california governor arnold sha wars neger. >> i want to ask you a bunch of questions and have them answered immediately. >> go right ahead and shoot. >> who is your daddy and what es he do? >> don't laugh, maybe that's why schwarzenegger endorsed mccain in 2008. thank you for watching "state of the union." you can find today's analysis at the our website. coming up farid gazzara gps. >> this is "gps" welcome to all of you in the united states and around the world. i'm fareed zakaria. today on the show we have first one-on-one with the president's top new military adviser, general martin dempsey. he's the chairman of the joint chiefs of staff. we'll hit all of the hotspots, syria, iran, china, egypt, and

more. later in the show, the u.s. rolled out the red carpet for china's next president but what is going on behind the scenes between the two rival nations? we have a great panel of china watchers. also, believe it or not, the eurozone crisis is solved. how, what? stay tuned, we'll explain. first, here is my take. we're hearing a new concept these days in discussions about iran. the zone of immunity. the idea often explained by ehud barak, israel's defense minister, is soon iran will have enough nuclear capacity that israel would not be able to inflict a crippling blow to its program. israeli officials explained that we americans cannot understand their fears that iran is an ex stin shall danger to them. but, in fact, we can understand because we went through a very similar experience ourselves. after world war ii as the soviet union approached a nuclear

capability, the united states was seized by a panic that lasted for years. everything that israel says about iran now, we said then about the soviet union. we saw it as a radical, godless, revolutionary regime opposed to every value we held dear, determined to overthrow the governments of the western world in order to establish global communism. we saw moscow as irrational, aggressive, and utterly unconcerned with human life. after all, stalin had just sacrificed a mind boggling 26 million soviet lives in his country's struggle against nazi germany. just as israel is openly considering pre-emptive strikes against iran, many in the west urge such strikes against moscow in the late 1940s. the calls came not just from hawks, but even from life-long pacifists like the public intellectual bertrand russell. to get a sense of the mood of the types, consider this entry from the november 29, 1948,

diary of harold nicholson, one of the coolest and most sober british diplomats of his generation. quote, it is probably true that russia is preparing for the final battle for world mastery and that once she has enough bombs, she will destroy western europe, occupy asia, and have a final death struggle with america. if that happens and we are wiped out over here, the survivors in new zealand may say that we were mad not to have prevented this. there is a chance that the danger may pass and peace can be secured with peace. i admit it is a frail chance, not 1 in 90. in a speech at the boston navy yard in august 1950, the secretary of the navy, francis matthews, argued that the united states needed to become an initiate or of war of aggression and in this sense would become the first aggressor for peace. in the end, however, the global revolutionaries in moscow, the

mad autocrats in pyongyang, the terrorist supporting military in pakistan all with nukes have been deterred by mutual fears of destruction. we call it deterrence. and, remember, israel has 250 nuclear bombs, many on submarines to ensure that iran realizes it would be mutually assured destruction. while the iranian regime is often called crazy, it has done much less to merit that term than did a regime such as china. over the past decade, there have been thousands of suicide bombings around the world by saudis, egyptians, pakistanis, but there has not been a single suicide attack by an iranian. is the iranian regime really likely to launch the first? the efforts to delay and disrupt iran's nuclear program are working, but even if one day tehran manages to build a few

crude bombs, a policy of robust containment and deterrence is better to contemplate than a preventative war. let's get started. general martin dempsey has had a storied career in the u.s. army. he commanded the first armored division, old ironsides, in the rishg w iraq war. he ran centcom. he's been the army chief of staff and he's now the nation's highest ranking military officer and the president's top military adviser, the chairman of the joint chiefs of staff. general dempsey, thank you for joining us. >> thanks. i'm glad to be here. >> what would you say to those who argue that the united states should arm the opposition movement in syria? >> i think it's premature to take a decision to arm the opposition movement in syria

because i would challenge anyone to clearly identify for me the opposition movement in syria at this point. and let me broaden the conversation a bit. syria is -- it's an arena right now for all the various interests to play out. what i mean by that is you have great power involvement. turkey clearly has an interest, a very important interest. russia has a very important interest. iran has an interest. what we see playing out is that, not just those countries, in fact, potential not all of them in any case, but we see the various groups who might think that the -- that at issue is a sunni/shia competition for regional control. >> the iranians on the one stand -- >> i do.

