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."

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.