multinationals and investment banks ... has China's number, as the old expression goes. One can only hope that there are still some leaders left in the US with the courage to take a stand and stop the charade.

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"China's investments in Venezuela are increasing."

So says Venezuela's Fidel Castro-admiring, anti-American president, Hugo Chavez, who is scheduled to depart for Beijing on Monday. It will be his fourth visit to China, and it could include a side trip to North Korea.

China is reluctant to allow Chavez--an ally of Communist Cuba and an avowed adversary of the United States--to visit China's secretive, Stalinist vassal because the trip would be embarrassing for China's Communist Party rulers and make it harder for them and their US friends and appeasers to push the party line--that Chinese relations with Venezuela are just about "business." But sources in Caracas say the Venezuelan demagogue is seriously interested in arranging an oil-for-arms deal with North Korean Dear Leader Kim Jong-Il under cover of a science and technology cooperation agreement already worked out between officials of both countries. Fearful of a possible US attack, Chavez is anxious to add a missile deterrent to his armed forces; and China could give Kim the green light to covertly sell the weapons to the self-proclaimed revolutionary, who has promised to bring "21st century socialism" to Latin America.

Chavez is no stranger to rogue nations. He visited China's Islamist ally, Iran, in late July. The country's Hitlerian president, Mahmoud Ahmadinejad, awarded Chavez Tehran's highest medal for supporting the mullahocracy in its nuclear standoff with the West. Chavez "has resisted imperialism for years and has defended the interests of his and other Latin American countries," Ahmadinejad said.

In February, Venezuela opposed an International Atomic Energy Agency decision to report Iran to the United Nations Security Council over its disputed uranium enrichment program.

On Sunday, Chavez said China will boost investment in Venezuela under a series of accords covering oil exploration--in the Orinoco River basin and also offshore--telecommunications, railways, agriculture, and other industries. Beijing has shown interest in so-called wellhead deals to exploit the Orinico's vast, untapped heavy crude deposits.

Venezuela is the world's fifth largest oil exporter. It currently sells 150,000 barrels a day of oil to China and plans to increase that amount to 200,000 before the end of the year. Long term, Chavez wants Venezuela to provide 20 percent of China's oil needs--in return for political support, starting with backing the country's candidacy for a seat in the Security Council.

Chavez told radio listeners that he plans to close a deal to buy oil tankers and oil drills from China. Venezuela will supposedly be able to manufacture parts for the ships and perform maintenance at its own shipyards and assemble Chinese-designed oil drills in Venezuela at a new, jointly owned factory.

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The mask is slipping.

Chinese diplomats have made some revealing remarks in recent days regarding Beijing's military buildup and the Middle East crisis.

On Thursday, China's Ambassador to the United Nations in Geneva, Sha Zhukang, said the United States should "shut up" about China's growing military spending because the increase is no threat. Asked by a BBC reporter about China's growing military budget, Sha shouted: "The population of China is six times as much as that of the United States. So, it's time for Americans to shut up and keep quiet. They will be better off like this."

"The United States have the right to settle domestic problems on its own, so let them not pry into China's internal affairs," Sha said.

The undiplomatic diplomat also warned that China will use military force against Taiwan if it declares independence. He also seemed to threaten military action against any country that recognizes Taiwan and comes to its aid.

"The moment Taiwan declares independence, supported by whoever, China will have no choice," he said. "We will do the business through whatever means available to the government. Nobody should have any illusions on that. We will do the business at any cost."

He added: "It's not a matter of how big Taiwan is, but for China, one inch of the territory is more valuable than the life of our people. We will never concede on that."

China's recently enacted Anti-Secession Law authorizes use of military force against Taiwan if the self-ruled island moves toward formal independence, or if attempts to reunite peacefully ultimately fail; and Chinese military officers have warned that US efforts to come to Taiwan's aid would trigger a nuclear exchange.

China's opaque military budget has grown by double digits for much of the last 15 years, causing concern in the US and among China's neighbors in Asia, especially Japan.

Sha, who is China's former senior arms negotiator, is a hardliner on defense and military issues--with a history of lashing out at the US.

In March of 2001, he attacked US plans for a national missile defense (NMD) system, saying it could spark a new arms race. His comments come in the wake of reports that Washington wanted to sell missile defense systems to Taiwan to counter a growing threat from China. (Beijing presently has some 800 missiles aimed at Taiwan and is adding about 100 a year.) Sha accused the US of exaggerating the threat of missile attack from its adversaries--including North Korea--saying missile defense would make the US more likely to "bully" other countries.

China's is against a US NMD system because it would diminish or possibly even negate China's strategic nuclear deterrent. China's nuclear arsenal includes at least 20 land-based intercontinental ballistic missiles capable of striking targets throughout the US.

In 2004, when he headed the Chinese delegation to the UN Human Rights Commission, Sha made scathing comments about the US, accusing it of unfair criticism of China's human rights record.

So much for Sha.

On August 15, China's special envoy to the Middle East, about whom we have written before, said that Beijing considered UN Security Council Resolution 1701 aimed at ending the fighting between Israel and Hezbollah as "unbalanced." Sun Bigan, who was China's first ambassador to Saudi Arabia, called for a permanent cease-fire in the region and resumption of peace talks to achieve "a just Middle East settlement."

Said Sun: "We noticed that Arab countries, including Lebanon, did not oppose the resolution, that's why we voted in favor of it. China does not think that it was an ideal resolution and sufficiently balanced."

Speaking at a press conference in Saudi Arabia, Sun said he shared the views of Saudi King Abdullah, who has opposed attempts to link "Islam and Muslims with terrorism and fascism."

Sun condemned Israel's "random bombing against Lebanon," which he said had killed and injured a large number of civilians and destroyed the country's infrastructure.

"This is a big humanitarian catastrophe," Sun said.

Sun's regional, war-time tour included a visit to Syria. After meeting in Damascus with Vice- President Farouk al-Shara, the Chinese diplomat described his talks as "very successful."

Speaking at a press conference held at the Chinese embassy, Sun said: "Viewpoints regarding the deteriorating situation in the region as a result of the Israeli aggression on Lebanon were identical."

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Dangerous developments for Israel.

It is increasingly clear that the military wing of Hezbollah--the Shiite Arab Islamist proxy of China's Shiite Persian Islamist ally, Iran--is going to be absorbed by the Lebanese army.

Lebanon is essentially a failed state. Its cabinet has approved a United Nations Security Council scheme to deploy 15,000 Lebanese troops in the Shiite south to bolster a UN force that is certain to be sympathetic to Hezbollah. The troops began deploying Thursday. But the issue of disarming Hezbollah is sure to remain just that--an issue. The overwhelming majority of Lebanese soldiers are Shiite. The chances of the army standing up to Hezbollah are at best remote.

More likely, Hezbollah will do to Lebanon what Hamas did to Gaza and the Palestinian Authority--take over.

Meanwhile, China's other Axis of Evil ally, Syria, is likely to step up its decades-old chemical warfare program. The secular Sunni dictatorship--which suppresses domestic Islamists while working with Iran and Hezbollah--has the largest and most advanced stockpile of chemical weapons in the Middle East, including Sarin, VX, and mustard gas. Major production facilities, which are located near Damascus, Homs, and Hama--where Syrian forces once massacred Muslim Brotherhood insurgents. The plants produce hundreds of tons of chemical agents annually, which could be delivered by ballistic missile chemical warheads and chemical gravity bombs.

Syria also has biological weapons, including anthrax and ricin, and a nuclear research center that could be used to develop nuclear weapons--with North Korean and Russian expertise.

Syria's offensive weapons arsenal is one of the largest in the region, thanks to Russia, China, and North Korea. The secretive Stalinist state--which is China's vassal--has helped Syria to establish a solid-propellant rocket motor development and production capability.

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Memo to mainstream media....

We hate to say we told you so, but ... we told you so.

On Monday, China Confidential reported that North Korea may be preparing a test for a nuclear bomb, citing Japanese analysts.

America's ABC News network said the same thing--adding the word "underground"--on Thursday. The network cited unidentified US officials.

ABC quoted a senior military official as saying A US intelligence agency had recently observed "suspicious vehicle movement" at a suspected North Korean test site.

North Korea is believed to have reprocessed enough plutonium for a substantial arsenal of weapons, but has yet to test one. Nor has it demonstrated that it possesses operational nuclear warheads.

A North Korean nuclear test would create a problem for China, which has long denied that its Stalinist vassal possesses nuclear weapons. A test would make it more difficult for China to block sanctions against Pyongyang at the United Nations.

