FOREIGN CONFIDENTIAL

On November 13, 2008 China Confidential reported:

While the price of gold may be falling in tandem with that of oil, a major gold producing nation that also happens to be a major oil producer is considering making its own currency convertible into gold.

The currency is the ruble. Russian officials, this reporter has learned, are seriously considering proposals for a gold-backed ruble or a gold-backed special drawing right.

Also under consideration in Moscow: ideas for a currency backed by a basket of commodities, including gold and oil.

The Telegraph reported today:

Arkady Dvorkevich, the Kremlin's chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.

Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.

Click here to continue.

With tensions already rising due to the Chinese navy becoming more aggressive in asserting its territorial claims in the South China Sea, the U.S. Navy seems to have yet another reason to be deeply concerned.

After years of conjecture, details have begun to emerge of a "kill weapon" developed by the Chinese to target and destroy U.S. aircraft carriers.

First posted on a Chinese blog viewed as credible by military analysts and then translated by the naval affairs blog Information Dissemination, a recent report provides a description of an anti-ship ballistic missile (ASBM) that can strike carriers and other U.S. vessels at a range of 2000km.

The range of the modified Dong Feng 21 missile is significant in that it covers the areas that are likely hot zones for future confrontations between U.S. and Chinese surface forces.

The size of the missile enables it to carry a warhead big enough to inflict significant damage on a large vessel, providing the Chinese the capability of destroying a U.S. supercarrier in one strike.

Because the missile employs a complex guidance system, low radar signature and a maneuverability that makes its flight path unpredictable, the odds that it can evade tracking systems to reach its target are increased. It is estimated that the missile can travel at mach 10 and reach its maximum range of 2000km in less than 12 minutes.

Supporting the missile is a network of satellites, radar and unmanned aerial vehicles that can locate U.S. ships and then guide the weapon, enabling it to hit moving targets.

The ASBM is said to be a modified DF-21.

While the ASBM has been a topic of discussion within national defense circles for quite some time, the fact that information is now coming from Chinese sources indicates that the weapon system is operational. The Chinese rarely mention weapons projects unless they are well beyond the test stages.

If operational as is believed, the system marks the first time a ballistic missile has been successfully developed to attack vessels at sea. Ships currently have no defense against a ballistic missile attack.

Along with the Chinese naval build-up, U.S. Navy officials appear to view the development of the anti-ship ballistic missile as a tangible threat.

After spending the last decade placing an emphasis on building a fleet that could operate in shallow waters near coastlines, the U.S. Navy seems to have quickly changed its strategy over the past several months to focus on improving the capabilities of its deep sea fleet and developing anti-ballistic defenses.

As analyst Raymond Pritchett notes in a post on the U.S. Naval Institute blog:

"The Navy's reaction is telling, because it essentially equals a radical change in direction based on information that has created a panic inside the bubble. For a major military service to panic due to a new weapon system, clearly a mission kill weapon system, either suggests the threat is legitimate or the leadership of the Navy is legitimately unqualified. There really aren't many gray spaces in evaluating the reaction by the Navy…the data tends to support the legitimacy of the threat."

In recent years, China has been expanding its navy to presumably better exert itself in disputed maritime regions. A recent show of strength in early March led to a confrontation with an unarmed U.S. ship in international waters.


-USNI

As the new American President prepares to take the world stage at the G20 summit in London, his Third World orientation is increasingly clear--and alarming.

Obama's nominee for State Department legal adviser could be a future Supreme Court pick. He believes U.S. law should be based on foreign precedent, and, astonishingly, that even barbaric Islamic law could have a home in the United States. Is this the effective end of America?

IBD observes:

We have commented many times on the opinion of a number of U.S. Supreme Court justices that American jurists should include foreign law and precedent in their decisions. In several prominent cases, this has already happened.

In a speech in South Africa, Justice Ruth Bader Ginsburg called the March 2005 Roper v. Simmons decision, in which a 5-4 majority ruled against executing murderers who were 17 or younger, "perhaps the fullest expressions to date on the propriety and utility of looking to the 'opinions of (human)kind.' "

More recently, Justice Stephen Breyer said: "We see all the time . . . how the world really . . . is growing together. The challenge (will be) whether our Constitution . . . fits into the governing documents of other nations." Whether our Constitution fits?

Agreeing with Ginsburg and Breyer is one Harold Koh, a former dean of Yale Law School who's been nominated by President Obama to be the State Department's legal adviser. He's an advocate of what he calls "transnational legal process" and argues that the distinction between U.S. and international law should vanish.

Koh believes laws of places like Zimbabwe and Sri Lanka should carry equal weight with the laws of Virginia and South Dakota, and that it's "appropriate for the Supreme Court to construe our Constitution in the light of foreign and international law" in its decisions.

He also believes foreign law trumps U.S. law on issues such as the death penalty....

Click here to continue.

Translation: "The situation is definitely improving. Now everybody is hurting."

Jonathan Tirone reports:

North Korea’s government vowed to wage war against Japan if Japanese defense forces try to shoot down a missile that the communist nation says will carry a communications satellite.

Continue here.

The escalation in North Korean rhetoric comes in the wake of reports that the nuclear-armed Stalinist/Kimist state has developed nuclear warheads for its missiles, as first reported by China Confidential. Scroll down for the stories.

China Confidential analysts believe North Korea is capable of attacking Japan and South Korea--and U.S. forces in the South. The threat from the North--which is cooperating closely with Iran--is much more serious than the Obama administration is admitting.

UPDATE: U.S. Secretary of State Hillary Clinton today defended Japan's right to defend itself against the North Korean rocket, calling the pending launch "provocative." Read about it here.

A journey of a thousand miles begins with one step.


China has taken the first step toward making the yuan the world currency. Click here for the story.

Amid the Obama administration's attempts to appease the Taliban by reaching out to supposedly "reconcilable"--"non-Al Qaeda"--elements of the clerical fascist movement, Pakistan's top Taliban commander says his group will soon attack Washington, DC. Click here for the story.

He may not be bluffing. Counter-terrorism experts believe that Al Qaeda, the Taliban, and other Islamist terrorist groups--including, possibly, Hezbollah--are planning Mumbai-style assaults on American cities.

Weakness invites aggression. Any and all attempts to appease radical Islam, including Islamist terrorists and Islamist terrorist-sponsoring nations, are bound to fail. Appeasement of radical Islam will not prevent war and terrorism; instead, it will lead to more war and more terrorism.

By Riki Ellison



EDITOR'S NOTE: The following essay is excerpted from a letter that Ellison, chairman and founder of the Missile Defense Advocacy Alliance, sent to U.S. Secretary of Defense Robert M. Gates, urging him to make sure that America's missile defense assets are all in place to protect Alaska, Hawaii and other parts of the country prior to North Korea's planned missile launch.