>> and the saudis -- >> and the saudis on the other hand. there's indications al qaeda is involved and they're interested in supporting the opposition. there are a number of players all of whom are trying to reinforce their particular side of this issue, and until we're a lot clearer about, you know, who they are and what they are, i think it would be premature to talk about arming them. >> militarily, is syria very different from libya in the geography, in the case of libya you had an eastern half of the country that the rebels had. they had a city, benghazi. or do you believe if you needed to, you could militarily intervene in syria in the same way you did in libya? >> not the same way we did in libya. syria is a very different challenge. it's a different challenge, as you described it geographically. it's a different challenge in terms of the capability of the syrian military. they are very capable. they have a very sophisticated, integrated air defense system, for example. they have chemical and

biological weapons. now, they haven't demonstrated any interest or any intent to use those, but it is a very different military problem. that said, of course, we're looking at all of that. we're trying to, you know, gather the best intelligence we can and take a look at what options we might have should we be asked to provide those to the national command authority in this country. >> do you think intervening in syria would be difficult? >> i think intervening in syria would be very difficult. >> so what would you do? you're watching thousands of people be slaughtered. the regime because it willing to be brutal is surviving. >> that's a fact. the current path of trying to gain some international consensus is the proper path rather than take a decision to do anything unilaterally. and i know that's diplomatic efforts are ongoing, but, you know, i wear the uniform i wear to provide options when asked. and we'll be prepared to do that, but this would not be --

it would be a big mistake to think of this as a another libya. >> another difficult military challenge. do you believe that israel has the capacity to strike iran in a way that would significantly retard its nuclear program? >> i think that israel has the capability to strike iran and to delay the production or the capability of iran to achieve a nuclear weapon status. probably for a couple of years. but some of the targets are probably beyond their reach and, of course, that's what concerns them. that's this notion of a zone of immunity that they discuss. >> and if that were to happen, do you believe that iran would engage in retaliatory measures, not just against israel, but against the united states' interests in iraq and afghanistan? >> that's the question with

which we all wrestle, and the reason that we think that it's not prudent at this point to decide to attack iran. that's been our counsel to our allies, the israelis, well-known, well-documented. we also believe we know that the iranian regime has not decided that they will embark on the effort to weaponize their nuclear capability. >> do you think that is still unclear, that they're moving on a path for nuclear technology but whether or not they choose to make a nuclear weapon is unclear? >> it is. i believe it is unclear, and on that basis i think it would be premature to exclusively decide that the time for a military option was upon us. i mean, i think that the economic sanctions and the international cooperation that we've been able to gather around sanctions is beginning to have an effect. i think our diplomacy is having an effect.

and our preparedness. i mean, fundamentally we have to be prepared, and that includes for the most part at this point being prepared defensively, but just as i mentioned in the earlier segment about our preparedness to provide options should the nation decide to do something in syria, we have to have the same options available should the nation decide to do something in iran. >> when you observe iranian behavior, does it strike you as highly irrational? does it strike you as sort of unpredictable or do they seem to follow their national interests in a fairly calculating way? >> that is a great question, and i'll tell you that i've been confronting that question since i commanded central command in 2008, and we are of the opinion that the iranian regime is a rational actor. and it's for that reason, i think, that we think the current path we're on is the most

prudent path at this point. >> do you think that the israelis understand that the united states is counseling them not to strike, and do you think that they will be deterred from striking in the near future? >> well, i'm confident that they understand our concerns, that a strike at this time would be destabilizing and wouldn't achieve their long-term objectives. but, i mean, i also understand that israel has national interests that are unique to them, and, of course, they consider iran to be an existential threat in a way that we have not concluded that iran is an existential threat. so i wouldn't suggest sitting here today that we've persuaded them that our view is the correct view and that they are acting in an ill-advised fashion, but we've had a very candid, collaborative conversation. we've shared intelligence. and i was in israel about three

