Steven Levy looked at Liu's company Augmentum, a rapidly expanding three-year-old software start-up whose programmers are working on projects that go beyond the traditionally "low- and medium-level programming" tasks that have usually been outsourced to China.

The article, which originally appeared in Newsweek's June 12, 2006 issue, examined the challenges that face Chinese software companies as they attempt to tap into their workers' creativity and innovation to tackle the most advanced programming projects at--as Liu puts it--"a third of the price it would cost our customers to do [it] in-house."

For Vice President Dick Cheney, the question of how to deal with would-be nuclear powers in Iran and North Korea is disarmingly simple.

"We don't negotiate with evil; we defeat it,'' Cheney reportedly pronounced, dismissing a State Department bid in late 2003 to make a deal with North Korea. A similar prescription was offered when moderates in the Iranian regime made a secret approach that year to begin talks with the United States.

The long history of the Cold War is replete with the issue of whether -- and how -- to talk with a mortal foe. U.S.-Soviet relations froze time and again. For two decades, there was no dialogue at all with Communist China. But in the end, American policymakers have always chosen the path of negotiation.

For Cheney -- and for President George W. Bush -- sitting down at a table with the likes of North Korea's Kim Jong Il would be an act of weakness, a lessening of American power and prestige that granted undeserved legitimacy to despised regimes.

In recent months, and most prominently last week, the Bush administration has appeared to reverse its stance, opening the door to direct talks with North Korea and Iran.

These moves are carefully constrained, reflecting in part the ongoing divisions in the Bush administration about the advisability of going down this path. Contacts with both regimes will take place only within the framework of multilateral talks and focused solely on the issue of their nuclear programs. One-on-one talks on a broader agenda, including establishing basic diplomatic relations, have been explicitly ruled out, for now.

The decision to talk seems driven in large part by the realization that defeating evil has proven to be more difficult than some in the administration assumed. After Iraq, the use of military force against Iran -- and even more so against a North Korea already probably armed with nuclear weapons -- is highly unlikely. Potential allies in imposing economic and political sanctions -- the Europeans, Russians and Chinese, along with South Korea and Japan -- won't even consider such steps without a greater show of American willingness to negotiate with the evil enemy.

Limited as it is, the significance of this shift has to be seen against the backdrop of deep resistance to such diplomatic engagement in the Bush administration.

"There is a fundamental disagreement over how to approach the North Korea problem,'' explained Richard Armitage, who served as deputy secretary of state from 2001-05.

"'Those of us at the State Department concluded: From the North Korean point of view, the nuclear issue is the only reason we Americans talk with them,'' Armitage recounted in a recent interview with the Oriental Economist newsletter. "Therefore, the North Koreans would be very reluctant to let go of the nuclear program. We knew it was going to be a very difficult process. But you have to start somewhere. You start by finding out what their needs and desires are, and seeing if there is a way of meeting those needs and desires without giving away something that is sacred to us.''

But the White House and others in the administration blocked at every turn their attempts to open direct dialogue with Pyongyang. "There is a fear in some quarters, particularly the Pentagon and at times in the vice president's office, that if we were to engage in discussions with the North Koreans, we might wind up with the bad end of the deal,'' Armitage said. "They believe that we should be able to pronounce our view, and everyone else, including the North Koreans, should simply accept it. This is not a reasonable approach.''

Six-party talks

The compromise was the decision, through the good offices of China, to convene six-party talks that included surrounding countries such as Russia, South Korea and Japan. Administration officials have argued that this format rallies others to back the United States in pressing the North Koreans, effectively isolating them.

The same argument was made for the United States to support, but not directly join, until this past week, European negotiations with Iran. As recently as April, Bush was still publicly wedded to this logic.

"With the United States being the sole interlocutor between Iran, it makes it more difficult to achieve the objective of having the Iranians give up their nuclear weapons ambitions,'' Bush said in answering questions following an April 10 speech. "It's amazing that when we're in a bilateral position, or kind of just negotiating one on one, somehow the world ends up turning the tables on us.''

Arguably, however, the opposite has been true. In the case of Iran, the Europeans, including Great Britain, have consistently urged the United States to talk directly to Iran.

An excuse not to talk

All the other partners in the six-party talks, including the closest U.S. ally, Japan, have held their own direct talks with Pyongyang and pushed the United States to do the same. Ultimately, it is the United States that has found itself isolated.

North Korean experts in the State Department had warned against relying only on this approach.

"In the case of negotiating with North Korea, more is not merrier and certainly not more efficient,'' says Robert Carlin, a longtime CIA and State Department intelligence expert on North Korea who participated in virtually all negotiations with the North from 1993-2000. "The more parties and people at the table, the greater the likelihood of posturing, and the harder it is to make concessions.''