One of the United States' most valuable assets and the best discriminating and tracking sensor for ballistic missile defense, the Sea Based X Band Radar, has not been deployed and has been docked for the past several months at Ford Island, Pearl Harbor, Hawaii. The SBX was the main sensor in the recent successful long range ballistic missile intercept on December 5, 2008 providing the primary targeting information for the Ground Based Missile Interceptor out of Vandenberg Air Force Base, Ca. that successfully intercepted a long range ballistic missile from Kodiak Island, Alaska.

The December 5th, 2008 test simulated a North Korean long range missile threat using the current U.S. missile defense deployed assets designed including for a long range ballistic missile intercept. The SBX was also successfully deployed and used with the Aegis Sea Based Missile Defense System for the February 21, 2008 successful NRO satellite shoot down which had a one in 45 chance of harming human life if not intercepted. The SBX is a self propelled X-band radar and has a sea speed of up to 10 knots per hour.

If deployed, the SBX can begin to emit its sensor 50 or so miles from Hawaii and can become effective by providing sensoring information to the deployed long range missile defense system in place today. The SBX cost $950 million dollars to build and costs additional tens of millions of dollars to maintain and operate annually.

The azimuth, or launch direction, for an ideal space orbital launch from North Korea using optimal rotation of the earth is in the mid-80s, which over flies the country of Japan and heads east towards the Pacific Ocean. The azimuth for a long range ballistic missile from North Korea to Hawaii is in the similar 80s degree range. North Korea has declared two "clear zones" on either side of Japan for the first and second rocket stages accounting for the debris falling from their rocket or missile launch. The North Korea trajectory following that flight path would terminate close to Hawaii if the rocket failed to achieve orbit or was a long range ballistic missile launch.

The SBX is the most powerful and most capable sensor to discriminate the debris, payload and a possible reentry vehicle in detail from a North Korean long range missile or rocket launch traveling at extreme high speeds across the Pacific Ocean.

Intelligence Agencies Reportedly Confirm China Confidential Story


Breaking news.

There is confirmation of China Confidential's assessment of the North Korean nuclear threat.

Last Wednesday, China Confidential reported:

The [U.S.] administration line is that Pyongyang lacks the technology (a) to reliably and accurately hit U.S. territory, and (b) to miniaturize nuclear weapons into warheads for placement atop missiles.

All of which may not be true. China Confidential analysts say North Korea's Taepodong-2 missile poses a serious potential threat to U.S. national security. Moreover, the North has been making major advances in warhead technology--and may be sharing the knowhow with Iran.

AFP is reporting that

intelligence agencies have obtained information that North Korea has assembled several nuclear warheads for its medium-range Rodong missiles capable of targeting Japan, an analyst said on Tuesday.

Daniel Pinkston, senior analyst with the Brussels-based International Crisis Group, said he had received the information from agencies he declined to identify.

'Intelligence agencies believe the North Koreans have assembled nuclear warheads for Rodong missiles, which are stored at underground facilities near the Rodong missile bases,' Mr Pinkston told AFP.

He said the agencies believe that probably five to eight warheads have been assembled.

Click here to continue.

Scroll down to read the March 25 China Confidential story, "US Unofficially Downplaying North Korean Threat."

As first reported by China Confidential (scroll for the story), North Korea is using two captured American journalists as hostages ahead of its planned launch of a ballistic missile capable of reaching North America.

Jonathan Thatcher reports from Seoul:

North Korea said on Tuesday it would put on trial two U.S. journalists arrested earlier this month on its border with China, accusing them of "hostile acts".

The planned trial adds to the mounting tension over North Korea's planned rocket launch in the next few days, which it says is to send a communications satellite into space but which the United States and others say is to test a long-range missile that could carry a warhead as far as U.S. territory.

The two women reporters, Laura Ling and Euna Lee from the U.S.-based media outlet Current TV, were arrested two weeks ago by the Tumen River, which runs along the east side of the border between North Korea and China.

Click here to continue reading.

Researchers at the University of Toronto have uncovered a China-based electronic spying operation that infiltrated computers in 103 countries. While the Canadians say they have no conclusive evidence of Chinese government involvement, the targets of the computer espionage were political.

The cyber spying operation was one of the biggest and most sophisticated ever discovered. The researchers call it Ghostnet--an electronic spying operation that infiltrated more than 1,000 computers around the world. The operation allegedly targeted NATO, the Indian Embassy in Washington and Tibetan exile centers in India, Brussels and London.

In addition to stealing computer files, the cyber spies could turn on the internal camera on a remote computer to eavesdrop on live conversations.

One expert says that while the operation was sophisticated in its organization and scope, it used readily available Internet viruses called Trojans, attached to email messages to infiltrate computers.

The Toronto researchers uncovered the cyber spying when they were asked by the exiled Tibetan leader, the Dalia Lama, to examine his organization's computers for malware--malicious software that can infiltrate or damage a computer system. They found infected computers in the Dalai Lama's organization and were able to trace stolen correspondence back to the spy network's computer servers in China.

The Chinese government has denied any involvement in the operation.

Fearing the possibility of a shooting war with nuclear-armed North Korea, the Obama administration has decided to make every effort possible to appease the Stalinist/Kimist state. Hence, Washington's rush to publicly assure Pyongyang that the United States has no plans to shoot down the regime's long-range rocket--a Taepodong-2 intercontinental ballistic missile capable of reaching Alaska and Hawaii--unless it approaches U.S. territory.

Hence, too, the appointment of a part-time envoy to manage, or contain, the Korean crisis. Click here for the story.

In this case, containment is code for appeasement. The Obama administration does not believe that a solution to the North Korean nuclear nightmare is attainable, barring a miraculous development, such as a Chinese-sponsored military coup in the North. The most practical approach, according to the administration, is to try to manage or contain the problem with an array of concessions and bribes (short of sacrificing South Korea or Japan).

The fact that appeasement has failed to prevent North Korea from developing nuclear arms and long-range rockets--and exporting these technologies--does seem to matter all that much to the U.S. In Obama's Washington, appeasement is the order of the day; and apologizing for alleged American sins, from providing guns and markets for Mexican drug cartels to carbon emissions, is all the rage. The administration is bent on deescalating the wars in Iraq and Afghanistan--the minimal troop surge there is a cover for a Vietnamization-style policy aimed at facilitating an eventual withdrawal--demilitarizing the titanic struggle with radical Islam, and narrowly redefining the conflict to combating Al Qaeda, the only Islamist enemy that for the foreseeable future is likely to remain outside the zone of acceptable diplomatic engagement.

Seven-and-a-half years after the worst-ever attacks on American soil--by Islamist terrorists--the Bush administration's misnamed War on Terror is basically a lost cause. Islamists have been emboldened and encouraged everywhere, even in Europe and the United States; America's strategic ally, Israel, is on a countdown to conflict with North Korea's partner in nuclear crime, Islamist Iran; and American coastal cities and other targets are potential targets for nuclear, biological, and chemical attacks--and swarming raids--by Islamist terrorist organizations.