North Korea test-launched seven missiles on July 4 in a provocative move that was later condemned in a weak Security Council resolution, thanks to Chinese efforts to prevent inclusion of possible use of force under Chapter 7.

As first reported by China Confidential and, more recently, by Japanese media, six of the seven missiles landed in their target zones. Washington said the long-range missile, capable of hitting the US, only flew for 40 seconds; but sources tell China Confidential that the missile stayed aloft for roughly two minutes before plunging into the sea.

Talks on ending North Korea's nuclear arms program among the two Koreas, China, Japan, Russia and the US have been stalled since November.

Like China's nuclear arming Islamist ally, Iran, North Korea has threatened to attack the US.

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As China's Islamist ally, Iran, proceeds to develop nuclear weapons and warheads--which could be smuggled into the United States through still porous ports, or fired into American coastal cities via missiles launched from approaching cargo ships--China's US retail outlet, Wal-Mart, works to prevent US ports from becoming more secure.

In the nearly five years that have passed since the Islamist Al Qaeda attacks of 9/11--the worst-ever attacks on American soil by a foreign foe--Wal-Mart and its lobbyists have been instrumental in blocking proposed new maritime and port security rules. Through Wal-Mart's front group, the Retail Industry Leaders Association, the corporate behemoth opposed several port security measures, including proposals to make shipping containers more secure, to beef up inspections--only a small fraction are now inspected--and to provide more prompt cargo information.

Wal-Mart and China believe the measures would slow down the China-US pipeline and increase shipping costs.

Apparently, the company's infamous "China price" for cheap consumer goods does not include security for Americans.

And nobody--except organized labor, which has long been hostile to Wal-Mart because of its anti-worker policies, and American manufacturers understandably unable to meet the China price--seems to care. The port security issue has largely been ignored by the mainstream media, which tends to bend over backwards to be nice to China in the interest of corporate parents eager for a slice of the country's elusive media market.

Wal-Mart's collaboration with Communist-controlled China--and cynical betrayal of American labor and manufacturers--is a well known story. Twenty years ago, the "big box" company that set out to destroy Main Street--to the delight of Wall Street--bought only six percent of its merchandise overseas. Back then, the company used to proudly promote the "Buy American" motto of its founder, Sam Walton.

Today, Wal-Mart and China constitute a joint venture--between an authoritarian adversary of the US and a ruthless corporate giant--united by a determination to dominate the US economy.

At least 70 percent of all non-food items sold at Wal-Mart come from China or have a Chinese component. Most of the rest comes from 70 other countries, including Muslim Pakistan, Muslim Indonesia, and the Muslim-threatened Philippines, where human rights abuses, official corruption, and complicity with terrorism are commonplace.

Importing an estimated $18 billion in products from China each year, Wal-Mart is China's eighth largest trading partner, surpassing entire countries like England and Russia.

EDITOR'S NOTE: Yesterday (scroll down), China Confidential urged US labor and manufacturing leaders to organize a 30-day boycott of Chinese goods.

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As previously reported by China Confidential, Beijing is playing a double game in the Iranian nuclear dispute.

Publicly, China is urging Iran to accept the incentives package offered by China and five other countries in exchange for suspending uranium enrichment.

But Iran has no intention of abandoning its dream of developing nuclear weapons. The mullahocracy may be months away--maybe one month, even--from possessing a bomb.

So China is privately advising its Islamist ally to appear reasonable and accept at least a partial suspension--with conditions--in order to drive a wedge between the United States and Europe. China's message to Tehran: talking buys time.

Sources say that is what China's top envoy in charge of nonproliferation issues has been telling his Iranian hosts this week, as China Confidential reported yesterday.

China's official Xinhua News Agency said Vice Foreign Minister Cui Tiankai (pictured above) told his Iranian counterpart Ali Larijani in Teheran on Tuesday that China "hopes that Iran will seize the opportunity to respond to the package in a positive way."

Cui may be having an impact. Iran's President Mahmoud Ahmadinejad today said his country was not opposed to negotiations, but would never abandon its "right" to enrich uranium. The statement is designed to give the impression of moderation.

Beijing has a lot riding on the Iranian issue. Despite deepening ties with Iran, China would like to be seen as a responsible stakeholder in world affairs, to use the fashionable US State Department term.

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In this summer of seemingly endless surprises, there is one constant: the clutching, criminal hand of Communist-controlled China.

From the provocative missile tests of China's nuclear armed, Stalinist vassal, North Korea, to the proxy missile attacks on northern Israel by Beijing's nuclear arming, Islamist ally, Iran, China stokes the fires, fuels the conflicts and supports the forces that plot, plan, and pray for the destruction of the United States and its allies, including Israel--the only democracy in the barbarous Middle East.

In the summer of 2006, China has at last removed its mask to reveal a ... menace. Neither a responsible stakeholder nor a friendly competitor, China is America's adversary--a rising regional power with global aspirations and ambitions. As shown by its massive military buildup, mercantilist "energy diplomacy," and imperialist foreign policy, China's Communist Party rulers aim to dominate Asia and ultimately replace the US as the world's leading military power, or "hegemon," in Red Chinese jargon.

In fact, menace is too polite. Rising Red China is a ... monster ... that threatens the US economy and the global environment more than any nation on earth, exploits and oppresses its impoverished rural masses and growing urban underclass, kills, jails, and tortures religious and political dissidents and other prisoners of conscience, and delights in the horrific slaughter ... and skinning alive ... of dogs and cats and other animals in the context of a culture of cruelty that defies description.

Ironically, the US is feeding this monstrous menace--from Wal-Mart to Wall Street. Greedy, globalizing investment bankers and hedge fund managers are pouring money into China. And American consumers, addicted to cheap Chinese goods, are sustaining the mighty export engine that is driving China's economic expansion and meteoric ascent.

American consumer dollars are funding the China menace just as American petrodollars are funding Radical Islam. The US is China's number one consumer market; should US consumers stop buying cheap Chinese products, China would probably collapse. It certainly would not be able to roam the world, meddling and interfering on behalf of rogue regimes bent on delivering mass death to America and its allies. Should US consumers stop buying cheap Chinese products, there probably would be no massive military buildup by the People's Liberation Army--because the essentially rotten regime that has staked its claim to legitimacy solely on continued material progress--at the expense of the rest of the planet--would have to choose between guns and butter. China is ripe for revolt; and the country's Communist Party rulers, for all their tough talk and posturing, are actually scared.

In short, should American consumers stop buying cheap Chinese products, the dragon would starve--and die.

Which brings us to our call to action. America may not be ready for a permanent China boycott; but the country is certainly ready for a trial, or test, boycott. With Labor Day fast approaching, we urge American manufacturers and trade unions to lead the nation--and the free world--in a one-month boycott of any and all Chinese goods. The stakes are way too high to rely on gutless politicians to take meaningful action in defense of America's national security and endangered economy.

It's time to send China a message: After all the hollowing out of the American economy and outsourcing of American jobs, after all the rampant intellectual property piracy and blatant currency manipulation that keeps Chinese products artificially low, after all the fawning media coverage of the so-called New China, after 9/11 ... which China's leaders secretly cheered and applauded ... after all the intrigue and disinformation ... and double-dealing ... the American people, we believe, are mad as hell at China and looking for ways to fight back.

In this summer of seemingly endless surprises, it's time to give one to China.

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Analysts say terror-sponsoring Iranian officials warned China back in June that war was likely to break out between the Islamist nation's Lebanese proxy, Hezbollah, and Israel. The officials, including Iranian President Mahmoud Ahmadinejad, allegedly discussed the possibility of conflict on the sidelines of the annual Shanghai Cooperation Organization (SCO) summit meeting.

Iran had observer status at the SCO summit. In the name of regional security and cooperation, the organization--a tool of Chinese foreign policy--groups the Middle Kingdom with Russia and the countries of Central Asia in an emerging, Warsaw Pact-like alliance against the United States.

Ahmadinejad is believed to have told his Chinese hosts that Iran had concluded that the US was preparing a military attack on Iran over the nuclear dispute, and that a preemptive proxy war was necessary to strengthen Tehran's military and political position throughout the region.

Israel suffered a tactical defeat of possibly strategic proportions in the month-long war, which Hezbollah provoked with a cross-border raid that kidnapped Israeli soldiers.

