>> "bbc newsnight" is presented by kcet los angeles. funding for this presentation is made possible by the freeman foundation of new york, stowe, vermont, and honolulu, newman's own foundation, the john d. and katherine t. mcarthur foundation, and union bank. ♪

>> union bank offers unique insight and expertise in a range of industries. what can we do for you? >> we are a nation of explorers. new ways of living, of thinking, and of expressing ourselves. we take risks, we learn from experience, and we keep moving forward. that's why we encourage and celebrate the explorer in all of us. >> and now, "bbc newsnight." >> does the 21st century really belong to china? this week, china has awokened to

challenge the china supremacy. what will happen to the rest of us if china continues to dominate? we'll discuss the new economic powerhouse. the return of terror in northern ireland. we investigate the growing strength of the real i.r.a. >> i personally know of a man who could be described as one of the most prolific assassins thrown up by the 35 years of war, and he has now moved to the real i.r.a. >> and will george bush's attempt to write hustry in the oval office win over his critics? we'll discuss his legacy. >> he's declared war because of weapons of mass destruction. he says here, i had a sickening feeling that there weren't any. that is not good enough. >> hello, the world leaders arrived in seoul. an extraordinary period of diplomatic friction between china and the west.

for the chinese, it may seem like the world is ganging up on them. if it is, it's driven by two things the world doesn't have, recession and democracy. is it possible that the rest of the world might be wrong about china and that the end is in sight for the biggest economic story in the world? to look at the evidence, here is our economic editor paul mason. >> he is china's growth rate adjusted for inflation. its target is 9% growth, but when world trade slumped in early 2009, china's growth collapsed. but then it bounced back, even though the rest of the world did not. and here's why. while china's exports fell, during the crisis, a massive fiscal stimulus boosted demand at home, and that put china at the center of an asian-driven recovery. asian exports to china have risen 40% this year alone. meanwhile, the u.s.a., britain, and japan are locked into weak

recoveries. they need to boost exports. the u.s. elections, there were calls from the unions and the tea party to launch trade sanctions against china. so america proposed this week to cap the trade surplus with the country's exports, more than its inports, of the likes of china at about 4%. and went to india to get them outside. >> india is not the only emerging power in the world. but relationships between our countries is unique. for we are two strong democracies whose constitutions begin with the same words, the same revolutionary words. "we the people." we are two great republics dedicated to the liberty, justice, and equality of all people. we are two free market economies where people have the freedom to pursue ideas and innovation that can change the world. >> china is not in the mood to

be dictated to. china does not want to limit its options. that's the most part of it. exports are stabilize the country and stabilize tom nist party rule. that's also important. they don't want to do a bilateral deal with the united states. they prefer the multi-lateral is. that's another important aspect to it. i also think that there's a big strain inside the chinese system, that if the u.s. asked them to do something, then they will resist it, i think. i don't want to sign on to what they regard as an american agenda. >> here's the problem. to china, the economic pressure feels like part of a general offensive against it. so the u.s. navy holds exercises of korea after north korea torpedos a ship, and britain and the u.s. are saying, hey, you are now our new regional ally.

and then the award of a nobel peace prize to china's most high-profile dissident. and then there was this. a chinese troller rounds a japanese navy patrol boat. the captain was arrested. mass demos took place in china, and after this footage was released, mass demos in japan. china has managed to put itself in the center of a whole new network, exporting telecomes and road building expertise to africa and latin america, in return for access to oil and minerals. offering diplomatic support to west enemies in sue darning zimbabwe and iran. it's not really yet a world power. all it wants to be is a moderately developed country by 2040rk and millitarily, whatever the rhetoric, it would struggle, even no invade nearby taiwan, let alone anywhere else.