Overwhelmed by the financial crisis, the Obama administration is bent on appeasing Iran, resigned to living with the monstrous mullahocracy, even in the face of its menacing nuclear and missile programs. The administration is also resigned to coexisting with a rising Islamist tide, hoping to find ways of engaging and reconciling with so-called moderate Islamists (a concept akin to negotiating with moderate Nazis), including relatively reform-minded members of the Iranian political establishment and supposedly more compliant elements of Afghanistan's resurgent, medieval Taliban. Regime change in Iran is out of the question, as is defeating the Taliban.


- Andre Pachter


EDITOR'S NOTE: The Obama administration is also concerned about developments in Saudi Arabia, where interior minister Prince Nayef has been promoted to second deputy prime minister, a position that makes him a potential successor to the throne in place of the incumbent Crown Prince defense minister, Prince Sultan, who is dying of colon cancer. The 76-year-old Nayef is both militantly anti-Israel--which he views as the leading source of instability in the Middle East--and anti-Iran, which he sees as the fountainhead of Shiite radicalism and insurrection threatening Saudi Arabia and other Persian Gulf countries. Nayef, who has been the Saudi Kingdom's main man for fighting and also covertly dealing with Al Qaeda and associated groups in the Saudi religious establishment, is likely to compete with Iran for influence over Hamas, the Palestinian terrorist organization that is committed to Israel's destruction.

The Obama administration understands this, seeing it as further proof that Islamism is not a monolith, and thus a viable target for diplomatic initiatives of one kind or another. The administration also hopes that a Saudi Arabia with more credibility among Islamists will be able to play a constructive role in influencing the Taliban and containing Pakistan--a nuclear power in danger to falling to the Inter Services Intelligence agency and other pro-Islamist forces. Click here for a report on the ISI's support for Al Qaeda and the Taliban.

The White House said Saturday that President Barack Obama intends to discuss the pending North Korean missile launch with Chinese President Hu Jintao at the G20 summit in London that starts this Thursday.

The announcement, loaded with irony and meaning, cries out for commentary. On the one hand, the United States needs to talk to China about its nuclear-armed, rogue vassal. On the other hand, the U.S. has to be careful when talking about China. Its ancient symbol may be the dragon; but in U.S. eyes, in terms of dealing with North Korea, China is the elephant in the situation room--a great power on which North Korea and the U.S. both depend. The Stalinist/Kimist state would collapse without Chinese support; and so would the U.S. financial system. China is North Korea's most important ally--and America's most important banker. North Korea needs China for political backing, food, fuel, and arms. Washington needs China to bail the U.S. out of the worst economic crisis since the 1930s.

A bizarre game. Beijing is committed to maintaining North Korea (a) as a buffer between China and the U.S. and its ally, South Korea, and (b) as a potential pressure point to deter the U.S. from coming to Taiwan's aid should China try to take the self-ruled island back by force. But Beijing is also committed to keeping the U.S. financially afloat. In other words, China is in too deep with its ally and its adversary to allow either of them to go down. Chaos in North Korea could spill dangerously over into China; a crash of the (effectively insolvent) U.S. financial system would wipe out China's enormous investment in U.S. debt.

Notice the word adversary in the above paragraph. Unlike the U.S. State Department, which has foolishly relied on China to moderate North Korean behavior since its 2006 nuclear test, this reporter has no illusions about China's intentions. It has consistently disappointed Washington with respect to North Korea, and will continue to disappoint.

That said, the time may be ripe for a radical change in China's traditionally close, lips-and-teeth relationship with North Korea. China could at some stage opt for oral surgery--meaning, extraction and replacement of a hopelessly diseased tooth. A Chinese-sponsored coup--the so-called Chinese Solution to the North Korean problem--is possible. It may even be probable if the coming Korean crisis threatens to spin out of control.

A new Korean war, which is also possible, is not in China's interest.


- Andre Pachter

It seems that China Confidential scooped the world.

On Friday, we said:

China Confidential analysts say North Korea has probably invited a delegation of Iranian VIPs, including military and intelligence officers, scientists and technicians, to observe its upcoming, long-range rocket launch.

The Times reports:

Missile experts from Iran are in North Korea to help Pyongyang prepare for its rocket launch, according to reports.

Amid increasing global concern over the rocket launch, believed by the US and its allies to be an illegal missile launch, Japan's Sankei Shimbun newspaper claimed today a 15-strong delegation from Tehran has been in the country advising the North Koreans since the beginning of March.

The Iranian experts include senior officials with Iranian rocket and satellite producer Shahid Hemmat Industrial Group, the daily said.

The Iranians brought a letter from Iran President Mahmoud Ahmadinejad to North Korean leader Kim Jong-Il stressing the importance of cooperating on space technology, it added.

Continue here.

Scroll down to read the China Confidential report, "Will Iranians Observe North Korean Missile Test?"

China Confidential again reported yesterday that counterinsurgency experts say the planned U.S. troop escalation in Afghanistan will be insufficient to make a meaningful impact on the outcome of the conflict there, which Washington and its ally, the corrupt Karazai government, is in serious danger of losing. Scroll for the story, headlined, "Lost War, Flawed Strategy, Doomed Diplomacy."

An article in today's edition of The New York Times provides fresh confirmation of the criticism. Correspondents Helene Cooper and Eric Schmitt report:

The commanders in the field wanted a firmer and long-term commitment of more combat troops beyond the 17,000 that Mr. Obama had already promised to send, and a pledge that billions of dollars would be found to significantly expand the number of Afghan security forces.

Defense Secretary Robert M. Gates and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, pressed for an additional 4,000 troops to be sent to Afghanistan — but only to serve as trainers. They tempered the commanders’ request and agreed to put off any decision to order more combat troops to Afghanistan until the end of this year, when the strategy’s progress could be assessed.

Japan's Kyodo news agency reported today that the United States, South Korea, and Japan, in agreement that North Korea's planned, long-range rocket launch would violate a United Nations Security Council resolution, intend to bring the issue before the Security Council if the North goes ahead with the launch.

Resolution 1718 bans North Korea from engaging in ballistic missile activities. The resolution was adopted unanimously by the Security Council on October 14, 2006, five days after North Korea's nuclear test.

The missile that North Korea plans to launch, a Taepodong-2 capable of reaching Alaska and Hawaii, is expected to overfly Japan, which has ordered its defense forces to intercept any falling debris from the projectile.

North Korea has threatened to retaliate with "strong steps" if the Security Council addresses the launch, the purpose of which, North Korea insists, is to send a satellite into space.

China Confidential analysts say the North's retaliatory measures are likely to include: scrapping stalled, six-nation nuclear negotiations; restarting plutonium production; and, also, possibly, staging a limited military action against South Korea and a new nuclear weapon test.

North Korea is also likely to use two detained American journalists as hostages. The reporters, Laura Ling and Euna Lee, were recently taken into custody on the Chinese-North Korean border while reporting on the fate of North Korean refugees.

Jane's Defense Weekly said Friday that satellite imagery shows North Korea is nearing the final phases of the rocket launch, and that recent activity at the launch site suggests the mission is on or even ahead of schedule.

