WASHINGTON - Despite its threat of severe consequences, the Bush administration has little leverage to use on North Korea to keep it from testing a long-range missile and few ways to punish the nuclear-armed nation if it proceeds.

The United States has no diplomatic or economic ties with North Korea, the rudimentary U.S. missile-defense system is untested in real-world conditions and Pyongyang is regarded as having a right to test missiles, making any American attack to forestall a launch an act of war with potentially explosive consequences.

"The United States could try to shoot down the rocket, but good luck,'' said Wonhyuk Lim of the Brookings Institution, a policy-research organization in Washington.

The dearth of options illustrates the limits of the administration's pre-emption strategy and its need to rely on the cooperation of others -- especially given the strains on the U.S. military from Iraq and Afghanistan -- to contain threats.

Washington hopes that the world's only Stalinist regime will heed demands by the United States, South Korea, Japan, Russia and China to uphold a self-imposed 1999 moratorium on missile tests and rejoin talks on curbing its nuclear program in return for security guarantees and economic and political benefits.

At the same time, the administration is reviewing its options should the Kim Jong Il regime test-fire what U.S. officials describe as a multi-stage Taepodong-2 missile, thought to be capable of reaching Alaska.

"The launch of a missile would be a provocation,'' Assistant Secretary of Defense Peter Rodman said Thursday during a House Armed Services Committee hearing. "If such a launch took place, we would seek to impose some cost on North Korea.''

Rodman declined to say what Washington would do. Experts said that even the imposition of sanctions by the United States would be largely symbolic.

They think that North Korea would not have readied the missile for flight unless it had decided it could live with the consequences.

"It probably means they are not worried about the American reaction,'' said Daniel C. Sneider of Stanford University's Shorenstein Asia-Pacific Research Center. "There is nothing that the United States can do to them.''

The United States has no diplomatic relations or financial assistance it can threaten to cut, and it suspended contributions to international food aid for North Korea last year.

The administration has moved against Pyongyang by trying to halt its missile sales to other countries, its alleged international narcotics trafficking, and its alleged counterfeiting of U.S. currency, cigarettes and over-the-counter drugs.

Under American pressure, banking regulators in February froze North Korean accounts at the Banco Delta Asia, a Macao bank that the U.S. Treasury Department accused of laundering North Korea's ill-gotten gains.

Other banks, anxious to avoid American scrutiny, reportedly have curtailed business with North Korea.

David L. Asher, a former Treasury Department official who oversaw the crackdown on North Korea's alleged illicit dealings, said the United States could respond to a test with an intensified campaign against Pyongyang's alleged international criminal activities that would hurt the ruling elite.

"Do not underestimate the impact of the financial pressure we could put on them,'' said Asher, a scholar with the Institute for Defense Analyses, a policy-research organization.

Washington is counting on Japan, which also is threatened by Pyongyang's nuclear arms and missile programs, to react to a launch by closing ports to North Korean ships and shutting off remittances by ethnic Koreans to relatives in North Korea. But those measures are expected to have limited impact.

A North Korean missile test in 1998 prompted Japan to boost missile-defense cooperation with the United States, and experts said a new launch probably would prompt Washington and Tokyo to forge even closer military ties.

The only nations that could tighten the screws significantly are China and South Korea, North Korea's main foreign trading partners and aid donors.

But while Seoul and Beijing would be outraged, because a missile test would effectively kill hopes of restarting talks on containing North Korea's nuclear arms program, they are unlikely to take any step that could rock Pyongyang.

Both are anxious to avoid destabilizing their neighbor of 26 million people. China doesn't want to be overwhelmed by North Korean refugees, and South Korea would be unable to bear the economic and social costs of sudden reunification.

They also fear that Kim's government could lash out with its million-member army against the South, igniting a conflict that would drag in the United States and devastate the Asian-Pacific economy.

"China and South Korea fear instability more than they fear a nuclear North Korea,'' said Marcus Noland, an expert at the Economic Policy Institute.

Moreover, Beijing probably would be unwilling to jeopardize the budding commercial ties it has been pursuing with North Korea.

"China opposes sanctions on North Korea because it believes they would lead to instability, would not dislodge the regime but would damage the nascent process of market reforms and harm the most vulnerable,'' said a February report by the International Crisis Group, a conflict-prevention organization.

South Korea has been pursuing a policy of economic engagement and political exchanges with North Korea.

The United States has been consulting with members of the U.N. Security Council on a response to a North Korean test. But North Korea has the right under international law to test-fire missiles, making it tough for the United States to win more than words of chastisement of North Korea from the council.

Japanese politics have long been driven by patronage and pork. Prime Minister Junichiro Koizumi has managed to add personality to the mix. Issues, when they mattered at all, were deeply domestic -- the last election, for example, focused on deregulation of the postal savings system.

So it is a bit of a shock to find Japan embroiled in a political struggle with foreign policy topping the agenda. The contest to succeed Koizumi has become a surrogate battleground for a debate over how to repair Japan's tattered relations with its Asian neighbors, China and South Korea.

Put simply, this war of ideas has two schools -- Conservative Realists and Assertive Nationalists.

The Realists fear that Japan has become dangerously isolated from Asia, its influence waning to the benefit of China. Constant tensions with China and South Korea put Japans economic recovery at risk, they worry. The Realists blame Koizumi for his provocative visits to the Yasukuni shrine to Japan's war dead and worry he tilts too far in his embrace of Bush and his policies in places such as Iraq and Iran.

