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Chinese Handover of Power; Israel-US Relations

Aired November 8, 2012 - 15:00:00   ET


CHRISTIANE AMANPOUR, CNN HOST: Good evening, everyone, and welcome to the program. I'm Christiane Amanpour. In one week, the world's two top powers chart their future courses. Two days ago, of course, the United States reelected President Barack Obama and today China starts the elaborate process of appointing its new leader.

The world's most populous country and its second largest economy began its transfer of power this morning in Beijing when the 18th national congress opened.

China's political system may be secretive, but one thing seems to have been clear for months, that Vice President Xi Jinping will become the new leader. And so get used to this face, because according to Chinese tradition, he will be there for the next 10 years.

So what kind of president will Xi be? Peeking behind the bamboo curtain, here's some of what we do know. He is the son of a Mao-era revolutionary, making him a so-called princeling. Xi has made nearly 20 foreign trips, including three to the United States, giving him a much better sense of America than his predecessors had. In fact, Xi's daughter is a student at Harvard University.

He has a reputation for being tough on corruption, and that's important because Hu Jintao's, China's outgoing president, warned today that is the very thing that could cause the collapse of the state.


HU JINTAO, CHINESE PRESIDENT (through translator): Combating corruption and promoting political integrity, which is a major political issue of great concern to the people, is a clear-cut and long-term political commitment of the party. If we fail to handle this issue well, it could prove fatal to the party and even cause the collapse of the party and the fall of the state.


AMANPOUR: That farewell warning was an unusually dire public airing of people's frustration, and that is growing.


AMANPOUR (voice-over): Political demonstrations in China are rapidly increasing. They are becoming more common. "Time" magazine reports an estimated 180,000 incidents of so-called social disturbances in 2010, and the numbers have only gone up since then.


AMANPOUR: Indeed, a secret report to Chinese officials warns that if social issues are not properly addressed, the worst-case scenario, as we've reported, could be revolution. In a moment, I'll get an inside look from a Chinese scholar who studies that country's leadership.

But first, the other stories we're covering tonight.



AMANPOUR (voice-over): The Israeli prime minister backed the wrong horse in the U.S. presidential sweepstakes. Now he's scrambling to make up.

BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL: I want to congratulations President Obama on his reelection.

AMANPOUR (voice-over): And a faceoff between Netanyahu and his own military, insubordination over Iran? And the journalist who broke the story.


NETANYAHU: (Speaking Hebrew.)

AMANPOUR (voice-over): Then in the West, China is often seen as scary, but there is a cuddly face -- "panda-monium" behind the Great Wall.


AMANPOUR: All of that a little later, but first, to China. So will there be more political freedom and reform in its future? I'm joined by Cheng Li, the senior fellow at the Brookings Institution, director also of the national committee on U.S.-China relations. He grew up in Shanghai during the Cultural Revolution before coming here to the United States.

Welcome to the program, Mr. Li.

So you heard that very unusual dire warning from Hu Jintao. How surprised were you by what he focused on today?

CHENG LI, BROOKINGS INSTITUTION: Well, I'm not surprised, but encouraged by this statement. The people in China talk about the revolution, talk about corruption, talk about congress party lost its legitimacy in the wake of Bo Xilai case and widely spread corruption.

But this is first time of the top leadership make a commitment, make a very clear statement that unrest, the party reform sale (ph). Otherwise, we'll be kicked out of history.

AMANPOUR: That's quite dramatic, to be kicked out of history.

LI: Absolutely.

AMANPOUR: So then what do we expect from Xi Jinping? What kind of a president will he be? Will he attack corruption?

LI: Well, first of all, this is the report that is made by Hu Jintao, certainly that there's based on a consensus. But let's pave the way for Xi Jinping really provide (inaudible) for him. Now he --


AMANPOUR: It means taking on this huge vested interest.