China Confidential analysts say North Korea has probably invited a delegation of Iranian VIPs, including military and intelligence officers, scientists and technicians, to observe its upcoming, long-range rocket launch.

The Stalinist and Islamist states have been collaborating on ballistic missile development for about 25 years. With money and equipment provided by Iran, North Korea has developed missiles and exported missile-related technologies to Pakistan. The rocket that Iran used to launch its first satellite on February 2 was based on North Korean missile technology.

North Koreans were on hand for Iranian test-firings of ship-to-shore missiles, which proved the practicality of using cargo ships to attack coastal cities, military bases, and other land-based targets.

First, it was Alaska; now, it's Hawaii. Will California be next?

As if to confirm our assertions concerning the seriousness of the North Korean missile menace, America's top military officer, Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, said on Friday that a Taepodong-2 has a range that could possibly hit Hawaii.

Asked if the rocket Pyongyang plans to launch could reach the U.S. states of Hawaii or Alaska, Mullen told CNN: "In some cases, yes, they could probably get down to Hawaii."

Click here for the story.

America's Afghan war is lost. Counterinsurgency experts tell China Confidential that a minimum of 30,000 additional troops will be needed to prevent a Taliban takeover; but even that level of escalation is almost certain to fail absent destruction of the cross-border Islamist sanctuaries in Pakistan's neighboring, lawless, tribal areas.

President Barack Obama said today that he plans to send approximately 4,000 more U.S. troops to Afghanistan and step up diplomacy with Pakistan. The estimated 4,000 new troops will join 17,000 additional combat and support troops the President wants to deploy in Afghanistan in the coming months. By October, the overall force level is supposed to reach 59,000.

The plan recalls another failed American strategy--Vietnamization--in that it shifts the emphasis of the U.S. mission to training and increasing the size of the Afghan security forces in order for them to eventually take responsibility for their country's security. Vietnamization was the name for Washington's plan to gradually withdraw its forces from South Vietnam by letting the country stand on its own. Instead, it left South Vietnam standing alone, vulnerable to conquest by the North.

The U.S. talked about nation building in Vietnam; and there is nation building, too, in Obama's plan. He is asking the U.S. Congress to authorize $1.5 billion in spending for building schools, roads and hospitals in Pakistan, and legislation to develop the economy along the border, in addition to other diplomatic initiatives. Diplomacy in this regard is code for appeasement--reconciliation with a supposed silent majority of allegedly moderate Taliban.


Appeasement of Iran

The administration's appeasement policy extends to Iran. The Obama administration sees the nuclear-arming Islamist nation as the key to regional stability--meaning, sufficient calm to allow for an orderly U.S. exit. More specifically, the administration hopes that so-called reformers will come to power in Iran, keep a lid on the Taliban and other Islamists--and stop short of actually producing nuclear weapons--in exchange for a U.S. pledge of non-interference in Iranian internal affairs.

Incredibly, there are important individuals in the Obama administration who are prepared to support formal security guarantees for the mullahs. Some of these U.S. officials and advisers are receptive to assuring the monstrous regime's security even if it develops nuclear weapons and declares itself a nuclear power (although an actual nuclear test is still unacceptable).

The administration's ultra-appeasement faction follows a line articulated during the 2008 Presidential campaign by Zbigniew Brzezinski, who served as National Security Advisor to President Jimmy Carter when he was in office. The Polish-born political scientist, who played a crucial role in persuading Carter to betray Iran's pro-U.S. modernizing monarch, Shah Mohammed Reza Pahlavi, in a failed attempt to hop aboard the Islamist bandwagon, argues that the U.S. can both "live with" and never "accept" (meaning never officially approve of) a nuclear-armed Iran, drawing an analogy to relations between the two nuclear-armed superpowers during the Cold War.

Which is utter nonsense. Brzezinski conveniently ignores Iran's determination to destroy Israel and drive the U.S. out of the Middle East, and the fact that even in the case of the long competition between the U.S. and the U.S.S.R., the two nations came close to a nuclear war during the Cuban Missile Crisis.

U.S. diplomacy with Iran is doomed. Instead of preventing war, which is diplomacy's highest purpose, the administration's appeasement policy will make war--on Iranian terms--inevitable.

The Washington Post has confirmed what China Confidential reported yesterday and earlier this morning: nuclear-armed North Korea could be planning another atomic test. Scroll down for the China Confidential stories; search our archives for related reports and analyses. Click here to read the Washington Post story.

This is the second time this week that the paper has confirmed a China Confidential story about North Korea. Scroll for the hostage stories.

For the record: on Thursday, October 5, 2006, China Confidential said:

China Confidential continues to believe that a North Korean nuclear bomb test could occur on or around October 9. There are signs of suspicious activity at possible test sites; and Dear Leader Kim Jong-il, as we have previously noted, would like to upstage the United Nations Security Council when it meets next Monday to formally endorse South Korean Foreign Minister Ban Ki-Moon as its choice to become the next UN secretary general.

North Korea detonated its nuclear device on Monday, October 9, 2006.

Less than a half-day after China Confidential reported that North Korea intends to break off the stalled, six-way nuclear disarmament talks, and could eventually explode another nuclear device to demonstrate its power to the world, the Stalinist/Kimist state threatened to restart the North Korean nuclear plant that makes weapons-grade plutonium. Click here for the story. Scroll for the China Confidential report.

Countdown to crisis.

Japan's Defense Minister Yasukazu Hamada gave security forces the green light Friday to shoot down any North Korean missile that enters Japanese territory.

“We will take every effort to protect the safety of Japanese people,” Hamada told reporters in Tokyo.

Japanese intelligence sources say the North Korean missile launch is imminent. Scroll down to read the reports.

This should unite humanity.

New Scientist urges the United States, China, and Europe to heed the threat of solar storms. Truly chilling must-reading. Click here, here, and here.

China is escalating its war of words with Washington over Pentagon criticism of its opaque military buildup. Reuters reports from Beijing:

The United States' latest report on China's growing military power throws new obstacles in the way of restoring defense ties between the two powers, a Chinese spokesman said in the latest broadside at Washington.

Beijing has already voiced its unhappiness with the U.S. Defense Department's annual report on Chinese military capabilities, released this week.

But now Hu Changming, spokesman for the Chinese Ministry of Defense, has said his government's anger over the report could have real implications for plans to improve military contacts, which took a dive last year over U.S. arms sales to Taiwan.

Click here to continue.


Qin's Blunt Criticism

On Thursday, Chinese Foreign Ministry spokesman Qin Gang was blunt in expressing his government's resolute opposition to the U.S. government report.

Qin said the report issued by the U.S. side continues to play up "the fallacy of China's so-called military threat." He called the Pentagon report a "gross distortion of facts and interference in China's internal affairs."

Speaking to reporters in Beijing, Qin did not specifically address the issue of transparency; instead, he said his country has no plans to retaliate with a report on the U.S. military.