>> i think china's domestic struck hur is still an impet meant, because they are playing to the court in china. they have to play to the hard liners in china, just as republicans do to republicans in the u.s. that makes it difficult to embrace very easily all sorts of open relationships, and as you might see it, nuance responses to different countries. i mean, the party's sole aim is to stay in power. the party's main audience is the party itself. that makes it difficult to build, if you like, the kind of soft power that america and even the u.k. has in the world. because they're mainly concerned with keeping power at home. >> there's a mismatch. economically china is already a super power. diplomatically and millitarily, it's decades away, in terms of political ke bait and freedoms, it's one of the least advanced countries in the world 678

>> jeremy packson joined by hedge fund managers, and author of the chinese century. >> how long can this chinese trajectory continue, do you think? >> i believe it can continue and really continue for a long time. this is not to say that no roadblocks, there are no obstacles, that china will not face a resurgence like the rest of us at some point. but all in all, i think that they will continue in a fairly positive trajectory. >> this is a country that's going to carry on, assume greater dominance in the world. the other is that this is a double that's going to pop. what's your view? >> yeah, my view probably is in the middle.

i feel china will continue to grow, but at a slower pace in the next 20, 30 years. the reason why i say so, is because in the past 30 years, china has maintained a high economic growth in the past three decades. and the drive of this growth has been changing over time from agriculture reform, to industrial reform, to export lab growth, to s.d.i. lab growth. and then now, in the recent years has been changing to indigenous innovation. >> what's going to be the big break as far as china is concerned? >> i think it's vulnerable because we are vulnerable.

>> house prices are falling. your credit card is tapped out. so now we find that unemployment is remaining persistently high in, say, the american economy, which is creating the political antagonism between the two trading partners. >> you are chinese. you know all about your country. >> in this instance, it will rise. i don't see a competition, a very strong competition between china and the western world. actually, they are much more complimentary with each other. >> it's in the western middle

countries. the stronger comp tix with low income countries. with china moving up the ladder, now the main competition is between china and the middle income countries, although a few have mentioned elusive jobs. the elusive jobs in the u.k. or the u.s. to china. but actually, the industrial structure between the economists are very complimentary. you can use the service in the economy. >> there are many economic powers that one can serve up, the rule in the 1920's, leading

up to the great depression. economics first can become last. china is very vulnerable, not only to building skyscrapers. there's no one in them, if you will. it's very vulnerable to the u.s. economy, just not picking up, and that would be a drag on the exports. >> so what do those western con tris, which have come to view china, as this great repository of energy and machines. what do they do to protect themselves against that danger? >> this is why you have this ferocious political debate, urging the chinese to have self-confidence in allowing their exchange rate to more accurately reflect a great strength of china. the great mystery is why the chinese do not have that self-confidence to reflect their foreign exchange being marketed. >> just to be clear. any of our viewers here at all concerned about this, what

you're saying is that chinese currency needs to rise in value and chinese exports therefore would have more expenses. is that what you're saying? >> that's a political factor which would help the west -- help preserve jobs in the west. >> what do you think about this, professor? >> i would say be careful what you watch for. i would like to remind everyone of 1985 where our economists promised president reagan at the time that changing the exchange rate is going to solve, you know, all the problems under the sun. that seems to be the case today. there is such widespread belief. there are a couple of by-products that no one seems to be talking about, once the chinese currency strengthens. for example, foreign target, that is u.s.a., u.s. companies will become cheaper for the chinese.

you will see a much accelerated pace of foreign acquisition. then you'll start hearing the cries that the chinese are taking over. another very important by-product is that foreign talent will become cheaper, and foreign talent is in great demand right now in china and it's going to help. >> terrorists in northern ireland are back with a vengeance. "newsnight" is the site of a new report called the return of the militants, which claims that dissident groups, including a new faction of the i.r.a., will not be negotiated into abandoning their current campaign. the reports for the study of radicalization and political violence at kings college london also claim that security services baring the brunt were caught off guard by the strength of the resurgence of republican violence. here's liz mckeon. >> i am not asking anyone to surrender. i am asking everyone to declare