The Shiite Arab terrorists proved they could rain 100-200 rockets a day on Israeli cities and towns, operating from well prepared positions in Lebanese civilian centers, and hold out against Israeli forces, including an air force restrained by asymmetric war rules and an apparent need to cater to world opinion.

Non-Arab Iran, as China expected, has emerged as the dominant power in the region, uniting Shiites and Sunnis in a common struggle to defeat Israel and drive the US from the Middle East.

Syria, a secular Sunni dictatorship allied with Iran and Hezbollah, has also been strengthened as a result of the war, its influence on the failed Lebanese state remarkably restored.

Meanwhile, on Day One of a flawed United Nations-arranged ceasefire--a deal riddled with loopholes through which Hezbollah can rearm, reposition, and again fire its missiles--the most senior Chinese official in charge of "nuclear nonproliferation issues" flew to Iran.

China's official Xinhua News Agency reported that Vice Foreign Minister Cui Tiankai departed for Tehran Monday to discuss "nuclear issues and other topics of mutual concern" with Iranian officials.

Iran has vowed to continue--and even expand--uranium enrichment, in defiance of a UN Security Council deadline for it to suspend its nuclear activities by August 22 or face the threat of political and economic sanctions. Tehran says its nuclear program is peaceful.

In fact, Iran, as the US and many European countries claim, is moving as fast as it can to develop nuclear weapons. Analysts tell China Confidential that Tehran may be only a month or so away from having a weapon.

China and Russia, both veto-wielding permanent members of the Security Council with deepening commercial ties to Iran, have opposed Western proposals to impose sanctions on Tehran. A Security Council resolution authorizing use of force under Chapter 7 is a non-starter for Beijing and Moscow.

Our sources say Cui will advise Iranian officials to at least agree to a partial suspension of enrichment activities. The Chinese view is that agreeing to a partial suspension--subject to certain terms and conditions--will drive a wedge between the European and US positions on the nuclear issue and allow Iran time to continue its research.

But the Iranian president--an avowed enemy of Israel and the US, who has repeatedly urged the destruction of the Jewish State--is reportedly inclined to reject any compromise on the nuclear issue.

Iran's wannabe Hitler wants the bomb--now.

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Japanese analysts tell China Confidential there is a reasonable chance that China's vassal, North Korea, will test one of its nuclear weapons over the next six months.

North Korea is believed to have reprocessed enough plutonium for a substantial arsenal of weapons, but has yet to test one. Nor has it demonstrated that it possesses operational nuclear warheads.

Plutonium is used to make lighter, more compact and deadlier weapons than uranium.

A nuclear test would create a problem for China, which has long denied that the secretive Stalinist state--which depends on Beijing for food and fuel--actually possesses nuclear weapons. A test would make it more difficult for China to block sanctions against Pyongyang at the United Nations.

North Korea test-launched seven missiles on July 4 in a provocative move that was later condemned in a toothless Security Council resolution, thanks to Chinese efforts to prevent inclusion of possible use of force under Chapter 7. As reported by China Confidential and recently confirmed by Japanese media, six of the seven missiles landed in their target zones. Washington said the long-range missile, capable of hitting the US, only flew for 40 seconds; but sources tell China Confidential that the missile stayed aloft for roughly two minutes before plunging into the sea.

Talks on ending North Korea's nuclear arms program among the two Koreas, China, Japan, Russia and the US have been stalled since November.

In other nuclear news, Pakistan will soon be able to strike every city in India using a new arsenal of plutonium warheads developed with Chinese help, according to intelligence sources in New Delhi.

China has been arming Pakistan with nuclear weapons and ballistic missiles for more than 25 years.

Pakistan's plutonium plant, which is located in the Khushab district in Punjab province, is capable of producing enough plutonium for 50 warheads a year.

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As if determined to prove that conservative critics alleging leftwing media bias have been right all along, two aging but extremely influential and accomplished American journalists have rallied to the aid of America's nuclear arms developing enemy, Islamist Iran.

Seymour Hersh (above, left), 69, an American Pulitzer Prize winning investigative reporter who has made a career out of blaming America first, last and always, has weighed in with a story that Israel's government and the Bush administration planned the war against Iran's Lebanese proxy, Hezbollah, before the Shiite terrorists took Israeli soldiers hostage in a cross-border raid. The incident, according to Hersh, was a pretext--and a dress rehearsal for--heaven help us!--military action against Iran.

In April, Hersh, who writes for the stylish and politically correct New Yorker magazine (one of America's most boring but nevertheless also most respected publications), reported that Bush wanted to drop bunker-busting nuclear bombs on Iranian nuclear sites.

We should only be so lucky. Unfortunately, the allegations, like most of the trash Hersh zealously trades in, were false.

Then there is the sad case of Mike Wallace (above, right) , 88, a giant of American television network news, who has apparently lost his marbles after an incredibly long and rewarding career. A real reporter who made the transition from radio to TV in the 1950s, Wallace recently retired from CBS and his iconic posting with the network's "60 Minutes" news magazine-style program. For unknown reasons, we learned last week, he allowed himself to be used and manipulated by Iran's wannabe Hitler, Mahmoud Ahmadinejad. Not only did Wallace fly to Tehran for a pathetic, humanizing interview with the monster; he heavily promoted the segment, praising the Iranian president for his intelligence, education, and even his appearance.

Audience Advisory: A vomit bag is strongly recommended for the interview.

Israel's looming defeat--the overnight destruction of its deterrent capability, the failure to dislodge and disarm Iran's Lebanese proxy army, Hezbollah, and the devastation of the Galilee--is a disastrous development for Israel, the United States, and the civilized world.

An Islamic fascist force, to use the Bush term, operating from a state-like enclave in a supposedly sovereign nation, proved that it can fire 100-200 rockets at day at America's democratic ally--the only real democracy in the barbarous Middle East--and live to fight--and fire away--another day.

No doubt, Israel screwed up. Correction: the Israeli government screwed up--by stabbing the Israeli military in the back. An untested, unqualified team of politicians prevented the military from doing what they do best: fighting fast and hard, with overwhelming force, lightning speed and bold, creative operations. The generals had the right plan but were not allowed to implement it. Instead, they were ordered to carry out a terribly tentative, on-again-off-again campaign that each day came to resemble war by committee.

Meanwhile, the Galilee burned, civilians and soldiers died--needlessly--and a parade of puffed-up, fat-and-happy failures--like newly botoxed, former Prime Minister Ehud Barak, whose stupid pullout from Lebanon six years ago made the Iranian-Hezbollah military buildup possible in the first place--appeared on Israeli and American television networks to ponder and pontificate and further damage Israel's image and reputation.

This was followed by the awful spectacle of a Munich Pact-style sellout at the anti-American United Nations, which led to the throwing away of more Israeli soldiers' lives in a desperate, 11th-hour attempt to achieve in the last day or so what a month of handicapped fighting failed to accomplish.

Key word: handicapped. Despite claims to the contrary, the war did not disprove the importance of air power, because air power was never given a chance to work. Not really. Not if by air power one means the flattening, de-housing, and cratering of the areas from which enemy missiles are being fired. It was that kind of destruction--delivered to the heart of the enemy--that won World War II.

It is that kind of destruction--delivered to the heart of the Radical Muslim Menace--which will, sooner or later, have to be used to win the war against Islamic fascism, or, more properly, Islamism, or Radical Islam--a political ideology and movement that has taken over and basically become synonymous with the organized religion called Islam.

But in order to fight a real war against Radical Islam, the civilized world, led by the US, has to agree that we are in fact at war--not with a strategy or technique called terrorism--but with a global enemy, albeit one that is divided to some degree by theological, ethnic and tribal differences.

The blame/hate-America appeasers, in the US and Europe, aided by Islamist fifth columnists, will try their best to sabotage a proper identification of the enemy and a true commitment to total victory, something that has been lacking since 9/11, as shown by the use of the deliberately vague and misleading "War on Terror" misnomer.

Nearly five years after the Saudi-sponsored, Al Qaeda attacks on American soil--the worst-ever attacks on the American homeland by a foreign power--the appeasers and fifth columnists can be counted on to cite the Israeli defeat in Lebanon and US willingness to negotiate with Iran and its Hezbollah proxy, via the Lebanese failed state, as proof positive that the war on terror is far more complex than the Bush administration has led us to believe--the Left loves complexity!--and thus needs to be demilitarized and fought more like a defensive police action.

And the American people, understandably angry, tired and confused by the Iraq debacle--in which, for example, we have for all practical purposes embraced the Iranian-manipulated Shiite Islamist killers, instead of leveling their centers of murder and mayhem--the American people will very likely be receptive to this argument for less, not more, military action against a truly Nazi-like foe that seeks their doom.