weeks ago and spent two days there with the senior leaders, and so we're -- we are continuing that dialogue. >> if you were a betting man, would you bet that israel won't strike? >> well, fortunately, i'm not a betting man. >> when we come back, more with general dempsey. is it your best judgment after meeting with egyptian officials, egyptian military, that the americans who are being held there will be released and will be able to come back home? >> well, i can't guarantee that. i'm a marathon runner, in absolute perfect physical condition and i had a heart attack right out of the clear blue... i'm on an aspirin regimen... and i take bayer chewables. [ male announcer ] be sure to talk to your doctor before you begin an aspirin regimen. he's my success story. [ laughs ] 8% every 10 years.age 40, we can start losing muscle -- he's my success story. wow. wow.

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...we inspected his brakes for free. free is good. free is very good. my money. my choice. my meineke. and we are back with the chairman of the joint chiefs of staff, general dempsey. let me ask you about the news this week which is, of course, about china and xi jinping, the soon-to-be president of china. the chinese military budget is going to double within three years of 2015, that is the estimate some people have. does that worry you? >> well, let me, you know, raise from the tactical to the

strategic issues. you know that in our new strategy we've taken a decision to rebalance ourselves toward the pacific, and in so doing it's not as though we're flipping a switch. we've never left the pacific really, but we want to become more engaged in the pacific. i think this is more opportunity than liability to improve our relationship with china and i am personally committed to having that as the outcome rather than get into an arms race or into some kind of confrontation with china. >> you're just back from egypt. >> uh-huh. >> is it your best judgment after meeting with egyptian officials, egyptian military, that the americans who are being held there will be released and will be able to come back home? >> well, i can't guarantee that. what i can tell you is that in my engagement with them, and i have known the field marshall and the generals, the three key interlocutors with whom i met, i

can tell you that we came to a very clear understanding of how serious this was and also a clear understanding that our relationship would be somewhat stalled until this particular issue is resolved. now, that said, we did, i did, reinforce the importance of our relationship with the egyptian military, and i do believe that egypt is in many ways a cornerstone of the future of the region in that if this arab spring is to have a positive outcome, i think we'll see it first in egypt. and so, you know, the stakes are extraordinarily high, and i made that clear. >> you know that in egypt many people, including now the largest political party there, the muslim brotherhood, believe that the egyptian military seems very reluctant to yield power, both in terms of giving up some of its political power but also its economic privileges. do you sense that this is a problem that is an obstacle to egypt's democratic development? >> well, i think that the

various parties in egypt are kind of circling each other trying to determine just what they intend to do. my personal observation is i think that the military is actually eager to c.ede power because they have seen how difficult it can be to manage the street, manage the media, manage a judiciary. although the military has been largely running the country for decades, they haven't been under the unblinking eye of the people and the media. in this new world in which they find themselves. i think they're eager to cede power and go back to barracks but they also have some vested interest in protecting their budget and protecting their, you know, their authorities that they've become quite accustomed to, and they're going to have to work that out internally. >> are you optimistic about egypt? >> well, you know, i am optimistic because i do think

that the arab spring can produce a democracy, and i think that, you know, i'd be eager to see a competition of ideas actually play out. but, you know, i'm concerned because in some way i think the competition of ideas may be somewhat stymied. >> the budget. are you as a military person completely comfortable that the budget cuts proposed by the obama administration will leave the united states' military with all the capacities it needs to defend its interests, its values, its global role? >> any strategy and any budget that supports any strategy has risks. i think the risks to our strategy and the risk that this budget may not deliver what we intend are manageable. so i am confident that our -- the revised strategy, the process we went through that did precede the budget and the budget that supports it, i am