the victory of peace. >> tony blair talked of an unstoppable path to peace. for growing numbers of irish republicans, it's not turning out that way. >> in the last two years, there has been a surge in atax. more bombings, more shootings, more riots. the people behind them are called dissidents, it's a term they can't stand. because they see themselves as true republicans, with a responsibility to drive the british out of here by force. >> this man spent over 40 years trying to do just that for the peace process. we agreed to film him anonymously. he says that more of his old comrades are moving over to the dissident groups. >> there are lots of people crossing over. i personally know of a man who could be described as one of the

most prolific assassins thrown up by the 35 years of war. he has now left the organization that he belonged to, having been part of the peace process. and he has seen nothing change, and he has now moved to the rails, i understand. to the real i.r.a. >> the drift of older republicans is confirmed in a new study seen by "newsnight." the return of the militants says far from dissipating, they're growing in strength. and there's little prospect that the phenomenon of militant irish republicanism will be disappearing any time soon. >> i think we're seeing the coming together of two distinct generations in the republican world. at the one level, they performed as foot soldiers of that movement, it helps explain why their lives are not what they hoped they would be. either traditional republican

narratives. giving them that narrative is a band of 40-somethings, former provisionals who have left the movement, disillusioned with the political trajectory and the leadership provided to that movement by jerry adams and walter mcginnis. >> last month, a powerful car bomb caused extensive damage in the heart of derry. it had been parked outside the oulser bank. the bomb was planted by the real i.r.a., one of the main terrorist groups responsible for the murders of two off-duty soldiers last year. on commercial targets, like the bank. gary donnelly has been accused of the real i.r.a. he insists he doesn't speak for them either, but he does understand their motives. >> i think that these groups are going to do this. i won't condemn them.

>> do you support them? >> do i september them? i won't -- do i support them? i won't condemn them. i think irish people taking up arms against the british occupation is 100% justified. it may not be nice, but however, i believe that it's totally and absolutely justified. >> as well as the real i.r.a.'s, a continuity i.r.a. is still active and dangerous. but the biggest threat comes from a new fraction of the real i.r.a., called volunteers of ireland. they put their combined attacks since the start of the year at 110. that's a tally of all terrorist incidents, not just those directed at police. >> these aren't just young men feeling their way like we had to in 1969. they can rely on a breadth of experience. there's people coming in all the time, and they bring with them a

wealth of experience. >> some of that experience was on display this summer when serious rioting broke out in the nationalist area of belfast, in protest of protestant marches. even that pillar jerry kelly seemed powerless to make it stop. >> what happened here shows how the tradition means a tight grip on its community has weakened. in elections, people tend to vote tribally. but day-to-day, there's been a drift away from the party. martin is one of those who left. >> the support has dropped considerably. because of the lack of movement

towards the island. there's promises made. those promises haven't been delivered. >> ian is the more striking given his family history. his father was an i.r.a. prisoner who stayed loyal during the peace process. his former brothers in arms carried his coffin at his funeral three years ago. but his son believes they've sold republicans short. >> you don't support arms struggle anymore? >> no. >> this is a very small corner of the world. everybody knows everybody. do you try and persuade those people who are still using weapons that they should stop? >> we have to have something to persuade them.

so there's nothing tangible there to grasp, to old on to. -- hold on to. >> but violence has never worked, to get the british out of northern ireland. >> i am a former i.r.a. i am a former prisoner. >> so what do you think when you see people still taking up arms. >> well, i won't criticize them at all. >> the task facing security forces was apparent when the real i.r.a. set off a car bomb in belfast, home of the new mi5 headquarters. the target was significant, not least because mi5 is running intelligence gathering in northern ireland. there have been some successes,

arrests and close cooperation with police in the south. even sew, the range and scale of attacks, like this one, mean the security response is under scrutiny. >> the return of the militants raises the thorny prospect of negotiations, but argues it's unlikely that the modern day dissidents can be persuaded to accept current political realities. >> i think at the current time, the only conceivable response is a security-based one based on good police work, good intelligence work. i think a political process that can draw in the dissidents is highly unlikely at this time, and it may just be that one has to accept these groups. although going to be there for some time to come, yeah. >> i think a culture has grown up over the last few years in the u.k., that we can have a world that's free from terrific. perhaps more so than ireland. i think people understand that there are always going to be