China Confidential analysts say the Communist Party leadership was particularly angered by the fact that the Pentagon report raised the issue of China's continued build-up of missiles opposite Taiwan, which Beijing regards as a renegade province.

Qin told reporters that Taiwan remains the most sensitive issue in Sino-American relations. He urged the United States to oppose Taiwan independence and take concrete actions to support the peaceful development of cross-Straits ties.

Qin called on the U.S. to "drop Cold War mentality and bias, stop issuing the so-called report on China's military power and stop making groundless accusations against China, so as not to further damage the two countries' military relations."


EDITOR'S NOTE: The Chinese military is obsessed with Taiwan, as China Confidential reported in 2007. Absent an agreement to peacefully reunify, a major cross-Strait crisis is a distinct possibility before the end of next year.

The rocket is ready.

China Confidential sources in Japan and South Korea say the North could launch its intercontinental ballistic missile--a Taepodong-2 capable of hitting Alaska--this Friday or Saturday in order to dominate weekend news coverage across the world.

The South Korean military is on high alert; and Japan is ready to shoot the rocket down.

South Korea's Defense Ministry officials told reporters Thursday that North Korea has apparently stood a rocket up on a launch pad, making its liftoff imminent.

Ministry spokesman Won Tae-jae urged the North to stop the missile launch, calling it a clear violation of a United Nations Resolution.

Intelligence officials say satellite photos show an object believed to be a long-range rocket standing up at an advanced North Korean facility in the country's northeast.

North Korea has vowed to fire the rocket, claiming it will carry a communications satellite, between April 4 and April 8.

The North has also threatened to end stalled, six-party nuclear negotiations if it is brought before the U.N. because of the launch.

China Confidential analysts say the North is looking for a pretext to withdraw from the talks. The regime intends to keep its nuclear weapons. It could even explode another nuclear device to remind the world of its destructive power.

As for the long-range rocket, given that Pyongyang shows no sign of backing down, the best outcome for the U.S. and Japan would be a North Korean flop or fizzle--self-destruction of the menacing missile on its launch pad or soon after liftoff.

POSTSCRIPT: North Korea is developing an even more menacing ICBM than the Taepodong-2--an advanced Taepodong-2 with a potential range of approximately 5,000 miles (8,000 kilometers). It would put the U.S. West coast, Hawaii, Australia and eastern Europe within striking distance of the world's worst dictatorship, which is cooperating closely with nuclear-arming, Islamist Iran. Bipartisan attempts to appease and accommodate both nations have failed and appear to have made war inevitable--on enemy terms.

Forbes' Alex Davidson reports:

The schoolyard fight between China and the United States that initially focused on the dollar's future escalated Thursday, as China said America should do some soul-searching before it tries to fix the economic crisis.

In a 5,000-character report by the research arm of the People's Bank of China, authorities said financial regulators, specifically in Washington, are not doing enough and hold "wrong ideas," such as that the least regulation is the best regulation. The report said financial regulators in developed economies "excessively believe in the role of markets."

Continue here.


On the soul-searching front, the Obama administration on Thursday announced plans to impose greater regulation and oversight on financial markets in order to reduce systemic risk and avoid a repeat of the current financial meltdown. The plan, which includes a proposal to create a new regulating authority to monitor risk in the financial system, has been long in preparation and the subject of discussions between lawmakers and the administration.

Treasury Secretary Timothy Geithner told the House Financial Services Committee that there clearly is a need for tougher regulation in a complex and flawed financial system.

"Comprehensive reform, not modest repairs at the margin, but new rules of the game. And the new rules must be simpler and more effectively enforced," he said. "They must produce a more stable system, one that protects consumers and investors, rewards innovation and is able to adapt and evolve with changes in the structure of our financial system."


Against the Shadow Banking System

The administration's plan would extend federal government supervision to the the shadow banking system that is blamed for the meltdown--hedge funds and other investment houses that package and peddle risky and exotic investments. The new rules would require the firms to register with the U.S. Securities and Exchange Commission if their assets exceed a yet to be determined size. Similar rules are already in place to regulate banks.

Also proposed: greater control and oversight over complicated financial transactions like credit default swaps, which played a major role in the collapse of companies such as American International Group (AIG). Credit default swaps were essentially unregulated insurance policies; anyone could write them for any sort of transaction.


China Confidential analysts say a new era of re-regulation, regulation--and nationalization--is dawning in the U.S. as the federal government becomes the main engine of the economy. The wild years of anything-goes, casino capitalism are over.

Kuwait is deeply concerned that its oil refining project in China could be killed by endless regulatory problems.

Kuwait Petroleum Corporation and Sinopec formed a joint venture on 2005 to build a refinery in Guangdong province. But the $9 billion project has to overcome environmental issues and increasing resistance by the central government.

Kuwait's crude oil exports to China fell in February to only one-third the 190,000 barrels per day peak reached in August and September 2008, and it may fail to reach a targetted 500,000 barrels per day without the planned refinery, which has been designed to process 300,000 barrels per day of oil. The facility would include a petrochemical plant for production of ethylene, PVC, and other products for the local market.

Chinese environmentalists oppose the project site because it is close to state protected wetlands and the densely populated and already polluted Pearl River Delta region, including Hong Kong and Macao. An outpouring of concern from Hong Kong's government and Guangdong delegates to China's parliament have added to the controversy.

North Korea has said it intends to launch a satellite--cover story for a long-range rocket test--between April 4 and 8.

On March 18, China Confidential warned the launch could occur a few days before or after the announced timeframe. North Korea has a tendency to surprise its adversaries.

In fact, the North could fire the missile within days. The South Korean daily Chosun Ilbo today quoted a diplomatic source as saying the North could technically fire the Taepodong-2 rocket--which is capable of reaching Alaska--by the weekend.

The Israel Air Force successfully attacked a 17-truck arms smuggling convoy bound for Gaza in January as it passed through Sudan. Sudan has confirmed the attack.

There was more to the mission than meets the eye. Israel practiced what the Chinese call killing the chicken to scare the monkey. The strike, which reportedly killed nine people, was also intended to send a message to nuclear-arming Iran: Israel has the capability and the courage to attack its enemies in dramatic and unusual ways.

Although U.S. Secretary of State Hillary Clinton has warned North Korea that launching a long-range rocket capable of reaching Alaska will be considered a "provocative act," the Obama administration is actually working overtime to disinform the public by letting journalists know--on a background basis--that even if the test is successful, it will not be all that significant.

The administration line is that Pyongyang lacks the technology (a) to reliably and accurately hit U.S. territory, and (b) to miniaturize nuclear weapons into warheads for placement atop missiles.

All of which may not be true. China Confidential analysts say North Korea's Taepodong-2 missile poses a serious potential threat to U.S. national security. Moreover, the North has been making major advances in warhead technology--and may be sharing the knowhow with Iran.

The nuclear tag team partners have been cooperating closely in the defense sphere. For example, North Korean observers were present, as we have previously reported, for a test-firing of a missile from an Iranian cargo ship.

