The major development in US foreign policy, to which we drew attention earlier, is the deepening rift between the US and China.  Over a range of issues – Taiwan, the Dalai Lama, trade, Iran – US officials from President Obama down have taken positions that they know will provoke a negative reaction from Beijing. From our conversations with senior Administration contacts, our assessment is that the Administration is taking this course as part of a deliberate policy to be more assertive of US interests with regard to China. Several factors are involved. Obama’s realization that his re-election prospects rest on an economic revival has prompted a focus on exports. This is turn has focused renewed attention on the value of the RMB. With a consensus now established in Washington that the RMB’s value is too low, consideration is being given to labeling China as a “currency manipulator” in the next report to Congress from Treasury due in April. Treasury officials do tell us, however, that they hope to see a strengthening in the RMB before that date. Beyond trade matters, senior US officials are concerned that, as one State Department planner explained to us, “China is too often on the opposite side of the issue to us.” With Beijing already reacting negatively by sanctioning US firms and canceling military exchanges, further tensions can be expected. Neither side wants these differences to define the relationship, but there is little doubt that the Administration’s current approach is significantly tougher than its initial policy that was highly respectful of Chinese sensibilities.  This tougher attitude is also in evidence over Iran where senior officials are expressing growing impatience. In other areas, the publication of the Pentagon’s Quadrennial Defense Review has prompted further debate about US military strategy. For the immediate future, the focus will remain on counter-insurgency campaigns, as in Afghanistan and, possibly, in Yemen. Pentagon officials are cautiously optimistic that the expanded operations soon to be launched in Afghanistan will deliver a decisive set back to the Taliban and set the stage for political reconciliation.