LI: Absolutely. Now what it means by political reform, basically, when you're studying to party democracy, to introduce a mechanism for election, even for the very high level of leadership, even the standing committee or politburo, not the five years of kicking it down the road, but the very soon, maybe even the 18th party congress.

Second, it's made clear statement, the party should be under law rather than above law, which has been always the case in the patriotic history. So they should have a real mechanism to deal with corruption, let the public to know that it's not hopeless. And finally, gradually should open Chinese media.

So it's an enormous task. It's very risky. You can't imagine some (inaudible) leaders really very nervous.

AMANPOUR: Well, talk about the media, particularly the social media in a moment. But first let's focus on this democracy. Hu Jintao mentioned it many times. I don't know whether he was meaning precisely this, and that is pictures we've got of the U.S. embassy having organized an election party when the U.S. was doing the election on Tuesday.

And you know, this is a mock election, but Chinese staff members and invited guests were invited to cast their ballot. And so many of them told the U.S. staff there that, boy, do they wish they could do that for real. So it's not just about reforming the party, but it's allowing people to be able to cast a vote. Is that Dreamovision? Is that something that might happen?

LI: Well, this will probably come much later, because in China, you do not have opposition party. But you do know that the Chinese Communist Party itself, although it's a one-party state, but the party has factions that compete each other. This is Chinese-style checks and balances.

You see the Hu Jintao faction; you see Deng Xiaoping's faction, (inaudible) from the region, a representative from the socioeconomic groups. Now this is still (inaudible) of transparency, but the architectural driver in Beijing (inaudible) which leader from which faction. So that's the beginning.

AMANPOUR: But those are the leaders. And I agree; you say that's the beginning. But the beginning is catching up. I mean, really, all these protests that are going on. You mentioned media; the social media is really active there. We just had huge protests in the streets in Szechuan against a big copper smelter.

LI: That's right.

AMANPOUR: So what can Xi do to keep up? Or were they going to continue the status quo of sort of, you know, economic liberty and political restriction?

LI: Well, you cannot have economic liberty in the political control, because China's economy is out under (inaudible) condition from export-led economy, a cheap labor intensive to innovation driven economy, innovation required political openness, required serious control of the state of monopoly, which is the case related with corruption, related with power abuse.

So unless you deal with that political problem, China's economy will also slow down. It's already slowed down.

AMANPOUR: Do you have, obviously, a lot of optimism. Let me quickly pivot as the U.S. has to the Pacific.

What will China's relationship be with the United States? And if there's more internal turmoil, how will that affect its relations externally?

LI: That's a very good question. I think someone would argue that the leadership may distract the domestic attention with the foreign conflict. So based on China's modern history, this is a dangerous game. (Inaudible) xenophobic sentiment that you mentioned. They will become anti-government.

Then, of course, the real collapse will begin. So these leaders understand that. They try to avoid it. They mean they talk, you know, talk but act carefully. But sometimes it's beyond your control, particularly in East China Sea and South China Sea. It's really a very important issue of sovereignty.

AMANPOUR: Finally, are you hopeful for a reformed China?

LI: I'm hopeful. I think that, just like what happened 20 years ago, China -- Chinese Communist Party impressed a mock reform. But this time, we shall give China, Chinese Communist Party a chance. They may give us a pleasant surprise by impressing Chinese-style democracy.

AMANPOUR: We'll be watching. Cheng Li, thank you very much indeed.

LI: Thank you.

AMANPOUR: And the presidential candidates here in the United States did use China as a political football in their campaigns, but China's leadership stayed on the sidelines. Not so in Israel. We will as a member of the Israeli government if Prime Minister Netanyahu can recover his own fumble.

Before we take a break, another insight into China's new leader by looking at his wife, Peng Liyuan holds a master's degree in music as well as the rank of major in the People's Liberation Army. A national celebrity, she is also one of China' most popular singers and can she hold a note!






AMANPOUR: Welcome back to the program. You just heard the immense challenges that the Chinese leadership faces. Well, so, too, does the United States and its foreign policy.