Use of concealed, containerized, missile launch pads to attack U.S. coastal cities with nuclear weapons--or to detonate a nuclear weapon over U.S. territory in order to wipe out all communications networks and electronic systems and devices--is a major threat against which there is no known defense.

The head of European aerospace giant Arianespace on Wednesday expressed "shock" that a Chinese competitor has been chosen by Eutelsat Communications to launch a satellite into space.

The choice of China "leaves us extremely perplexed," said Jean-Yves Le Gall, CEO of French rocket launch company Arianespace, speaking to China Confidential on the margins of the annual Satellite trade show and conference in Washington.

Earlier this month China inked the deal with Eutelsat to launch the company's W3B satellite -- much to the chagrin of detractors like Le Gall, who fear the agreement will anger the United States.

Le Gall noted the United States put in place its International Traffic in Arms Regulation (ITAR) rules to restrict export and import of defense-related articles and services that it produces.

Even though the Eutelsat satellite in question contains no American-made parts, Le Gall said it does contain equally sensitive European-made components, which flouts the spirit of the ITAR rule.

"Various governments -- most notably the United States -- have good reasons for wishing that there not be a technology transfer to China," he told AFP.

Le Gall added that in his view, Eutelsat's decision to let China launch its satellite could be interpreted as being "hostile to the United States."

"We are shocked that it (the decision) has been put in place," he said.

Dateline USA....

April is Autism Awareness Month, and there are newsworthy developments, reminding this reporter that despite the nation's economic ills, innovation is alive and well in the United States.

A New York-based drug research and development company, Curemark, which is focused on the treatment of neurological diseases, announced today that the U.S. Food and Drug Administration (FDA) has cleared the company's Investigational New Drug (IND) application to initiate its pivotal Phase III clinical trial of CM-AT for the treatment of autism.

The company expects to begin Phase III clinical trials at multiple sites across the U.S. in the second quarter of 2009. As part of this IND, the FDA has agreed that Curemark may proceed directly into Phase III clinical trials in patients with autism.

The FDA has reviewed the quality, safety and efficacy data generated by Curemark in pediatric patients with autism. In addition, the FDA has provided written guidance on the trial protocol.

CM-AT is based upon the observation that many children with autism do not digest protein. The drug is a proprietary therapy formulated to be released in the small intestine of children with autism.

Designed as an easily utilized powder taken three times a day, CM-AT was developed with the children in the forefront. The administration of the drug with meals allows for an increase in protein digestion thus potentially reducing allergy and increasing the availability of essential amino acids.

With proper protein digestion in a subset of children with autism, the need for protein restricted diets, such as gluten-free and casein-free diets, to which many children with autism have become accustomed, may no longer be necessary. Being able to digest protein rather than avoid it will allow children with autism greater access to the building blocks for the manufacture of new proteins such as neurotransmitters. A partial or complete lack of protein digestion could further lead to other gastrointestinal and digestive dysfunctions.

Autism is the fastest-growing developmental disability in the U.S., affecting 1 in 150 children. Every 20 minutes, a child is diagnosed with an autism spectrum disorder. The disease is more common than juvenile diabetes, childhood cancer and AIDS combined.

In related news, the National Institutes of Health (NIH) will commit roughly $60 million from American Recovery and Reinvestment Act (ARRA) to support autism research and meet objectives set forth earlier this year by a federal advisory committee. The Request for Applications is the largest funding opportunity for research on autism spectrum disorders to date; combined with other ARRA initiatives, the move represents a surge in NIH's commitment to finding the causes and treatments for autism.

North Korea has placed a Taepodong-2 missile on a launch pad in preparation for firing it in defiance of the international community.

North Korea says it intends to launch a satellite over Japan and into orbit between April 4 and April 8.

The satellite story is phony, of course, cover for testing a missile that is designed to carry a nuclear warhead--and capable of reaching Alaska.

China Confidential will be four years old on April 10. Since its inception, it has focused on China's opaque and ominous military buildup, questioning why a supposedly peacefully rising power would need a blue water navy, space weapons, etc. Who threatens China? we asked over and again.

Reuters reported today that the Pentagon is also questioning the purpose of China's military modernization and expansion--and lack of transparency in military matters. Click here for the Reuters story, and here for the Pentagon report on which it is based.

On Monday, China Confidential reported that the Obama administration is receptive to China's call for the creation of a new international reserve currency--an end to dollar dominance. Scroll for the story ("The Death of the Dollar?").

This morning, Treasury Secretary Timothy Geithner said China’s suggestion “deserves some consideration."

The dollar plunged in trading but rebounded after Geithner affirmed its importance in remarks before the Council on Foreign Relations. Click here for the TImes' story.

POSTSCRIPT: China Confidential has learned that billionaire investor George Soros was involved in arranging for Geithner to address the CFR.

China Confidential reported Monday that North Korea intends to use two captured American journalists as hostages in order to deter the United States and Japan from interfering with Pyongyang's planned rocket launch. The Washington Post today published an article that supports the China Confidential analysis, citing sources that describe the detained U.S. citizens as "bargaining chips."

Click here for the story. Scroll for the China Confidential piece.


The Obama administration and accommodating media outlets are likely to avoid using the hostage term, even though the definition of a hostage is a person held against his or her will--a prisoner--by one party in order to ensure that another party meets specified demands or behaves in a certain manner.

EDITOR'S NOTE: Regarding the hostage affair, American advocates of appeasing nuclear-armed North Korea and its nuclear-arming ally, Iran, have begun a blame-the-victim whispering campaign in Washington, DC and New York that recalls a knee-jerk liberal response to urban crime during the 1960s and '70s. What was she doing walking in that neighborhood? was commonly heard on Manhattan's Upper West Side and in other liberal bastions following an all-too commonplace report of a rape, mugging, or beating. It is only a matter of time--days, maybe--before North Korea's apologists will mobilize to downplay both the hostage-taking by the regime and its menacing missile launch. A similar campaign will soon be used to make an American ally, Israel, which Iran has vowed to destroy, seem like a lost cause unworthy of further U.S. backing because the Jewish state is stuck in the wrong neighborhood. But that is another story.

China says a video that purportedly shows its security personnel violently beating Tibetans last year is "a lie."

The video, which appears below, was released by the Tibetan government-in-exile and posted on the video-sharing site YouTube. China has blocked Internet access to YouTube.

Amnon Meranda reports from Jerusalem:

Director of Military Intelligence Major-General Amos Yadlin spoke before the Knesset's Foreign Affairs and Defense Committee on Wednesday and warned yet again against Iran's nuclear ambitions.

Iran is biding its time on manufacturing a nuclear weapon for diplomatic reasons, he said, adding that Israel could still prevent the Islamic republic from gaining atomic capabilities.

"It all boils down to fissionable matter," he explained. "The Iranians have finished developing surface-to-surface missile which can carry a nuclear warhead and Tehran has mastered uranium enrichment technologies and can pursue nuclear military capabilities, but ultimately it is a decision the Iranian regime has to make.