confident it will protect our national interests and allow us to provide options to the nation when, by the way, we confront things that we didn't predict. >> "the new york times" had a report on the fact that the united states is going to build up its special forces. sort of things like the navy s.e.a.l.s, commando forces as it were, and that this is going to become a core part of u.s. military capacity. is that the way of the future? >> let me state it a little differently. i think that among the lessons of the last ten years of war, two capabilities are prominent, and we have to better understand ho to utilize them. one is special operating forces which have quadrupled in size and which will grow by about another 3,000 or so in this budget just submitted. and the other one is cyber. special forces have clearly demonstrated their capability. i think it's a matter of integrated all three of these,

you know, the conventional, the cyb cyber, and the special forces in ways we haven't thought of before, and i think we're going to be fine. >> do you worry about the moral/ethical dilemma of sending a drone into some country that we are not technically at war with and eliminating some foreigner? >> i will tell you, i'm very confident that we have the legal basis for those activities in which we're engaged, and i think it's a healthy thing to actually continue to assess the ethical basis, and to this point in time i'm quite comfortable with where we are, but it bears scrutiny as we go forward. >> you're an army general who's been recently elevated into this job. what's the biggest difference in doing this job than your previous long, distinguished career in the army? >> well, the pace is certainly different. i guess it's safe to say that by the time issues come to me,

there's no easy issues to deal with. they're all rather complex problems. so the pace is different. i think, you know, the responsibility, i mean, it does weigh on me that it's not only the roughly 2.2 million men and women in uniform, but their families, and also the nation's security. you know, and i'm not talking about security today. i'm talking about not only prevailing in our current conflicts and challenges, but also preparing the force and the nas f nation for the future. so i think it's some combination of pace and level of responsibility, but i'm honored to do it. >> in this job you're part soldier, part diplomat, and in the diplomat role, i'm wondering whether you're going to use what has now become at least on youtube a famous singing voice. ♪ start spreading the news ♪ i'm leaving today >> are you going to try and

unleash that with your chinese counterparts one of these days? >> i did actually challenge my chinese counterpart during that visit ever their bands to a sing-off. hasn't taken me up on it yet, but if i thought it would get us in a better place with china, i'd do it. >> general demp at this, pleasure to have you on. >> thank you, sir. lots more ahead of the show. we have a great panel of experts on china. but up next, europe. amidst all of the talk of the eurozone's demise, a quiet bit of magic has actually solved the problem for now. what in the world do i mean? stay with us. tdd# 1-800-345-2550 let's talk about fees. tdd# 1-800-345-2550 there are atm fees. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees.

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imagine a region of the world where stocks have had their best january in nearly 15 years. bank shares are up 20%, the rates at which governments borrow money has fallen sharply. investor sentiment is at its best in months. you think i'm talking about asia, maybe the brick nations. nope. the region is actually struggling europe. what in the world, right? the story is actually quite simple and was pointed out to me by sebastian mallaby of the council on foreign relations. after months of endless hand wringing, unnumerable talk and considerable pain, it seems the eurozone has actually been saved, quietly but effectively.

the savior is this man, mario draghi, the new head of the european central bank, an institution that had been seen as powerless and obscure until now. for much of the last couple years it had taken a backseat amid the crisis around it. you see, its original mandate was almost solely to keep inflation low and stable, but now under draghi, it has become europe's savior. they did the equivalent of printing nearly 500 billion euros worth of cash opinion essentially the central bank lent money to more than 500 european banks at just 1% interest. what was the effect? look at this chart. it show was we call bond yields, the rate of interest governments way to raise money from bonds. both italy and spain's rates have fallen sharply in the last three months so they pay less to borrow money. that means they can get their financial houses in order without as much pain.