people in our society here who are going to try and use violence for political ends. we know they're there and we have to cope with them what. we want to be assured as a community is that there are active ways to deal with it within the law. >> there was trouble a few weeks ago. a gunman was seen on the streets. a worrying sign that loyalist groups are stirring. it's just the threat to normal life that dissidents are said to be trying to create. and that politicians keep insisting belongs to the past. >> liz mckeon. george w. bush left office as the most unpopular president since ratings began. his own account of his presidency was released this week. it's called "decision points," and it's his attempt to justify the controversial practices, the wars, and the alleged indecisions of his time in the white house. to discuss the book, jeremy

packson is joined by colleen, who had the challenge of selling the former president's foreign policy to the world. first, here's a brief look at the bush reign. >> it was a highly controversial incident-packed presidency with the attacks of september 11 and the decisions to take america to war in both afghanistan and iraq. >> we will smoke them out of their holes. we will get them running. and we'll bring them to justice. >> of the non-existence nuclear biological and chemical weapons used as a pretext for invading iraq, he writes, "no one was more sickened or angry than i was when we didn't find weapons of mass destruction." mr. bush has no shame in admitting he personally authorized so called waterboarding, considered torture in this country, to interrogate terror suspects. there might have been further wars. mr. bush ordered the pentagon to

plan an attack on iran's nuclear facilities. i directed the pentagon to study what will be necessary for a strike. military action would always be on the table. but it would be my last resort. bush also acknowledges he took too long to make decisions over the disaster that parolized new orleans after hurricane katrina. how will history judge the term of this most controversial president? >> he seems aware throughout this book that he's not well-regarded. >> yeah, sure. >> and that's why he's written it. he's trying to get his version out there. history will judge whether this is the version that will eventually be the authorized version or something else. but he's very, very conscious in this book of the fact that he's not a well-liked man in many other places. >> sure. >> were you aware of that when you worked for him? >> i think any republican who is elected to president of the united states starts with a

negative of 15 at least in europe. so that's taken as a given. the stereotypes about bush, just your crack about he doesn't travel. we see from this, he led a delegation to gambia in 1990. i remember when he was running for president, that he'd never run a book, he was stupid, he had never had a passport, none of which were true, but that was the perception. no campaign is going to expend the energy to try and change the view of someone who is a candidate. >> this is off the point, but why do europeans have that prejudice about republicans, in your view? >> because i think that they are calibrated left of center, so i saw the same thing with reagan. i was a student here, and reagan was immediately dismissed. >> the american center of gravity is to the right of the europeans center of gravity. even there, a rival with britain would find comicals with the democrat more than the republican. >> do you think he is -- do you think what will become the received wisdom -- >> it will be something those against bush. it's not going to change their

mind. but it is interesting to see some of the decision-making that went behind some of these things. frankly, i think there's a lot more that he could put in there. i think a signature event was the indian-american civil nuclear pact. the reason why obama is in india today is because of the ground work that bush led on that. >> all of these things will be significant. it's absolutely incidental. he declared war. he says here, "i have a sickening feeling that there weren't any." that is not good enough to invade a country. >> but i still think he thought it was the right thing to do. he had reasons for saying that. >> it's because i believed it was right, it was therefore right. it isn't a good defense. are >> if we have a democratic and free iraq and a democratic and free afghanistan, you will see the changes that take place in the middle east that would not have been capable of happening before that. >> huge hits and -- >> purple fingers voting -- >> that's a very, very narrow thing to say. >> that's all for this week from

all of us. goodbye. >> funding for this presentation is made possible by the freeman foundation of new york, stowe, vermont, and honolulu, newman's own foundation, the john d. and katherine t. mcarthur foundation, and union bank. ♪ >> union bank has put etc. financial strength to work for a wide range of companies, from small businesses, to major corporations. what can we do for you? >> "bbc newsnight" was presented by kcet los angeles.