In his view, the insistence on a multilateral approach was initially an excuse not to talk. "They didn't want bilateral talks with Pyongyang and they certainly didn't trust the State Department to conduct any such thing.''

These divisions have persisted. Last September, with the backing of Secretary of State Condoleezza Rice, the State Department's chief negotiator was finally allowed to meet his North Korean counterpart. This led to an agreement in the six-party talks last September, a compromise that conceded in principle the North Korean right to have a nuclear power reactor.

That deal prompted a backlash from Cheney and others, according to senior officials within the administration, and fresh curbs on direct contacts with Pyongyang. But the new proposal to Iran apparently also includes an offer to supply power reactors.

What still has resonance is the belief that direct talks with North Korea and Iran amount to acceptance of the regimes in power in both countries.

Resistant to deal

"Ultimately the president is, on this issue, very, very resistant to the idea of doing a deal, even a deal that would solve the nuclear problem,'' Flynt Leverett, who dealt with Iran for the Bush National Security Council, said in a recent interview. "You don't do a deal that would effectively legitimate this regime that he considers fundamentally illegitimate.''

The administration may calculate that this offer of talks will only serve to isolate Iran and shore up ties with Europe. But it may have stepped onto a slippery slope toward a bargain that will necessarily involve painful concessions to Iran and lead toward a resumption of diplomatic relations broken off almost three decades ago.

Opposition to negotiating with the enemy is deeply embedded in the Bush administration. There is, however, a precedent for a sea change -- Ronald Reagan. President Reagan came to office in the wake of the Soviet invasion of Afghanistan and the American boycott of the 1980 Moscow Olympics. Dialogue with the Soviets was halted and the staff of the Reagan National Security Council opposed any contacts with Moscow.

Reagan himself, in a famous 1983 speech, referred to the Soviet Union as an ``evil empire,'' followed two weeks later by the launching of the "star wars'' missile-defense program. Soviet leaders, we learned later, were convinced that the United States might launch a first strike. In August of that year, Soviet fighter aircraft shot down a Korean Airlines passenger jet that had strayed from its flight path, a sign of sharply increasing tension.

In the Reagan administration, against fierce internal opposition, Secretary of State George Shultz pushed to resume dialogue with the Soviets, beginning with achievable steps such as resuming grain sales. Reagan ultimately agreed, starting down a road that led to the series of dramatic summits from 1985 with incoming Soviet leader Mikhail Gorbachev.

Reagan's willingness to sit down with the "evil'' foe flowed from a sense of conviction in American strength. It is not yet evident that his Republican successor shares the same sense of confidence.

On May 20-21, 2006, the Stanford Project on Regions of Innovation and Entrepreneurship (SPRIE) and the China Institute for Science and Technology Policy (CISTP) of Tsinghua University co-sponsored an international workshop in Beijing on "Greater China's Innovative Capacity: Progress and Challenges."

The workshop, held in collaboration with the Zhongguancun Science Park and the Industrial Technology Research Institute (ITRI), was hosted on the campus of Tsinghua University. Participation by more than 70 academics, industry leaders and government policy makers reflected many of the ongoing partnerships SPRIE holds with institutions, individuals and organizations around the world.

The nine workshop sessions and more than twenty paper presentations provided rich opportunities for engaging discussion and knowledge sharing. The output of this workshop will lead to the publishing of selected proceedings in the near future.

Theme and Topics

The workshop addressed how the innovative capacities in Greater China are evolving. What are the most significant areas of progress and challenge? Scholars and business leaders from the U.S., Europe and Asia were brought together to discuss new research and current practice of key aspects of Greater China's innovative capacity: inputs, processes, outputs, institution, government policies, business models and management strategies.

More specifically, the workshop focused on:

• information and communications technologies
• innovation across the value chain from R&D to business processes and models
• development within and linkages among key regions and players in mainland China, Taiwan, Singapore and Silicon Valley

The Walter H. Shorenstein Asia-Pacific Research Center is happy to announce that Daniel Sneider has accepted the position of associate director for research. For the past year (2005-06), he has been a Pantech Fellow at the Center and involved in many Center projects and events.

Sneider has had a long career as a foreign correspondent and worked most recently as the foreign affairs columnist of the San Jose Mercury News. His column on foreign affairs, looking at international issues and national security from a West Coast perspective, is syndicated nationally on the Knight Ridder Tribune wire service, reaching about 400 newspapers in North America. He previously served as national/foreign editor of the San Jose Mercury News.

From 1990-94, Sneider was the Moscow bureau chief of the Christian Science Monitor, covering the end of Soviet Communism and the collapse of the Soviet Union. From 1985-90, he was Tokyo correspondent for the Monitor, covering Japan and Korea. He has worked in India covering South and Southeast Asia, covered the United Nations, and extensively covered defense and national security affairs.