at a more microlevel, barclay's estimates that a cheap source of cash from within the ecb will boost the earnings of eurozone banks by 4% this year. that is going to trickle into the rest of the economy, but most importantly it means that a run on europe's banks, the great fear, is now highly unlikely. remember that moment in "it's a wonderful life" when everyone runs to the bank to get their money out and bailey's savings and loan just doesn't have enough cash as didn't most banks during the great depression. >> just remember that this thing isn't as black as it appears. >> thanks to the ecb europe's banks now have access to plenty of cash. thee cb is now said to be preparing another auction worth $1 trillion this month. you can expect that to further declog the financial system. the magic of its work is in the per sengs of what it does. it doesn't want to directly bail out any one country, that sets a

dangerous precedent, and yet by demonstrating its ability to inject liquidity into the system, it has convinced investors that it is the ultimate lender of last resort. now, this does not fix europe's longer term or medium-term problems. greece might well still have to defalul default, but there's unlikely to be a lehman-like crisis in europe. the irony is the activism is not some new theory of what a central bank can do. here in america the federal reserve did exactly that four years ago. the story goes congressman barney frank asked the fed chairman ben bernanke if he had $80 billion to help bail out aig. bernanke replied, well, we have $800 billion. for all the criticism heaped on our central bank here in america by the tea party and others, it is instructive to look back and see how the fed's prompt and massive action prevented our

crisis from turning into a great depression. and it's happening once again in europe and in an even trickier situation. the moral of the story, don't bet against a central bank and we'll be right back. up next, the man expected to become china's next leader vi t visits washington. we have a smart panel to examine relations between the world's two biggest economies. okay, team! after age 40, we can start losing muscle -- 8% every 10 years. wow. wow. but you can help fight muscle loss with exercise and ensure muscle health. i've got revigor. what's revigor?

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i'm candy crowley in washington. farid za cara gps will be back in 90 seconds. first, a check of the top stories. at least 15 people were killed and 21 others injured in a suicide bombing outside a police academy in baghdad. this comes as iraq struggles with a political crisis raising fierce to the return of a level of violence that nearly tore the country apart in 2005 and 2006. finance ministers in the european union appear set to approve a bailout package for greece. the deal is expected to be finalized tomorrow after more negotiations. the agreement would make paying down greece's crippling debt the number one priority. a manhunt is under way in greece for two suspects who broke into the country's archaeological museum of olympia, tied up a guard, and stole dozens of small statues.

according to greece's state media, the robbers took as many as 69 statues and a gold ring. it is the second theft of its kind in greece this year. parts of the southern u.s. are bracing for severe weather. rain and possible tornadoes are expected in southern georgia and northern florida. portions of appalachia could get snow. those are your top stories. "reliable sources" is at the top of the hour, but now back to "fareed zakaria gp s." this past week the man expected to be china's next president paid a visit to the white house. no meeting of leader is as important. two biggest defense spenders, the two most powerful leaders in the world. i am joined now by an expert panel. gordon chang is a forbes columnist. james fallow is a former

speechwriter for james carter. he has a new book on china coming out this may, "china airborne." and roderick is a professor at harvard university. he's written more than a dozen books on china. jim, you were at the lunch for xi jinping. people who meet him say that he strikes you immediately as a different kind of chinese leader. warmer, more personable. did you feel that way? >> it's hard to judge, of course, seeing a person in a ceremonial event like that, but certainly i have seen hu jintao in a similar setting and hu jintao seemed a more stsholid expressionless character. what was striking is that just before he spoke, vice president biden gave what was a very, very tough toast by the standards of these kind of events talking about currency valuation, human rights, and all the rest. so that made for a different sort of diplomatic encounter than normal.

>> people who were there tell me it seemed almost rude what biden did in the context of a ceremonial state occasion. one of the observers said we seemed like the yahoos and they seemed like the sophisticated war power kind of -- >> it certainly was startling to me. we've all seen events like this before, and usually there's a kind of quality in the greetings. our two nations are celebrating their 40th anniversary together. and he said all those things and he said turning now to our areas of disagreement and went through a tough laundry list. one doesn't know whether this was purely for domestic u.s. consumption or it was what they've been saying earlier in the meeting in the white house. >> when you look at xi jinping, you have studied china's leaders, does he strike you and does this new generation strike you, is there anything important or different about these guys? they're coming to power after 30 years of peace and prosperity. >> hu jintao, you mentioned, the current president has always seemed to any rather opaque in