Should this happen, and there can be no assurances that events won't unfold in this manner, we could well wake up in a few years to find ourselves in a situation in which we could ironically be winning the so-called War on Terror--defined as prevention of new mega-attacks on US soil--but have lost the war against Radical Islam. How could this happen? Simple. It would only take an announcement by Iran that after successfully stalling and negotiating--and dividing the West--it is at last in possession of both nuclear weapons and long-range missiles.

If and when that happens, as former Israeli Prime Minister Benjamin Netanyahu has so often said, Radical Islam will no longer need its shoe bombers and liquid bombers, its suicide belts and bus bombers. The war in Lebanon was the test case, the proving ground for the next phase of the conflict.

If and when Iran gets the bombs to match its growing arsenal of missiles, the West will find itself in a whole new ball game ... up at bat in the bottom of the ninth inning, down by way too many runs ... face-to-face with the meanest, maddest pitcher on earth.

Heaven help us.

CLOSING NOTES: Israel, we believe, will bounce back, even stronger, perhaps, and with a profound new appreciation of the rapidly changing geopolitical and strategic situation, including the emergence of Iran--a country committed to Israel's destruction--as the region's most important power, and the increasingly obvious and dangerous regional roles of Iran's allies, China and Russia, which seek to drive the American "hegemon" from the Middle East.

Watch for Netanyahu ("Bibi" to Israelis) to make a big comeback. He was right on target in terms of his terror analysis, as noted above. But he was wrong about China, as he is reportedly telling friends and supporters. Bibi thought China would care more about Israeli military technology--Israel has been a major supplier to Beijing--than Arab and Iranian Oil. Not so. China, as reported by China Confidential, is forging a strategic alliance with Radical Islam in the context of Chinese "energy diplomacy," which seeks to lock up preferred access to oil and gas supplies while also weakening and isolating the US.

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Made in China?

Hezbollah forces shot down an Israeli helicopter in southern Lebanon on Saturday using what they said was a new type of missile--the Waad--Arabic for Promise.

The Israeli army said it was the first aircraft shot down in Lebanon since its war with Hezbollah began 30 days ago.

Israeli media said there were casualties. The military said only the five-man crew were on board.

The missile could have been made in China. Its Islamist ally, Iran, has supplied its Shiite Lebanese proxy with Chinese Qianwei (Vanguard), or QW, shoulder-launched SAMs (surface-to-air missiles). The older QW-1 missile is easy to use and well suited for shooting down helicopters and fixed-wing aircraft. The more sophisticated QW-2 (pictured above) is capable of destroying civilian airliners and military aircraft. Experts describe the QW-2 as the world's most effective one-man shoulder-launched ultra-low-altitude air defense missile, surpassing the American Stinger and French Mistral.

The QW missiles are made by the Xinshidai Group, a state-owned arms maker controlled by the Chinese People's Liberation Army. The company has been sanctioned by the United States for arms sales to Iran.

Hezbollah has also acquired SA-18 anti-aircraft missiles from Syria. The SA-18 surface-to-air missile is an advanced version of the Russian-made Strela missile with a larger warhead, extended range and higher speed.

Hezbollah has been seeking an array of more advanced weaponry from its Iranian sponsors, including more advanced SAMs.

Sources say Iran's ally, Syria, is still transferring weapons--including rockets--to Lebanon, in an effort to assist Hezbollah.

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Regarding the war against Radical Islam and the Mideast peace deal, here's the view from Beijing:

In the United States, Secretary of State Condoleezza Rice has successfully sidelined Vice President Dick Cheney and defense secretary Donald Rumsfeld. US President George Bush has kept them around out of loyalty, but their power and influence has been dramatically diminished. Rice has her eyes on the Nobel Peace Price. China sees her as a closet foreign policy dove, in contrast with Cheney and Rumsfeld, and a potential friend who has more or less bought into Beijing's peacefully rising party line and the State Department's ridiculous "responsible stakeholder" concept. Our prediction: like former Secretary of State Henry Kissinger, she will work for the bipartisan China lobby after leaving State.

In Lebanon, Hezbollah is effectively running the show and about to take over the military, which is 70 percent Shiite. Nothing can stand in the way of Hezbollah's power grab and mainstreaming. The organization's sponsor and paymaster, Iran, has thus won its proxy war with Israel and the US, significantly strengthening Tehran's hand with respect to the nuclear impasse.

In Israel, the government of Prime Minister Ehud Olmert is on its last legs. His handling of the war was an utter disaster, debunking the myth of Israeli invincibility and damaging Israel's deterrent capabilities to a degree few would have thought possible prior to the war.

At the United Nations, Secretary General Kofi Annan has resurrected himself--at Israel's expense. Like Hezbollah, he showed that he can "stand up" to the US and Israel.

Welcome to the Chinese Century....

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The fix is in.

Like the proverbial good cow that gives milk and then kicks over the bucket, the United States has caved in to French and Arab League pressures for a United Nations Security Council resolution to end the war in Lebanon--leaving Israel as the loser. The announcement ironically comes just one day after US President George Bush took the seemingly significant step of finally correctly branding Islamism, or Islamic fascism--instead of terrorism--as its enemy during a news conference concerning a foiled Islamist plot to massacre thousands of airline passengers. (Scroll down for the story.)

The UN measure calls for an immediate "cessation of hostilities" followed by a phased withdrawal of Israeli units as the (Shiite dominated) Lebanese army and an expanded UN force move into southern Lebanon. Thousands of French and other troops are expected to strengthen the (anti-Israel) UN peacekeeping force. As part of the deal, Iran's terrorist proxy army, Hezbollah, would pull out from south of the Litani River, 13 miles from the Israeli border, giving Israel something to show for its bloody sacrifices on the battlefield and home front.

But Hezbollah's charismatic leader, Sheikh Hassan Nasrallah, whose defiant stance has electrified the Arab and Muslim worlds, will be able to brag that his forces held their ground against the mighty Israeli military ... while rocketing Israeli cities and towns ... and has lived to fight ... and fire missiles ... another day.

And when and if his forces next open fire and the missiles again fly, he won't have to worry about the expanded UN peacekeeping force, because the proposed Security Council resolution drops authorizing use of force (under Chapter 7) against the Iranian-backed terrorists seeking Israel's doom. The deal also makes no mention of the Israeli soldiers Hezbollah took prisoner in the cross-border raid that precipitated the war.

Apparently, Shiite Iran--which has repeatedly threatened to annihilate Israel and drive the US from the Middle East--is not part of the Islamic fascist axis. One wonders if US Secretary of State Condoleezza Rice has dipped into the Jimmy Carter Kool-Aid--and shared a bowl with her boss. It was Carter, after all, who tried to jump on the Islamist bandwagon by dumping the pro-American Shah of Iran. His UN envoy, Andrew Young, even predicted that the Shah's America-hating replacement, the Ayatollah Khomeini, would eventually be hailed as "a saint." But that's history, as Bush might say, and the issue before the world right now, as Bush told Britain's prime minister, is that the Lebanese "shit" must stop.

Even if it hits Israel in the face, it seems. Which it surely will. The surprising sellout is certain to strengthen Iranian influence in the Middle East and further embolden its Lebanese proxy, Hezbollah. The deal has profound implications for the Jewish State and the West. It smacks of a desperate attempt to appease Iran ahead of its promised response to a Western offer of incentives aimed at persuading the mullahocracy to end its nuclear research program, which Iran insists is for peaceful purposes but the rest of the world knows is anything but peaceful.

When it comes to Iran, it appears that Washington wants to give diplomacy a chance ... until Tehran ... like China's vassal, North Korea ... is too powerful to defeat militarily without fear of nuclear war.

So it goes.

Meanwhile, the Franco-American-authored, Arab-approved UN fix also confirms China's analysis. From the outset of the conflict, as China Confidential has reported, Beijing has seen Iran and Hezbollah as the ultimate winners, inspiring and even uniting Shiite and Sunni Islamists in wholly unprecedented ways. China's special envoy to the region, Sun Bigan, who has been advising and assisting the Arab nations, as we have reported, reportedly believes that Hezbollah is poised to control Lebanon's military and government, just as Hamas has taken over the Palestinian regime. For this reason, sources say, Beijing has urged Iran not to allow Hezbollah to strike Tel Aviv and unnecessarily risk a wider conflict and alienating world opinion, which has tilted--tragically--in Hezbollah's favor.