Amongst them, Iran -- how does it plan to stop Iran from gaining a nuclear weapon and how does the relationship with Israel play out? Israel's prime minister, Benjamin Netanyahu, has had a fraught relationship with the U.S. president, Barack Obama, over Iran and over peace with the Palestinians.

It's no secret that Prime Minister Netanyahu, who has known Mitt Romney for a long time, really wished that he had won. But he didn't. And now Israel is concerned that their leader backed the wrong horse and it might be payback time, as one Israeli headline put it, "Bibi Gambled; We Will Pay."

So joining me to discuss all this is Danny Ayalon, Israel's deputy foreign minister and a former ambassador to the United States.

Mr. Ayalon, thank you very much for joining me from Jerusalem. So first off, you can't be that thrilled with all the headlines --


AMANPOUR: Thank you. You can't be that thrilled with all the headlines in the papers today, saying that your prime minister took the wrong political gamble.

AYALON: You know, we are our worst critics here in Israel. I respect very much Israeli media and papers, even though not all the time they're correct, and many times they're sensational, which is fine. But let me tell you, I think we should set the record straight.

It is true, Christiane, that there was a special kinship between Prime Minister Netanyahu and Mr. Romney, based on the fact that both of them were graduates of MIT, working together later in the same McKinsey consulting firm, but from this, to say that there was a preference, it's a little bit of a stretch. Israel cannot afford to be meddling or involved in U.S. policies.

Now, I know very much how acrimonious this campaign was. We were dragged into it by campaigns, not by our own design. And --

AMANPOUR: OK, Mr. Ayalon, you're --

AYALON: -- (inaudible) for me to tell here that --

AMANPOUR: You're mounting a spirited defense and I would expect nothing less, but of course, your own population sees it differently. So the real question is, going forward, what kind a relationship on particular issues -- Iran -- has the temperature in Israel now, in the prime minister's office, dropped over a military confrontation with Iran? Or will we see that rise again?

AYALON: Let me tell you, first of all, you know, Israel and the United States are natural allies, based not only on shared values, common threats that we have, but also on the very sense of the core similar identifies and outlook of the future, investing of the two nations.

Well, on Iran, we also share almost identically the same outlook with the United States, and we very much trust the leadership of the United States, the leadership of President Obama and I went on record, just two months, actually in September, in New York, with a conference of major Jewish organizations, to say -- and I am on record -- that we have no better friend than President Obama.

Actually a year ago, with my good friend -- which I'm sure you know, Congresswoman Debbie Wasserman Schultz, I said the same thing. We have no better friend than President Obama.

And we know that we will continue the consultations because we cannot afford not to work together, because the issues are too big and too immense, and a threat, not just to Israel or to the region, to major American allies in the region, but also to the very basic interests of the United States in Europe. Nobody can afford a nuclear Iran. The question is how we go about stopping it.

AMANPOUR: All right.

AYALON: And I have a full confidence knowing not only the president's commitment but also his team. And there is, in a way, there -- I see an advantage by the continuity of the administration, being very seasoned, knowing very well that Iran file and portfolio to continue and make sure that Iran will not become nuclear.

AMANPOUR: If I'm not mistaken, then, that is a ringing endorsement of the Obama administration's policy towards Iran.

So let me ask you this. Ilana Dayan --

AYALON: Well, absolute --

AMANPOUR: OK, sorry; go ahead -- answer?

AYALON: Yes, well, absolutely. And, well, we're not going to hide anything behind the table. I know we are great allies and friends, even among the best friends there are sometimes difference of views. And let me tell you -- and I can understand it.

You know, the view from, let's say, Kansas City, or the view from Tel Aviv, about the threats from Iran is different by nature of the proximity. But at the end of the day, we will continue and work together. Yes, there were differences about some timelines, about what is exactly the goal, whether to prevent Iran acquiring nuclear capabilities or actually having the bomb itself.

But I think today we can safely say that we are very much on the same page and will continue to follow the lead of the United States.