terms of personality. xi jinping and some of his cohorts i think are more translucent. i think the point about xi jinping and one or two others like him is they are the children of high officials of the maoist era. they have a certain self-confidence, a feeling they're born to do this, and hopefully that will give them more flexibility when they actually take power. we'll have to see. >> how does this leadership strike you, this new leadership in china? >> i think the problem now is that the communist party is splintering, and we've seen dramatic evidence of this in the last couple weeks. so i'm not so sure it really mat whose the leaders are. you know, when you're the leader of the communist party of china, you act under a certain institutional constraints which are very important, and right now the hardliners are in control in china, and that means that xi jinping, whether he's a liberal, a democratic, or a hardliner, has got to act with the prevailing views in beijing

and that's really the most important thing. >> how is the communist party changing? let's just start with this fascinating thing that seems to have happened last week. which is the party secretary in chongqing, very popular guy, had been cracking down on crime, had got into a spat with the chief of police who then went to the u.s. consulate, asked for asylum, was turned down. what is going on? >> we'd love to know. what happened is that essentially we had the top cop go to another province and try to defect to the united states probably with documents, maybe with documents relating to bo's wife. this is really fascinating. and what is even more interesting is that bo sends security troops who are armed across provincial arms. he invades another province, shesh wan, in order to try to get this top cop back. we talked about our politics being corrosive and

dysfunction dysfunctional. we can't light a candle to china's in terms of what's really going on there. this probably will be controllable, but we don't know because this is the first transition in the history of the people's republic that has not been masterminded by ping. that means there's no real elder behind all of this to keep the kids in line. >> i'd make a point opinion i agree the communist party is in considerable turmoil and that its nature matters more than the individual. there's one thing xi jinping said at the lunch that i thought was different from his predecessors. he talk at length about his own personal experience in iowa. the couple days he spent in the 1980s seemed to have made a huge impression on him. i was impressed how much it mattered that rising generations of chinese financial and increasingly governmental people had had experience here. it doesn't change the nature of the communist state, but it's very different from hu jintao and wen jiabao. >> when we come back, we're going it talk more about china

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welcome back. we're discussing china with gordon chang, james fallows and

roderick mcfarqua. you wrote a book called "the coming collapse of china." they say never make predictions with a specific date. you had a specific date. you said it was going to happen in 2011. then you doubled down and said it was going to happen in 2012. why were you wrong? >> i think there were a couple reasons. i focused in on their ascension to the foreign trade organization. i thought they were going to be tougher on compliance and they weren't because this they saw the opportunities in the china market and so they allowed china really to continue with some very predatory trade practices. >> what is the fundamental weakness you saw in china that led you to this and do you think it still exists? >> well, i think the fundamental weakness is that the communist party has lost the conversation in china. it can no longer persuade people and that's why it's become much more repressive over the last three or four years, maybe even over the last seven, because i think most chinese people don't

believe that a one-party system is really appropriate for a modernizing society. and that's why we've seen increasing number of protests, perhaps as many as 300,000 a year, and we've seen the protests become more violent. so it's no longer just strikes or demonstrations. it's become riots, insurrections, bombings. this is a sign ever social disintegration. the communist party can only deal with it with force and really that's not an answer in the long term. >> jim, you lived there for the last -- >> i have been there like four of the last five years basically, and i guess what strikes me as being so important and so fascinating about china is at least to me it is genuinely unknowable what's going to happen there. you see on the one hand it's a 30-year period in which for most chinese people most of life has gotten dramatically better in those 30 years but all the tensions that gordon and roderick has talked about are certainly there. the environment is a disaster. the social and economic inequalities are more extreme than any place else on earth. the corruption is extreme. my impression, i would disagree with gordon that the communist party is entirely lost the narrative.