Will Israel acquiesce? It may feel it has no choice, afraid of losing US support. As of this writing, Israeli Prime Minister Ehud Olmert has accepted the deal, according to Israeli officials, and will recommend that his cabinet approve it in its meeting on Sunday. But the situation could change in a heartbeat.

This much we can safely predict: if Israel signs on to the proposed resolution--on a day in which Hezbollah has again rained scores of rockets down on northern Israel--Olmert is over. No amount of spin will save him. He will be driven from office--and go down in history as the worst prime minister of Israel, a man who presided over its only military defeat.

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The princeling has a rewrite job ahead of him.

As we reported Monday, Liu Yazhou, the so-called princeling--privileged offspring of a powerful, Chinese Communist Party official--who has been given wide latitude to write about military and foreign affairs, while roaming the globe to sharpen his insights and collect intelligence, has reportedly been circulating an essay that clinically dissects America's war on radical Islam.

A supposed key criticism of the unpublished work: Washington's alleged unwillingness to clearly and unequivocally identify its enemy. The "war on terror" term, in Liu's view, is not only a serious misnomer, but a reflection (a) of old thinking stemming from decades of secret support for Islamism as a perceived counterweight to secular radical Arab ideologies, such as nationalism and socialism, and (b) America's traditionally close, but complex, relationship with Saudi Arabia.

Liu's luck, as noted above, is that the essay is still unpublished, because the United States has finally dropped the foolish pretense that it is fighting a strategy or tactic--terrorism. The enemy, as US President George Bush said yesterday during his news conference about the foiled airline bombing plot, is "Islamic Fascism," alluding to the pro-fascist, pro-Nazi roots of the Sunni Muslim Brotherhood, an Egyptian-based movement that has constituted the core of Al Qaeda.

Bush's language change is significant, signaling, among other things, a realization that organized Islam has essentially been captured by its most extreme elements. Islam--a religion--and Islamism--a political ideology and movement--are nowadays for all practical purposes synonymous.

Liu, who is a Lieutenant General and Deputy Political Commissar in the People's Liberation Army Air Force, is a key architect of China's developing Middle East policy, including deepening ties to Iran. He sees the oil-rich, non-Arab, Shiite nation as a revitalized, ancient empire--a rising regional hegemon--which, like China, has been a victim of foreign imperialism and intrigue. In Liu's view, Iran is destined by forces of history and geography to dominate the Middle East, just as China is destined to dominate the world. Their common foe is the US; the war is in fact a clash of civilizations.

Liu also argues that an alliance with Tehran, besides offering energy-starved China access to oil and gas supplies, could also be helpful to Beijing in terms of its need to control its own restive Muslim population, despite religious, ethnic, and cultural differences with Iran.

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Hezbollah lies, Lebanon swears....

Despite denials by Hezbollah and the failed Lebanese state, Iranian fighters and intelligence officers are among the Shiite guerrillas battling Israeli troops in southern Lebanon.

Several Iranians have been killed by Israeli ground forces and air strikes, as reported by Israel's Channel 10 television station, which cited diplomatic sources for its story.

The United States is aware of the development, but chooses to ignore it ... publicly ... because it is reluctant to highlight the Iranian issue ... officially ... while diplomatic efforts to resolve the Iranian nuclear dispute are still underway.

The US is hoping against hope that China--the so-called Responsible Stakeholder and Strategic Competitor--will still prove to be a moderating influence on its Islamist ally.

But that is about as likely as Iran's Hitlerian president, Mahmoud Ahmadinejad, attending a bar mitzva.

Nearly three decades after the overthrow of the pro-US Shah of Iran by the America-hating Ayatollah Khomeini, the non-Arab, oil-rich Shiite nation is fast emerging as the most powerful player in political Islam--and the Middle East. Iran's rise, which is supported by both China and Russia, is the most important development in the region in decades.

And the most frightening for Israel and the US, because the mullahocracy in Tehran is dead serious about destroying the Jewish State and driving the US out of the Middle East. Ahmadinejad is intoxicated with the idea of delivering decisive military blows against his avowed enemies. Missile strikes against Israel--and terrorist attacks against American interests and forces--and the American homeland--have been planned. Hezbollah has no shortage of cells, weapons, money to make good on its threats.

We are in uncharted waters, and the range of possibilities is alarmingly wide. In addition to firing missiles at Tel Aviv, Tehran could deploy troops in a scenario in which the Lebanese government would appeal for Iranian intervention. Syria, which Iran has been trying to suck into the war, could well be preparing to attack Israel. Hezbollah terror cells in the US (and Europe) could be activated, especially against shopping malls, office and apartment buildings, synagogues, churches, schools, and hospitals and other soft targets.

Iran and Hezbollah have been preparing for this conflict for many years; and short of their attacking the US with nuclear, chemical, or biological weapons, they can continue to count on China and Russia for diplomatic and intelligence support--and arms. In addition to Iranian-supplied, Chinese-designed missiles, including some that have been upgraded by China's Stalinist vassal, North Korea, Hezbollah has acquired sophisticated Russian-made missiles, through Syria, which have been used to hit Israeli tanks and other armored vehicles.

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China's Communist Party rulers are preparing for the fifth anniversary of an event they privately cheered but publicly condemned--9/11.

This time around, the thugs running Rising China want to avoid any embarrassing incidents; however, they may allow a certain level of anti-American agitation on nationalistic, state-sponsored Internet chat rooms and websites.

Here's a brief rundown of what went down on September 11, 2001.

The Chinese government condemned the attacks and offered condolences to the United States. But we now know that Chinese President Jiang Zemin obsessively watched and re-watched pictures of the hijacked aircraft crashing into the World Trade Center.

Jiang was fascinated by the spectacle of a terrorist band bringing the mighty US to its knees.

And though he criticized terrorism generally, Jiang rejected US President George Bush's "axis of evil" rhetoric. In April 2002, he even paid a state visit to Iran.

With the support of Communist Party leaders, crude DVD documentaries about the attacks appeared on the streets and in video stores, displayed between the piles of pirated Jurassic Park and Planet of the Apes DVD. The videos were all anti-American, pushing the idea that the US was responsible for the catastrophe--not because decades of secret support for Islamists blew back in America's face, but because of alleged US arrogance and insensitivity to the plight of developing nations.

The videos were sickeningly sensational. The cover art of "The Century's Great Catastrophe," for instance, put out by a state-owned publisher, featured the flaming twin towers aflame and portraits of US President George W. Bush and Osama bin Laden. The video combined TV news footage with Chinese voiceover commentary--and the menacing shark theme from Jaws.

A sample piece of narration: "This is the America the whole world has wanted to see. Blood debts have been repaid in blood. America has bombed other countries and used its hegemony to deny the natural rights of others without paying the price. Who until now has dared to avenge the hurts inflicted by unaccountable Americans."

Other outrageous Chinese videos incorporated pirated clips from the films Wall Street, Godzilla, and The Rock.

State-run companies also produced books and video games glorifying the attacks.

The Chinese leadership also wants to bury the popular reaction to 9/11, brought on by years of indoctrination. Most Americans would be shocked to learn that isolated but still significant celebrations spontaneously erupted in major cities. People poured into the streets, danced, cheered, lit firecrackers.

In the aftermath of the attacks, Chinese chat rooms and news forums were dominated by gloating at the so-called US comeuppance. Party propagandists said 9/11 was payback for perceived American attempts to contain China's emergence as a world power.

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The mastermind behind the coordinated Arab demand for an immediate Israeli troop withdrawal from Lebanon is China's special envoy to the Middle East, Sun Bigan, who is currently visiting the region.

Sun, who is a veteran diplomat and one of China's leading Arabists, called Monday for an immediate unconditional ceasefire in the war between Israel and the Lebanese proxy army of Beijing's non-Arab Islamist ally, Iran.

"Israel and Lebanese Hezbollah should end hostilities immediately to avoid further deterioration of humanitarian crisis in Lebanon," Sun told a press conference in Damascus following a closed-door meeting with Syrian Vice President Farouk al-Shara.

Sun expressed China's willingness to intensify "consultation and coordination" with Arab nations.

As China Confidential reported on Sunday, Beijing is maneuvering to become a trusted intermediary--and maybe even a mediator--in the Middle East conflict. Sun is advancing the argument that the United States has lost credibility and influence in the region as a result of its steadfast support for Israel, and that a more neutral power--such as China-- is urgently needed to help end the fighting and reduce regional tensions.