Continue here.

Li Yanping reports:

China’s call for the creation of a new international reserve currency may signal its concern at the dollar’s weakness and ambitions for a leadership role at next week’s Group of 20 summit, economists said.

Central bank Governor Zhou Xiaochuan this week urged the International Monetary Fund to create a “super-sovereign reserve currency.” The dollar weakened after the Federal Reserve said it would buy Treasuries and the U.S. government outlined plans to buy illiquid bank assets

Click here to continue.

Agreement Unites Opposing Israeli Parties Ahead of Conflict with Iran


JTA reports that Israel's Labor Party voted to join the Likud-led coalition government, virtually guaranteeing that Benjamin Netanyahu will be Israel's next prime minister.

Labor chief Ehud Barak's bid to join Netanyahu's coalition came down to a contentious vote Tuesday night by the party's central committee, with 680 in favor of joining and 570 against.

With Labor behind him, Netanyahu now has the 60-plus Knesset majority necessary to form a government and become prime minister. His other coalition partners include the Yisrael Beiteinu and Shas parties.

Barak argued that Labor joining the Likud-led coalition was best for the country and would not provide cover for a right-wing agenda.

"I am not afraid of Benjamin Netanyahu. We won't be anyone's fig leaf or anyone's third wheel," Barak told the central committee. "We will act as an opposing force that will ensure there will not be a narrow right-wing government, but a real government that looks after the State of Israel."

Audience members who disagreed booed Barak.

"We would be entering this government as a third wheel, as a wagging tail, not more than that," Knesset member Shelly Yachimovich said before the vote. "There is no shame in sitting in the opposition. On the contrary, it's an honor."

Earlier in the day, Barak and Netanyahu came together on a draft agreement stipulating that in exchange for Labor's joining the coalition, the Israeli government would commit toward working for achieve regional peace, affirm its commitment to all agreements signed by previous Israeli governments, allow Barak to continue on as defense minister and be a full partner in the diplomatic process, and enforce the law on illegal outposts, according to media reports.

China Confidential sources in Israel say the Likud-Labor agreement signals (a) that Israel's political leadership expects that the nation will soon be engaged in a shooting war with Iran over its nuclear program, and (b) that Israel also expects to be squeezed and pressured by its longtime ally, the United States. Contrary to public pronouncements, Israeli leaders know the Obama administration is tilting toward Israel's enemies.

North Korea has warned the international community against interfering with Pyongyang's plans to launch a supposed communications satellite into space next month.

In a statement Tuesday, the North's Foreign Ministry warned the United Nations to not use sanctions against it. The ministry said that such actions would violate the spirit of a disarmament-for-aid pact Pyongyang signed with five other countries in 2007.

The North also reasserted what it says is its right to the peaceful development of its space program.

North Korea announced Saturday that it will close two aviation routes through its air space from April 4 through April 8, during the time it plans to launch its rocket into space.

The United States, Japan and South Korea say Pyongyang intends to use the launch as a test of its long-range ballistic missile capability.

North Korea's comments come as South Korea's top nuclear negotiator arrived in China for talks Tuesday. Wi Sung-lac is scheduled to meet with Chinese Vice Foreign Minister Wu Dawei on Tuesday and Wednesday. After that he heads to Washington for more talks.

Before arriving in Beijing, Wi told Seoul's Yonhap news agency his main focus in Beijing would be discussing measures to take before and after North Korea fires a missile.

Japan and South Korea have warned North Korea it will face a strong international response if it goes ahead with the launch.

They have said the launch would violate a U.N. Security Council resolution imposed in 2006 after North Korea tested long-range missiles and a nuclear weapon.

Top U.S. military commanders told members of Congress last week the American military is probably capable of shooting down a North Korean missile if it threatens U.S. territory.

Dateline USA....


A modest line of questioning.

Is an Obama double sitting in the White House? Was the real Barack Obama abducted by aliens from outer space or a foreign intelligence agency--and replaced with a look-alike?

One wonders because the President's performance has been so different and ... disappointing ... since inauguration day. The uninspiring inaugural speech .. the poor personnel picks ... the tasteless joke on the Jay Leno show ... the awkward laughter on 60 Minutes ... the video appeal to Iran ... the AIG scandal ... the confusion and the faltering ... the complexity and the fumbling ... the failure to stay ahead of the populist wave ... all of it contrasts so dramatically with the brilliant, flawless campaign of The Candidate of Change, the man whom the mainstream media anointed to lead the nation out of its awful predicament.

Are we all victims of a sinister plot--the stuff of science fiction and political fantasy? On some strange level, it would be comforting to think so. The idea of a grand conspiracy is more appealing than the suspicion that a battered, beat-down electorate may have been bamboozled into embracing a slick salesman of hope who, having parlayed a paper-thin resume into winning the White House, suddenly finds himself hopelessly overwhelmed and out of his depth.

AFP reports:

Police have launched a door-to-door search for a man who shot dead a teenage soldier on duty outside army barracks in southwest China, state media reported Tuesday.

Han Junliang, 18, was shot twice in the chest Thursday in the city of Chongqing, and police have announced a 300,000-yuan (44,000-dollar) reward for anyone able to help arrest the suspect, the China Daily said.

The newspaper, quoting an unnamed police source, said that preliminary investigations suggested the killer might be Tibetan.

Continue here.

As if to confirm that the fix is in, the exiled leader of Hamas (formally designated a Foreign Terrorist Organization by the U.S. State Department), has praised Presdent Obama's "new language" for dealing with the Middle East.

Khaled Meshaal made the comment in an interview with Italian newspaper La Repubblica published Sunday.

He was responding to the Obama administration's recent calls for dialogue with Iran and Syria to try to resolve long-running disputes and improve relations.

Meshaal said the challenge for the U.S. and European Union is to make Obama's appeals a "prelude" to sincere policy changes.

The Palestinian terrorist leader predicted that an official U.S. and European overture to Hamas is "only a matter of time."

He's right about that. The Obama administration is tilting toward Hamas and its state sponsor, Iran.

EDITOR'S NOTE: The official overture, when it comes, will be the culmination of efforts by former President Jimmy Carter and his former National Security Advisor, Zbigniew Brzezinski, to influence the U.S. into abandoning Israel and appeasing Islamist Iran and Islamism in general. The two Democrats, who backed Obama, collaborated during the 2008 Presidential campaign. Brzezinski commented publicly, including testifying before the U.S. Senate Foreign Relations Committee, and Carter met with Meshaal in Damascus.

It is important to recall that Brzezinski was the author of the Carter administration's covert, anti-Soviet intervention in Afghanistan in support of Islamist warlords (an operation that the Reagan administration escalated), and that the administration, thanks to his influence over Carter, betrayed the Shah of Iran, a long-time U.S. ally and modernizing monarch, in order to jump aboard the Islamist bandwagon. The craven attempt to appease Islamism failed miserably. Intervention in Afghanistan led to Al Qeada and the global jihad, and the betrayal of the Shah led to the rise of an implacable enemy of the U.S. and Israel--nuclear-arming Iran.