my sense is that most people feel the system they know is still delivering more than any visible alternative, but you can imagine the things that are wrong in china getting uncontrollably beyond any of the government's ability to cope with or you can imagine them muddling along more or less the same way for another generation. >> i think i would agree though with gordon, jim, because -- about losing the narrative because the communist party above all no one respects it any longer because of it's deep, deep corruption. and hu jintao himself said we can't talk to the people, and the reason is that there is no ideology. no one looks to markixism and leninism anymore. they have no glue that keeps a system together. what keeps the party in power, and this is why i think it's rash perhaps to predict dates, what keeps the party in power is inertia, the most powerful force in politics. >> and just to come back, i

think the communist party in china would have a higher popularity rating than the u.s. congress in the usa. people think on the whole it's delivering. and i think most people this china as of this moment would think on the whole it's moving in the right direction. >> but we're seeing, you know, the last six months that china's economy is faltering after the conditions that created 35 years of virtually uninterrupted growth are ending. we're seeing capital flight at the rate of maybe $50 billion a month. and essentially this is a problem because the conditions that are there don't really help the communist party. you know, they're in a super cycle downwards now. >> is there a danger that if there is some faltering and if there is this problem of legitimacy, that they move toward a kind of nationalism and particularly blaming america. i was struck by hu jintao's recent essay in which he basically calls for and then executes a mass censorship of

television shows and all of it is about preventing westernization of china, but this is the communist party that radically embraced westernization by which i mean market economics and things like that. thousand they're worried about it. >> i think much as americans might fear a superbly successful china, they have much, much more to fear from an unsuccessful china. all the things you can imagine happening interpally and from the government at least in the short and medium term would be to our disadvantage. i think nationalism is the main tool of government in disarray any place. i don't think the u.s. should welcome the signs of a fracture in china. >> nationalism of course is a two-edged weapon for the chinese. if take, for instance, japan, which is the favorite whipping boy of the chinese blogosphere, if the chinese reprimand japan, the blogosphere gets whipped up and you the national lists are talking loudly and the government doesn't deliver anything more because it doesn't want to damage trade and

relation was japan too much. the government is under threat from the nationalists. the party has to play nationalism very carefully. >> and really when you have the military in china becoming more independent, starting to execute its own policies, becoming power brokers inside the communist party as we saw, this is a very dangerous trend for all of us. >> and do you think that there's the possibility of greater conflict with the united states? >> oh, there's always the possibility of that because china, for instance, claims the entire south china sea as an internal chinese lake. if there's been any consistent foreign policy in the sumplt for over two centuries it's to defend freedom of navigation. this is a zero sum issue for us. >> i would mark in the last year and a half the u.s. has reasserted its interest in the pacific and this announcement in australia of the marine presence there was part of i thought a very skillful coordinated diplomatic act by the obama administration to say we're still there and the balance of power with china will remain.

>> i think obama came into power thinking that he could deal with the chinese. he would have a new approach to the chinese, and they would actually develop a partnership of some kind across ideological boundaries. he proved wrong. they thought he was weak. they took advantage, and what we've seen over the last year with secretary of state clinton and with biden this last few days is a reassertion of american determination, that it is going to have its allies protected in the south china seas and southeast asia and freedom of navigation is something they will protect. >> and the chinese you think will respect that. >> the chinese don't want a conflict. the last thing they want is a war because then everything is up for grabs. so i don't think they're going to challenge. >> on that note, gordon chang, roderick, james, thank you so much. up next, the last look, how switzerland is taking

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turns out it costs 2.4 cents to make every american penny. if they change the mix of metals used, the cost will go down. that brings me to my question of the week -- how many pennies does the u.s. mint make every year? is it, a, 43 million? b, 430 million. c, 4.3 billion. or d, 43 billion. stay tuned, we'll tell you the correct answer. make sure you go to cnn.com/farcnn.com/fa cnn.com/fareed for ten more questions. you can follow me on facebook and twitter as well. and if you ever miss a show, you can now find full video episodes of "gps" on the itunes tv store. this week's book is "coming apart" by charles murray. it's the hot policy book now. in it murray explains white

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