Sneider's responsibilities as associate director for research will fall into two main categories: research management and program development. He will work closely with the Center's director and faculty to design and manage research projects. With the Center director, he will represent the Center in its interactions within the Freeman Spogli Institute and the University, and will serve as a liaison with specialists from the fields of academia, policy, and business. Sneider will also oversee the publication of Center research findings. He will also provide substantive support for the varied lecture and seminar series the Center hosts each year.

"He joins us at a critical time," says Center director, Gi-Wook Shin, "and I have no doubt that his contribution will give a tremendous boost to our research projects, particularly those that are policy-oriented."

Sneider will also be conducting his own research, which includes finishing his book on Cold War diplomatic history of the United States' alliances with Japan and Korea, and continue to write commentary on current policy issues in the Asia-Pacific region and on U.S. foreign policy.

Sneider will start in this position on July 1, after he has completed his Pantech Fellowship responsibilities.

Iran has climbed to No. 1 on the Washington crisis hit parade. The question of how to stop Iran's nuclear program has unleashed a torrent of punditry. Advocates of diplomacy and a military strike spar on television and in op-ed pages.

Iran's nuclear ambitions deserve our attention. But even by the most alarmist estimates, Iran is years away from being able to build a nuclear warhead.

Meanwhile, over in Northeast Asia, North Korea now has enough fissile material for five to seven weapons and is quietly churning out enough plutonium to build at least one warhead a year, according to rough intelligence estimates. More ominously, work is moving ahead on a new reactor that could potentially produce enough separated plutonium for up to 10 weapons a year.

Somehow this danger prompts no sense of urgency in Washington. After a promising breakthrough last September, the six-party talks to halt the program have lapsed into a stalemate that is close to total collapse.

The Bush administration seems unconcerned. Diplomacy has ground to a halt. The North Koreans refuse to return to the six-party talks. The White House has barred its chief negotiator from talking directly with them, despite Pyongyang's desire to meet and the urging of our six-party partners.

Administration officials have recently floated a report that they are considering a new initiative to negotiate a peace treaty with North Korea. This is a smoke-screen to conceal an empty North Korea policy. According to administration officials, the peace treaty idea has been kicking around for months without going anywhere. South Korean officials tell me that they have been waiting, so far in vain, for any serious detailed discussion of this proposal.

It is the president himself who opposes direct negotiations with Pyongyang, over anything, including a peace treaty. He sees direct talks with North Korea or Iran as an act of weakness. "Somehow,'' he said last month, "the world ends up turning the tables on us.''

In reality, the administration is content to pursue a strategy of going after North Korean counterfeit currency and production of amphetamines and cigarettes, hoping to cut off the flow of funds from these activities. According to administration officials, Under Secretary of State Robert Joseph, the driving force behind this policy, gleefully talks about ``turning out the lights'' in Pyongyang.

Administration officials claim they are drying up slush funds that North Korean dictator Kim Jong Il uses to buy the loyalty of his subordinates. Some even suggest this could trigger a coup against Kim, with the Chinese pulling the strings.

But American intelligence experts who monitor North Korea closely see little evidence to support the conclusion that North Korea is being brought to its knees. Even if the measures are drawing blood, it is self-delusional to believe that this will bring down a regime that has already proven it is willing to starve its own population to stay in power.

The administration seems intent as well on pressing China and South Korea to curb their trade and investment with the North. The administration's special envoy on human rights in North Korea, Jay Lefkowitz, seems to spend most of his time attacking the South for setting up an industrial park in Kaesong in the North. He portrays it as exploiting slave labor. The South Koreans defend it as a vehicle to bring capitalism into the communist North.

The Bush administration's combination of attempted coercion and diplomatic freeze has only two visible effects so far.

First, it lends credence to North Korean claims that the United States, contrary to the joint statement issued last September, is still intent on overthrowing their regime.

Second, it undermines gains made by allowing chief envoy Christopher Hill to hold direct talks with his North Korean counterparts. That demonstrated a flexibility and confidence that disarmed critics, particularly in South Korea, and isolated the North. It strengthened coordination with China and South Korea, the two players with the most leverage over the North.

Now officials in both those capitals again question American readiness to seriously negotiate. Beijing and Seoul are even more convinced that pushing market reforms is the only route to bring the North to give up its nuclear option. Next month former South Korean President Kim Dae Jung will revisit his historic summit with the North Korean leader in 2000.

This growing gap with our allies and partners is deadly. Even if we wanted to opt for coercion, the United States can't do so alone. For that reason, it is urgent that the United States regains the diplomatic upper hand.