The real objective is to weaken the US position--and ultimately drive the US from the region altogether.

Toward this end, China has been a major arms supplier to Hezbollah's sponsor. In the context of energy deals, Beijing has sold Iran tanks, planes, artillery, and cruise, anti-tank, surface-to-surface and anti-aircraft missiles. Chinese-designed missiles--including some that have been upgraded and improved by North Korea--have found their way into Hezbollah's arsenal of aerial terror.

China is also providing covert technical assistance to Iran's disputed nuclear development program--and supporting Iran diplomatically with a promise to block meaningful United Nations Security Council sanctions against the wannabe nuclear power.

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Another win for the blogosphere.

The venerable Reuters news agency has been caught red-handed--by bloggers--photoshopping photos of Israeli air strikes in Lebanon in order to exaggerate the negative impact of the images.

The scandal recalls the Dan Rather/CBS TV News document fraud scandal that hastened the departure of the world's weirdest--and most boring--television news anchor. Now hosting a high-definition news show with fewer viewers--and less influence--than some of the blogs that contributed to his downfall, Rather remains dazed and confused about the affair, which did more to expose liberal political bias at CBS than a score of academic studies could ever hope to achieve.

In the case of Reuters, the bias begins at the top--with senior management. The photofraud reflects a distinct, anti-American, anti-Israeli bias on the part of the agency's editors.

Since 9/11, Reuters has bent over backwards to avoid using the word terrorist to describe ... terrorists. Within days of the horrific attacks, the agency's top news editor, Stephen Jukes, banned the "T" word in favor of "militant" and "guerrilla." The policy was initially applied to Al Qaeda and Taliban terrorists. It was later broadened to cover Palestinian suicide bombers and other Islamist murderers.

Regarded by many as the premier international news service, Reuters was ironically founded by a German Jew, Paul Julius Reuter, in 1840.

Japanese and American analysts, according to a Tokyo newspaper, have confirmed what China Confidential reported on July 21: North Korea's provocative missile tests may have been successful.

The newspaper says the US and Japan now regard six of the seven launches as successful. The missiles apparently fell inside the targeted sea zone.

The only one that ended in failure is believed to be the launch of Pyongyang's new long-range missile, known as the Taepodong 2, which is capable of reaching the US.

China Confidential, however, has reported that the Taepodong 2 may have done better than initially thought, staying aloft for a full two minutes--not 40 seconds as claimed by the US State Department--before plunging into the sea.

As we reported last week, analysts also believe that North Korea has developed an ability to strike targets all over Japan with pinpoint accuracy. And, as we have also reported, the Stalinist North has allegedly built a series of underground missile bases for striking Japan and South Korea.

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An unpublished essay by a leading Chinese military theoretician reportedly provides further insights into Beijing's view of the United States and its war with radical Islam.

Sources say the essay, by Liu Yazhou, has thus far been selectively circulated to top military officers and Communist Party officials, including President Hu Jintao and his Leading Small Group on foreign affairs.

Liu, as China Confidential has previously reported, is an extremely influential Lieutenant General and Deputy Political Commissar in the People's Liberation Army Air Force. A prolific author, Liu is best known for his essays and books on international affairs and strategy. The 51-year-old non-combatant officer is a dedicated nationalist and hardliner toward the US, Japan, and Taiwan--and the only serving PLA general to have visited the self-ruled island. He has traveled extensively overseas, including a stint in the US as a visiting professor at prestigious Stanford University.

Liu is also a son-in-law of the late Chinese president Li Xiannian, and a so-called princeling--meaning, a privileged offspring of a high Communist Party official--who has also been linked to the Shanghai clique led by China's unpopular former president, Jiang Zemin.

Liu's wide-ranging views include the idea that the West is engaged in a losing civilizational clash with rising, radical Islam, with which China must forge a strategic alliance via deepening ties to Iran. Like other PLA theoreticians, he extols the potential of "unrestricted warfare"--use of a variety of methods to isolate, weaken and ultimately defeat the enemy--and "winning without fighting" whenever possible, i.e. making maximum use of deception and diplomacy in the face of a technologically superior enemy, such as the "US hegemon." Liu also likes to talk in terms of the "Maoization" of the military, though it is not always clear what he means by this.

His clinical analysis of the US position with respect to radical Islam, however, is quite clear, according to our sources. Ironically, Liu's essay is supposedly in tune with the views of some US conservative critics of the Bush administration. His main point, reportedly, is that the US faltered following the 9/11 attacks when it failed to identify radical Islam, or Islamism, as its enemy and instead launched a "war on terror," sending a confused--and confusing--message to the American people. Sources say Liu argues that the reluctance to name Islamism as an enemy reflects (a) US unwillingness to completely break with decades of secretly supporting rightwing Islamic fundamentalism as a counterweight against secular radicals in the Middle East, and (b) US "weakness," by which he seems to mean an essentially idealistic and, in his opinion, ultimately self-defeating faith in its own democratic and humanitarian ideals, which prevent the US from taking truly drastic military action when necessary.

Liu reportedly refers to the Iraq war as a strategic blunder that nevertheless underscores the increasing importance of air power in modern warfare. He is said to argue that any force seeking to combat the US must develop its own air power--from the hijacked airplanes Al Qaeda terrorists used to attack the US on 9/11 to the rockets and missiles of Hezbollah.

Liu's essay apparently conforms with current PLA thinking about the war in Lebanon between Israel and Iran's proxy army. Yesterday, China Confidential reported that PLA analysts contend that Hezbollah cannot be decisively defeated and disarmed without World War II-style flattening of the 20 or more Lebanese villages in which Hezbollah hides and houses its Iranian-supplied missiles. An aerial bombardment of this magnitude would mean massive civilian casualties--which increasingly isolated Israel can't afford. Therefore, PLA strategists are said to argue, Israel is restrained by sensitivity to world opinion from militarily crushing its enemy.

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China is maneuvering to become a go-between--and maybe even a mediator--in the Middle East conflict.

This is the main reason for Beijing's dispatch of special envoy Sun Bigan (seen on the left) to the region. Sun left Sunday to visit Syria, Lebanon, Israel, Egypt and Saudi Arabia.

Sun will exchange views with different parties on Middle East issues, especially the situation in Lebanon, in an attempt to help reduce tensions in the region, according to China's state-owned Xinhua news agency.

A leading foreign ministry Arabist, Sun is China's former ambassador to Saudi Arabia, Iraq and Iran. He replaced Wang Shijie as China's new special envoy on Middle East issues on April 1.

China Confidential has learned that Sun will seek to effectively encourage the view that the United States has lost credibility and influence in the region as a result of its steadfast support for Israel in the war against Hezbollah (a proxy of China's ally, Iran), and that a more neutral power is urgently needed as a mediator, or, at the very least, as a trusted intermediary.

A rising ... non-Western ... power. Like China.

Beijing has provided humanitarian aid to Lebanon and has called for an immediate, unconditional ceasefire in the fighting, in opposition to the draft United Nations Security Council resolution worked out by the US and France, which, while calling for an immediate truce, also lays out a scheme for a permanent ceasefire and political settlement.

Hezbollah and Lebanon rejected the proposed measure; and Hezbollah hit Israel with the deadlest rocket barrage yet, killing more than 15 people in a series of strikes, including a late-day attack on Haifa that caused at least three deaths. [BULLETIN: Our sources in Israel report that the rocket that reportedly struck Kibbutz Kfar Giladi, killing 12 army reservists, actually hit the parking lot at Tel-Hai, a popular tourist site and symbol of Zionist pioneering courage. The legendary Zionist leader, Joseph Trumpeldor--hero to generations of Israeli youth from all sides of the political spectrum--was killed there in 1920 during the defense of a Jewish settlement against Syrian-sponsored Arab terrorists. In Israel, Tel Hai has come to symbolize the few resisting the many. The name itself--Hebrew for Hill of Life--was adopted as a greeting by the Betar Zionist youth movement, whose most famous leader, Menahem Begin, was elected Prime Minister of Israel after a long political career as an opposition leader.]

Sun is expected to focus on Israel's assault in keeping with China's deepening ties to radical Islam, including Shiite Iran and Hezbollah and Sunni Hamas.

The start of his mission coincided with news that three Chinese UN peacekeepers were injured in crossfire between Israeli troops and Hezbollah fighters. A rocket blast in southern Lebanon injured three Chinese peacekeepers just hours after Chinese Foreign Minister Li Zhanoxing reportedly called on the UN to ensure the security of UN peacekeepers in the Middle East.