The Nationalists see China as the principal national security threat to Japan. Their priority is to strengthen the alliance with the U.S., even at the cost of ties to Asia. They believe it is crucial to stand up to what is seen as Chinese bullying, symbolized by Beijing demanding that the Yasukuni visits stop as a price for high-level contacts.

This debate harkens back to the Meiji era and Japan's emergence as a great power. But the tortured history that ensued has left a clear legacy -- both camps accept the U.S. alliance as the foundation of Japanese security. The issue now is one of balance and relative independence in the formation of Japanese policy.

Each camp has a champion in the unofficial campaign for the September vote to replace Koizumi as president of the conservative Liberal Democratic Party -- a post that carries with it the premiership. Chief Cabinet Secretary Shinzo Abe, the frontrunner and Koizumi's preferred successor, represents the Nationalists. Yasuo Fukuda, who served as chief cabinet secretary for four years, until 2005, carries the Realist flag into battle.

Abe and Fukuda are cast from almost identical molds. Both are veteran politicians, scions of famous political families, even members of the same faction within the party. Yet they offer remarkably contrasting positions on Japan's diplomatic path in Asia and, less visibly, on how to manage relations with the U.S.

Abe, at age 51, is considered a representative of the younger generation. Like Koizumi, he has personal appeal, at ease on television and able to speak directly and emotively. Abe is the son of a former foreign minister and grandson of former Premier Nobusuke Kishi, a towering figure in post-war conservative politics.

Fukuda, who turns 70 in July, is an old-style Japanese politician, more comfortable working behind closed doors than in front of the TV cameras. "Fukuda is cool, rational, calculating, practical, nonideological and noncommunicative," comments William Breer, a former senior U.S. diplomat in Japan. Fukuda, too, is the son of a major conservative leader, former Premier Takeo Fukuda.

Abe is the front-runner, scoring well in polls and among party members. But Fukuda's star has risen in recent months, tied largely to the rise of tensions with China.

"Fukuda looks more mature, serious and experienced," says Breer. "People want better relations with China, though not at any cost. Fukuda can probably deliver that. Abe may not."

The starkest gap between the two men is over Yasukuni. Fukuda led an effort five years ago to create a secular memorial that would allow a prime minister to honor the war dead while avoiding the issue of the 14 Class A war criminals enshrined at Yasukuni and the unabashed lack of remorse over the war displayed at the shrine's museum.

Fukuda decried the defiant rhetoric in Japan surrounding the shrine, which has become a symbol of defying Chinese pressure. "Discussions in Japan have escalated too far," he said in a speech in late May. "Voices raised here reach China and South Korea, creating a vicious cycle."

Abe, like Koizumi, sees China's interference on Yasukuni as the problem.

"China's diplomacy is high-handed," Abe said recently. "If we permit China to engage in such diplomacy, China will also take a similar attitude on other issues."

But recently Abe pointedly avoided directly answering the question of whether he would continue the shrine visits. That has led some to speculate that Abe may want to find a way out of this cul-de-sac.

The Japanese public, according to recent polls, is evenly divided on the question of whether the next prime minister should visit Yasukuni. They overwhelmingly support the goal of improving relations with Japan's Asian neighbors, but a majority is also sympathetic to Abe's stance against Chinese pressure on Yasukuni.

Beyond Yasukuni, the two men offer contrasting visions of Japan's relationship to Asia and response to growing regional integration.

Fukuda points to the example of the "Fukuda Doctrine," a 1977 initiative by his father that responded to rising anti-Japanese sentiment by declaring that Japan would not become a military power and would try to build relations in the region as an equal partner.

In a series of recent speeches, Fukuda advocated integration of the region through an economic partnership agreement and called on Japan, China, and South Korea to cooperate toward this end. He visited South Korea in March along with former Prime Minister Yasuhiro Nakasone and met with the South Korean president.

Abe, in contrast, echoes the Bush administration in calling for a strategic dialogue with India, Australia, and other democracies in Asia, as well as the U.S., unifying on the basis of common values -- widely interpreted as a thinly disguised attempt to counter China's rise.

They differ on other issues. Abe is a hardliner on North Korea, while Fukuda has pushed for negotiations. Abe puts revision of Japan'a antiwar constitution at the top of his priority list. Fukuda warns about hasty steps that would alarm Japan's neighbors.

When it comes to managing the U.S. alliance, the choice is subtle. Both have strong ties to the Bush administration. Fukuda played a key role in forging the Japanese rapid response to the September 11 attacks, including the decision to send ships to support the war in Afghanistan. Both supported the dispatch of peacekeeping troops to Iraq.

"Fukuda, however, might be a little more honest in evaluating U.S. foreign policies," suggests Breer. "He might not be as pliable as Koizumi."

Abe remains the favorite to win, particularly among LDP members. But Fukuda's fortunes may have been aided by the emergence of Ichiro Ozawa as leader of the main opposition party. Ozawa, a remarkable political operator and former LDP leader, believes in issue-based politics. He visited China this week and met with Hu Jintao, which suits his clear Realist agenda.

Other events could shape the fight. Koizumi has signaled his desire to visit Yasukuni on August 15, the anniversary of Japan'a surrender. Some analysts suggest that could strengthen Fukuda's appeal. Alternately, the North Korean test missile launches could consolidate Abe's bid for power.

Whatever the outcome, this succession fight will likely mark a turning point for Japan. It could slow -- or perhaps accelerate -- the slippage toward Sino-Japanese tensions. And it will mark the re-emergence of a Japan that looks outward. It is time for the rest of the world to pay attention to Japanese politics.

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