China's central banker is calling for an end to U.S. dollar dominance and the creation of a "super-sovereign reserve currency."

Click here to read his essay.


China Confidential has learned that the Obama administration is receptive to the idea.

China Confidential has learned that nuclear-armed North Korea is holding two detained American journalists as hostages in order to deter Washington from shooting down the menacing long-range rocket that North Korea intends to launch early next month.

Euna Lee and Laura Ling were kidnapped--captured while filming from Chinese territory--by North Korean soldiers. The two American citizens are being held in the North Korean capital, Pyongyang, and are being interrogated by officers of the North's National Security Agency and the Defense Security Command of the Korean People’s Army.

China is fully aware of the situation ... and essentially complicit in the crime, considering that North Korea is a Chinese vassal.

The Obama administration is afraid of challenging China and eager to appease North Korea, fearing that its long-range rocket, a Taepodong-2, will hit or come close to hitting the Western United States.

The last thing the administration needs now is an international crisis. North Korea knows this and intends to exploit U.S. weakness and vulnerability to the hilt.

Not surprisingly, North Korea's nuclear-arming ally, Islamist Iran, is monitoring developments with intense interest.

Tim Johnson reports that rising China is waltzing "gingerly with the Russian bear."

The receding economic tide is part of a larger cycle in Sino-Russian relations, which have vacillated from friendship to acrimony and back to friendship over the past half-century. Now the two nations are at a high point, enjoying a strategic partnership that's brought them closer than at any time in decades, but that's being tested by Russia's resentment at China's growing economic and military strength.

Click here to read Tim's article.

A striking look at the harsh realities....

AFP reports:

China hit out at trade protectionism on Monday, a day after stressing its veto of Coca-Cola's bid for a local company does not mean it is hostile to foreign investment.

Vice Finance Minister Li Yong called on the Group of 20 (G20) major economies to reject protectionism at next week's meeting in London, saying it could set back recovery from the economic slowdown.

"Protectionism will seriously dampen the momentum of economic recovery," Li told reporters.

"We call on the G20 to send a signal of opposing trade protectionism."

Continue here.

Countdown to crisis....

South Korean intelligence sources predict North Korea will fire its menacing Taepodong-2 rocket--capable of hitting Alaska--on April 4 or 5.

South Korean and Japanese analysts confirm that North Korea regards the new U.S. administration as weak and distracted by domestic affairs--overwhelmed, in fact, by dealing with a recession that could turn into a depression. [Scroll and click on the video clip.]

North Korea's Stalinist/Kimist/criminal regime is probably right about that. Pyongyang's planned, provocative long-range rocket launch is meant to frighten the United States and Japan, focus world attention on nuclear-armed North Korea, and divert attention from the nuclear nd missile programs of its ally, Iran--an implacable, Islamist foe the Obama administration is bent on appeasing.

China, meanwhile, is unruffled by the planned launch. On some levels, China Confidential analysts say, Beijing actually approves of the move because it reinforces China's importance as a potential peace preserving power with regard to the Korean peninsula and guarantor of stability in the North in the event of a regime collapse.


COMMENT: As for Obama's perceived weakness, click below to view a disturbing clip from last night's 60 Minutes interview. The nation needed and wanted another FDR--a President who beat both the Axis and the Great Depression. Obama is no FDR. One can't help but suspect that should the North Korean rocket hit or come close to hitting U.S. soil, the President's first response would be to call for calm--that, and, also, perhaps, protection for North Korean assets or diplomats at the U.N. In the name of diplomacy and tolerance, naturally.

The U.S. Agency for International Development, which has donated 10 billion U.S.-made condoms to poor countries, is switching to cheaper, Chinese-made condoms--a move that is expected to kill 300 American jobs. Click here for the story, here for a report on China's condom market, and here and here for stories about unauthorized use of celebrity images to sell Chinese condoms.

Dune Lawrence and Kevin Hamlin report from Beijing:

China’s top foreign-exchange official said the nation will keep buying Treasuries and endorsed the dollar’s global role, supporting the U.S. as the Obama administration increases spending to revive growth.

Treasuries form “an important element of China’s investment strategy for its foreign-currency reserves,” Hu Xiaolian, director of the State Administration of Foreign Exchange, said at a briefing in Beijing today. “We will continue this practice.”

Continue here.

China’s housing market has probably hit bottom. Falling interest rates, the government’s stimulus package and other measures seem to be reviving demand. Read all about it here.

A never-ending nightmare of depraved criminality and totalitarianism....

Vitit Muntarbhorn, the U.N. Special Rapporteur on Human Rights in North Korea, says food deprivation is still a major human rights issue in North Korea.

Pyongyang last week barred any more American food aid from entering the reclusive nation. Muntarbhorn says the North Korean regime's abuse of its citizens should be addressed by the entire global community. His ABC Radio Australia interview is available here.

China's economy may recover first from the global recession. Click here to read Irene Shen's report from Shanghai.

Barbara Demick reports from Beijing:

Hundreds of Tibetans surrounded a police station and government offices in a remote enclave of western China after the apparent suicide of a monk who had been taken into police custody.

The protests near the Rabgya Monastery were the largest this year and show how volatile the situation remains despite the deployment of tens of thousands of paramilitary troops.

Official Chinese media reported that six people were arrested and that 89 "surrendered to police" after hundreds "attacked the police station . . . assaulted policemen and government staff," leaving several slightly injured.

Continue here

Confirming a recent China Confidential report, a wave of nostalgia for Mao Zedong is sweeping China. Click here for an overview.

Sources in Beijing say the ruling Communist Party is trying to figure out how to stay ahead of the trend, which could encourage social unrest. Analysts say there are factions in the military that would like to use the longing for old-school Communism to their advantage.


EDITOR'S NOTE: China is not the only place where there is growing nostalgia for a strong leader. Click below to view a video tribute to the late Egyptian dictator, Gamal Abdel Nasser, once a Third World icon. The video shows signs of becoming an underground hit in the Arab world.

Could this be the start of an anti-Islamist trend? One hopes that is the case. Although the left-leaning Nasser was an enemy of Israel and a Soviet ally, he was a secular nationalist leader--a pan-Arab pseudo-socialist--and more rational than the missile-mad mullahs and jihadists who nowadays threaten to turn the Middle East into a nuclear hell. One suspects that peace between Israel and Egypt under Nasser may have been possible, despite his unleashing a dynamic that led to the Six-Day War of June 1967--and Egypt's disastrous defeat--and that relations between his regime and the United States could have taken a different, more positive track.

The notion is at least plausible. WIth Arab and Iranian Islamists, however, it is impossible to imagine anything but endless conflict and terrorism--and a potentially catastrophic conflagration capable of engulfing the entire Middle East and even the entire world (including China, which is also plagued by a domestic Islamist threat).