The official Xinhua news agency quoted Luo Fuqiang, a Chinese military officer who heads a sapper battalion, as saying that the peacekeepers were injured by a Hezbollah rocket, which landed near the UN outpost as an Israeli military unit passed by a village close to the outpost. The report not specify where the attack occurred or whether the peacekeepers had been hospitalized.

A Chinese observer, Lt. Gen. Du Zhaoyu, was among four UN peacekeepers killed last month in southern Lebanon by an accidental Israeli attack on an observer outpost. The other three were from Finland, Austria and Canada.

Du's death revealed for the first time the presence of Chinese military personnel in southern Lebanon. Our sources say Du, like many UN observers, was engaged in espionage--in this case, reporting intelligence to Beijing for forwarding to Tehran.

In related news, China Confidential has learned that Beijing remains confident that Hezbollah will prevail--politically, if not militarily--in the current conflict, strengthening Iran's regional influence and prestige. People's Liberation Army analysts contend that Hezbollah cannot be truly defeated and disarmed without World War II-style flattening of the 20 or more Lebanese villages in which Hezbollah hides and houses its Iranian-supplied missiles. An aerial bombardment of this magnitude would almost certainly result in massive civilian casualties--which increasingly isolated Israel can't afford.

Therefore, PLA strategists are said to argue, Israel is restrained by sensitivity to world opinion from militarily crushing its enemy.

The analysis conforms with PLA theories of "unrestricted warfare," including terrorism, information war, and "lawfare," which in principle make it possible for smaller, technologically disadvantaged forces to fight--and defeat--great powers.

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Yet another reminder that Rising China, at the end of the day, is a brutal, backward dictatorship.

In an incredibly cruel response to a rabies outbreak in late July, a county in southwestern China killed more than 50,000 dogs--including at least 4,000 who had been immunized against the disease.

But in land where dissidents and prisoners of conscience are jailed, tortured--and killed for their internal organs--the massacre of man's best friend should come as no surprise. Chinese Cops have a taste for blood.

Still, the reports from Yunnan province's Mouding county are shocking, even by Chinese standards of animal cruelty.

Dogs being walked were taken from their owners and beaten to death on the spot. Some killing teams entered villages at night, creating noise to get dogs barking, then homing in on their prey. Animals who were not clubbed to death were killed by poisoning or electrocution.

Owners were offered 63 cents per animal to kill their own dogs before the extermination teams were sent in to do their dirty work.

True to form for despotic China, the five-day slaughter spared military guard dogs and police canine units.

Dogs trained to kill and intimidate are apparently the only animals in official favor.

The crude, cold-blooded slaughter highlights profound weaknesses in China's health care infrastructure. Only three percent of dogs are reportedly vaccinated against rabies and more than 2,000 people die of the disease each year.

The killings prompted calls for a boycott of Chinese products from the group People For the Ethical Treatment of Animals.

"We are urging everyone to actively boycott--not a word we use lightly-- anything from China, given the bludgeoning killing of thousands of dogs," PETA President Ingrid Newkirk said.

The organized protest is long overdue. Millions of companion animals are killed for their fur every year in China. The dogs and cats are skinned alive before dying slow, agonizing deaths. The dog seen in the above photograph was killed in this manner minutes after the picture was taken.

Dogs and cats can be found in China's atrocious live-animal markets. Along with birds, boars, deer and reptiles, the animals are confined to wire cages in which they can barely move. The animals are routinely skinned alive and hacked apart, piece by piece, until they bleed to death.

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Of all the world's oil companies, only one is also a merchant of death.

Of course, it is a Chinese Communist concern.

In the context of Chinese "energy diplomacy," the state-owned China National Petroleum Corporation supplies the Sudanese military and its southern Sudanese militia murderers with Chinese-made tanks, fighter planes, bombers, helicopters, machine guns, firearms, rocket-propelled grenades, and ammunition.

Chinese arms, as confirmed by a recent Amnesty International report, sustain conflict and human rights abuses; and Chinese arms fuel genocide in Darfur. Small arms shipped to Khartoum by China have been the regime's primary means of providing weapons to its deadly Janjaweed Arab militia, which are responsible for most of the human destruction and displacement in Darfur.

Beijing's arms trade with genocidal, Islamic-leaning Sudan is an old story. Weapons deliveries from China to Sudan have included ammunition, tanks, helicopters, and fighter aircraft. China has also been a major supplier of antipersonnel and antitank mines.

Sources say the large majority of weapons in Khartoum’s arsenal are of Chinese manufacture, including not only light weapons, but also medium and heavy arms, even military aircraft, as noted above.

On the diplomatic front, authoritarian China has never criticized Sudan for its human rights abuses. Worse, Beijing has deliberately--brazenly--disregarded human rights concerns in connection with Chinese oil development in southern Sudan. The activities have involved brutal civilian destruction and ethnic clearances to create a vast zone for Chinese operations.

There is reason to believe that China intentionally fuels the conflict in Sudan to deter Western companies from entering the country.

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Regardless of exactly how the war in Lebanon ends for China's ally, Iran, and its terror proxy, Hezbollah, Beijing sees plenty of gains--and good times--ahead in the Middle East.

Communist Party propagandists and government think tank researchers contend China will increasingly be regarded as an alternative to the "hegemony" of the United States in the region. In other words, not only is energy-hungry China a potential economic partner for countries in the Middle East; it is also a potential political counterweight to US power and influence. The Chinese are signaling and suggesting to their Arab and Iranian friends that increased Chinese involvement in the Middle East means more freedom--from the US.

The ultimate objective of Chinese foreign policy is to replace the US as the global Hegemon. Edging the US out of the Middle East is a critically important strategic aim, which China's mercantilist "energy diplomacy" is designed to support. Seeking access to energy resources, Chinese state-run oil and gas behemoths are in a position to offer countries incentives no conventional company can ever match, including economic and military assistance, access to Chinese markets, and meaningful diplomatic backing, especially at the United Nations, where China enjoys veto power at the Security Council.

Power that Beijing is not afraid of using, to the delight of its anti-American allies and partners. In 2004, for example, China scored political and propaganda points with the hate-America crowd when it threatened to veto a US-sponsored resolution to impose sanctions on Sudan, where China has invested more than $8 billion.

More recently, China has said that it will block any UN resolution on nuclear wannabe Iran that includes threat of military force. Iran provides China with more than 10 percent of its energy needs; and China has invested a staggering $70 billion in Iran's oil and gas industry. (China went along with a toothless Security Council resolution condemning Beijing's nuclear-armed vassal, North Korea, for its provocative July 4 missile tests, after successfully cleansing the measure of language referring to use of force.)

All told, China, which is the world's second largest oil importer after the US, gets around 45 percent of its total oil imports from the Middle East. Over the next decade, that number could rise to 70 percent.

Saudi Arabia would like that. Around 17 percent of China's oil presently comes from Saudi Arabia. The Saudis are eager to sell more oil and gas to China--as a way of reducing Riyadh's dependence on the US. Chinese President Hu Jintao recently visited Saudi Arabia, following his visit to the US and meetings with President George Bush. Energy deals were the main topic of discussion in Saudi Arabia.

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The pro-China appeasement crowd will have to bend over backwards to spin this piece of news.

Following Japan's assertion that Beijing's nuclear-armed vassal, North Korea, is capable of launching pinpoint missile strikes on Japan (scroll down for the story), South Korea's news agency says the Stalinist North is building a series of underground missile sites along its east coast that could target Japan with intermediate-range rockets.

More than 2,000 missiles are already in the new bases, according to a report published by the Yonhap news agency. The report, written by Yun Deok-min, a security expert at the state-funded Institute of Foreign Affairs and National Security, says the bases provide "a powerful deterrent."

North Korea is believed to have 600 short-range Scud-type missiles and 2,000 Rodong missiles, plus an undetermined number of long-range Taepodong-2 missiles, capable of reaching the United States.

Of course, there is a Chinese angle, and it is disturbing, to say the least. The South Korean think tank report says North Korea is also believed to have obtained Chinese technology through China's Islamist ally, Iran, in developing the Taepodong-2.

"New underground missile bases have been built or are under construction around the border with China and along the east coast," the report says, adding that those "on the east coast could be seen as bases for medium- or long-range missiles targeting Japan and US military bases in Japan."

North Korea fired seven missiles on July 4 (US time), including the long-range Taepodong-2, which US officials said failed seconds into its flight and fell into waters between Japan and the Korean peninsula.