By the way, what the United States has done under the leadership of Obama is something that we would have dreamed about a year ago, actually amassing a great pressure in a concerted effort where the entire international community now is coming hard on Iran with the sanctions, not only the United States, but also most of the like-minded countries including Europe and Iran is hurting now.

And for the first time, paying a price. So the dilemma now is of the ayatollah's, whether to continue and breach international law and all the agreements, or space the consequences. And I have full trust that together internationally we will be able to stop Iran.

AMANPOUR: Do you have to rely on this diplomacy, given that, according to Ilana Dayan, your very well-known journalist, who I'm going to talk to in just a moment, the military brass and the head of the Israeli intelligence simply refused to follow the prime minister's order and prepare for a military attack. How can a democracy afford that kind of dysfunction?

AYALON: Well, it cannot, and I'm not sure exactly -- I am not really sure exactly what happened. And you will ask Ilana and I'm sure she would give you full answers. But let me tell you one thing, just like the United States, Israel is a democracy.

And we -- although we have very opinionated high brass, which should be the case; we're very proud that they can very freely actually give their opinions and reservations or recommendations or what have you.

But at the end of the day, it's the commander in chief, in the case of the president; or in case of Israel, it's the Cabinet, to make the decisions. But the very fact that nothing happened means that the commander in chief in Israel did not give the order. Now when we are forward-looking, you know, I don't know exactly what happened in 2010. Ilana will tell you.

But forward-looking, I very much believe that -- and as far as I can understand, the American policy is to continue the very strong pressure on Iran. Now we have to remember, Iran is a very vulnerable country, socially, politically, economically. For the first time, they are on a brink of a very, very precipitous abyss.

So I believe, just like they -- when they were faced with a dilemma and a credible threat, they suspended enrichment, like in 2003. When they made a threat against the United States to block the Hormuz Straits or to act against American Navy ships, and they were given a strong message, they backed down.


AYALON: I believe at the end of the day, they will back down if we are, together, showing determination.

AMANPOUR: Danny Ayalon, thank you very much indeed. Israel's deputy foreign minister. Thank you for being with me.

And now, for more on that sensational story that's rocking Israel, Ilana Dayan is one of Israel's leading journalists, as I just said. She's the anchor of the investigative news program, "Uvda," which is Hebrew for "fact."

She's the reporter who broke the story that we were just talking about, the story that apparently two years ago, Israeli Prime Minister Benjamin Netanyahu ordered his military to prepare for attack on Iran's nuclear facilities.

Dayan's story documents how the army chief and the head of Mossad, the Israeli intelligence, both refused to comply. And she's just shortly about to join me as she's getting into the chair.

But as we wait for her, let me just say that: "The Iranian government has responded to that very program, saying in a letter to the Security Council, the Islamic Republic of Iran expresses its strong protest and condemnation of such a provocative, unwarranted and irresponsible statement by the Israeli regime's prime minister.

I wish to reiterate that the Islamic Republic of Iran has never had any intention of any attack on any other nation."

Ilana, thank you so much for joining me. You've heard the whole premise; you heard what your deputy foreign minister has responded about this. He wouldn't confirm or deny. He said that there was no order from the prime minister.

Do you believe that the prime minister had ordered a strike, or do you believe that this was part of the preparations and the psychological pressure to ratchet the pressure up on Iran?

ILANA DAYAN, UVDA ANCHOR: I'll tell you the facts as I know them from many, many talks that I had, also from people who were in the room, this specific, dramatic meeting of the G-7, the seven city ministers of our government.

It happened in the course of 2010 and all of a sudden, just when they are at the door, the chief of staff, then Gabi Ashkenazi, and the head of Mossad, Meir Dagan, are given an order by the Prime Minister Netanyahu to step into a pre-attack alert and be ready to strike in Iran. This is what happened.