But, as previously reported, China Confidential has learned that the Taepodong-2 flew for roughly two minutes before plunging into the sea.

US Assistant Secretary of State Christopher Hill, the top US envoy to talks on the North's nuclear program, did not confirm our two-minute missile flight report; but he did confirm our report that Iranians observed Pyongyang's missile launch. Hill is a leading dove on the North Korea issue--an advocate for talking for the sake of talking. In private talks, Bush administration hawks have referred to him as "Kim Jong-Hill."

The South Korean report explains that the Taepodong-2 is the product of joint efforts with Tehran, coinciding with Iran's development of the Shehab-5 and Shehab-6 missiles.

"It is highly possible that design and technology from China, which has an arms trade with Iran, were used", the report says.

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Japan says North Korea has developed ballistic missiles capable of "pinpoint" attacks--on targets in Japan.

In a new annual white paper on national security, Japan's defense ministry says it is "gravely concerned" about the development, deployment and proliferation of ballistic missiles in North Korea.

Saying North Korea deployed medium-range ballistic missiles that could put all of Japan within their range of about 810 miles, the white paper adds: "It is thought that their precision is so high that they can carry out pinpoint attacks on specific facilities."

The paper does not include a detailed analysis of the North Korean launches because most of the text had been completed by early July.

China Confidential has learned that the Japanese government is increasingly alarmed by intelligence reports about the North Korean missile program, which is more advanced and robust than commonly believed.

In 1998, Pyongyang test-fired a missile over Japan. Analysts in Tokyo say the secretive Stalinist regime has up to 200 missiles that could reach most of Japan, including Tokyo.

On July 4, North Korea defied Japanese and American warnings by test-firing several missiles into the Sea of Japan.

North Korea is a Chinese vassal, dependent on Beijing for food and fuel.

The white paper also calls on China to disclose more data about is military expansion and buildup to allay regional fears.

The white paper was approved at a cabinet meeting. In a first for the defense agency, a 429-page English version of the report was published on the agency's website.

In an effort to increase readership of the white paper, the defense agency also plans to publish a version of it as a manga comic book.

"We'd like to be able to reach the younger generations, those in their 20s and 30s," an agency spokesperson told reporters.

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Like China and Russia, the European Union does not intend to add Iran's terrorist proxy army, Hezbollah, to its official terror list.

"Given the sensitive situation, I don't think this is something we will be acting on now," Finnish Foreign Minister Erkki Tuomioja, told a news conference following an emergency meeting of EU foreign ministers in Brussels.

Tuomioja's comments were in response to a letter signed by 213 members of the United States Congress sent to EU foreign policy chief Javier Solana asking that the EU add Hezbollah to its list of terrorist organizations.

For the record, Hezbollah is a terrorist organization through and through. The fact that it sponsors social services and schools, and also participates in politics is irrelevant. The Nazis did all that, too.

Among other crimes, Hezbollah is responsible for kidnapping and torturing to death United States Marine Colonel William R. Higgins and Beirut CIA station chief William Francis Buckley. That was in 1982. Hezbollah also kidnapped at least 30 other Westerners between 1982 and 1992, including US journalist Terry Anderson, British journalist John McCarthy, the Archbishop of Canterbury's special envoy Terry Waite and Irish citizen Brian Keenan.

In April, 1983, Hezbollah was responsible for the bombing of the US Embassy in Beirut that killed 63 people. Hezbollah was also behind the October, 1983 suicide truck bombing that killed 241 US marines in their barracks in Beirut.

On September 20, 1984, Hezbollah bombed the replacement US Embassy in East Beirut. The attack killed 20 Lebanese and two US soldiers.

In 1985, Hezbollah carried out the 1985 hijacking of TWA Flight 847 en route from Athens to Rome.

In the early 1990s, Hezbollah carried out two Argentine terrorist attacks: the 1992 Israeli Embassy bombing in Buenos Aires, which killed 29 people, and an attack two years later on a Jewish community center there that killed 85 people.

On July 26, 1994, eight days after the community center bombing, the Israeli Embassy in London was car-bombed by two Palestinians. It is now known that Hezbollah was responsible for the bombing.

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While Cuba's immediate future may be in doubt, this much seems certain: the Chinese are coming!

With help from China, Canada, and Spain, the Communist dictatorship is drilling for oil less than 60 miles off the coast of Florida. A total of 36 huge rigs are planned.

The Cuban government has also signed a contract with China's oil and gas company, Sinopec, to explore areas around the island thought to contain oil deposits.

But the presence of Chinese oil rigs within view of the Florida coastline is a dramatic development, angering many Americans.

Even worse, from an American perspective, Iran has promised to fund both exploratory drilling and building refineries on the island, according to the Tehran Times.

Russia also has expressed its interest in possible commercial quantities of oil and natural gas reserves.

Offshore, Cuba is exploring in its half of the 90-mile-wide Straits of Florida within the internationally recognized boundary as well as in deep-water areas of the Gulf of Mexico. Havana has high hopes for a major oil find, after decades of searching.

With Soviet help, Cuba discovered the Varadero Oil Field in 1971. This reservoir, within five miles of Cuba's northern coast, today yields about 40 percent of Cuba's total production--about 75,000 barrels a day of poor-quality, heavy crude.

In July 2004, however, the Spanish oil company Repsol-YPF, working in partnership with Cuba's state oil company, CUPET, identified five possibly high-quality oil fields in deep waters of the Florida Straits, 20 miles northeast of Havana.

Seven months later, a report by the United States Geological Survey confirmed that the North Cuba Basin held a substantial quantity of oil. Cuba quickly divided the 74,000 square mile area into nearly 60 exploration blocks before inviting foreign oil companies to explore pursuant to production-sharing deals.

China wasted no time in coming in. The Middle Kingdom has become Cuba's second-biggest trading partner, resulting in a wide range of bilateral ties, including even an agreement to dispatch emergency disaster aid to Cuba in the event of a hurricane or other havoc-wreaking act of nature.

Cuba is also slated to serve as a conduit for the export of traditional Chinese medicine throughout Latin America.

Cuba's interest in Chinese medicine dates to the 1990s, when Cuban military hospitals began treating cancer patients with shark cartilage. The US television news magazine program "60 Minutes" reported on the research, triggering a boom in sales of shark cartilage food supplements and other natural remedies. Meetings with visiting American, European, and Australian experts in natural medicine led to increased interest in Chinese medicine as a possible compliment to Western therapies.

Cuba's nickel deposits are also attracting Chinese investors. In November 2004, Beijing invested $500 million to resume the construction of a ferronickel plant abandoned by the Soviet Union. Havana hopes to export 4,000 tons of nickel annually from through 2009. The mineral, when combined with iron produces steel and is an essential building block for Cuban industrial development.

China's investments in Cuban nickel have significantly spurred exports of the commodity, providing the Cuban government with a steady revenue stream at a time when world nickel prices are soaring.

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Chinese military analysts are watching events unfold in the Middle East with keen interest, and not only because Chinese-designed missiles have been used by the proxy army of China's ally, Iran.

The guerrilla warfare roots of the People's Liberation Army run deep; and PLA strategists and historians are said to be fascinated by the ways in which Shiite Lebanese Hezbollah fighters have been able to dig in and hold out against the Israel Defense Forces.

The Israeli bombing campaign is a key focus. Some generals have seized on the difficulties and limitations of the campaign to revive criticisms of powerful PLA Air Force officers who have been outspoken air power advocates.

With an eye on a possible future conflict with Taiwan--the PLA has some 800 missiles pointed at the breakaway island and is adding 100 a year--Chinese officers are also paying close attention to Israel's remarkably successful civil defense program, which has kept civilian casualties to a minimum in the face of relentless rocket attacks on the Jewish State.

More revealing, perhaps, is the Chinese interest in Hezbollah's effective information warfare campaign. The PLA puts great emphasis on information/psychological warfare, considering it part of the new "unrestricted warfare" that nations must master to translate military accomplishments on the battlefield into permanent political victories. Sources say PLA analysts are monitoring the Internet, impressed by the outpouring of pro-Hezbollah opinion on anti-American, anti-Israeli websites and blogs aimed at Arabs and Muslims and radical left- and right-wing websites and blogs.

"Lawfare" is also part of unrestricted warfare. Chinese analysts expect Iran's proxy army and Arab and European supporters to step up efforts to hit Israeli leaders with war crimes charges stemming from Israeli air raids resulting in civilian deaths.

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