This is as close, I believe, as Israel has ever gotten to a strike in Iran and more importantly than that, this was, I guess, the most dramatic rift between the military establishment and the political establishment in which you find really a fascinating dispute between these two sides, when you have on the one side Prime Minister Netanyahu with a deep conviction, very coherent world view in this respect; you have Ehud Barak, who is a, you know, Mr. Security.

And on the other hand, you have the chief of staff and the head of Mossad who very courageously set off the alarms and say, guys, this is not the right thing to do now. And if we step into this pre-attack alert, this is noisy; this can lock us into war.

AMANPOUR: You just heard your deputy foreign minister be very conciliatory -- or maybe you didn't hear him. Did you hear Danny Ayalon talking about following the U.S. policy and believing that the U.S. and Israel were together on this policy of Iran?

DAYAN: I may have lost you --


It looks like I may have lost Ilana Dayan.

DAYAN: We are trying to do -- yes.

AMANPOUR: You can hear me?

DAYAN: I'm fine now.


AMANPOUR: OK. Let's continue. This is live television, now why the heck not?

So do you believe that the temperature for a military strike against Iran has gone up or down in Israel, especially since the U.S. election of Barack Obama and not Mitt Romney?

DAYAN: It's interesting; I was listening to Deputy Minister Ayalon just a couple of minutes ago, and it was interesting, the way he put it. He said Obama has done for us much more than we could ever expect. He said that he thinks Israel and the U.S. are now on the same page, not only in terms of the intelligence understanding of what's happening, but in terms of what should be done.

That was not the case of the interview I had with Prime Minister Netanyahu, just last Friday, in which he very, very strongly said if the U.S. doesn't do it, we'll have to do it ourselves. This is Netanyahu's agenda and the interesting thing that we are about to be seeing now is what happens with the just newly-reelected President Obama.

And in my view, you know, the most important -- really the most important thing is whether these two guys, these two gentlemen will be able to create this strategic intimacy, as someone put it to me, that can really be the only way to create innovative options and who are both dangerous ones.

AMANPOUR: So you've also said that, look, this discussion continues. You understand where Prime Minister Netanyahu is coming from. You also understand where the opposition, those who don't agree with this kind of strategic direction towards Iran. So are we likely to see this conversation continue in Israel?

DAYAN: No doubt about it. I mean, we have this postponed deadline until the spring of 2013. But again as far as Netanyahu is concerned, this -- neither this prime minister came to the table with a very coherent, a very well-established -- I have to tell you, very, very respected world view, a historic conviction that he should get rid of the Iran nuclear threat.

When you hear Mr. Netanyahu, you understand that it is something which is really very deeply embedded in his psyche, in his world view. And on the other hand, when you speak about opposition, it's not only the brass that really, you know, unexpected and unprecedentedly holds its horses back. It's also the intellectuals.

You have writer David Grossman, the brilliant writer, Israeli writer, perhaps one of the most famous ones, writing an article a couple of months ago in the arts newspaper, in which -- in which he said something that I think is very interesting and very important to bring into account when you think about this Israeli dilemma, the bomb or the bombing?

And he said that we might be locked into our most ancient Jewish fears of annihilation, of destruction, of death, of murder, of somebody wanting for -- wanting for thousands of years to wipe us from the face of the Earth. And he was trying to claim that Netanyahu is playing upon those fears and he's really touching upon those fears.

Netanyahu, on the other hand, will tell you these are true and genuine fears, Iran is running for the bomb. It has already almost 200 kg of 20 percent enriched uranium. We might not know when they run for the last presplit (ph).

So it's an interesting dilemma; it's an important dilemma. And the way I see it as a journalist, it's a fascinating dilemma because you have - - you have an unprecedented vision of the players, of the characters on the field.

AMANPOUR: Ilana Dayan, it was a great program and it's always fascinating to talk to you. Thank you very much for being here.

And we will be back right after a break.



AMANPOUR: That story of the cuddly face from China, tune in tomorrow. That's all the time we have tonight. Thank you for watching. Goodbye from New York.