Obama ‘wilfully’ provoking Beijing?

China Hand (Peter Lee) has a post today on what looks like a really important story: the eruption of a startling new war of words between Washington and Beijing– a phenomenon that Lee indicates could be undergirded by some serious new tensions in this world-defining relationship.
The way he tells it, the latest spat began on Sunday, at the G-20 summit in Toronto, when Obama publicly accused China of “wilful blindness” by remaining silent over North Korea’s suspected sinking of a South Korean warship in March.
Today, People’s Daily Online hit back. An unsigned editorial there said of Obama,

His words on such an important occasion, based on ignorance of China’s consistent and difficult efforts in pushing for peace on the peninsula, has come as a shock to China and the world at large.
As a close neighbor of North Korea, China and its people have immediate and vital stakes in peace and stability on the peninsula. China’s worries over the North Korean nuclear issue are by no means less than those of the US.
The US president should have taken these into consideration before making irresponsible and flippant remarks about China’s role in the region.
The facts speak for themselves, and very clearly so: China has made tremendous efforts in preventing the situation on the Korean Peninsula from getting out of control, including in the aftermath of the Cheonan incident.
Without China’s involvement, there would not have been the Six-Party Talks, and the outbreak of yet another Korean War might well have been a possibility.
It is thus not China that is turning a blind eye to what North Korea has done and has not done.
Instead, it is the leaders of countries such as the US that are turning a blind eye on purpose to China’s efforts.

Lee writes in his post:

Characterizing the US president as “irresponsible and flippant” is a convenient indicator that US-China relations are headed for the meat locker.
Another indication is the Chinese announcement that it will conduct live fire naval exercises as a riposte to the US-ROK joint exercises scheduled June 30 to July 5, which may or may not include a US aircraft carrier sailing around the Yellow Sea between the Korean peninsula and the Chinese mainland.

He has some more material, too, about the US continuing to pursue anti-China policies in another dimension of the US-China relationship, namely the intermittent jockeying over the status of Tibet.
He concludes:

as far as I can see, the Obama administration policy toward China is all sticks no carrots. The consequences of crossing the United States are meant to be dire, but I haven’t seen any significant proffered benefits to China for toeing the U.S. line, other than the intangible ones–like not having President Obama insult your President at high profile international forums.
It will be interesting to watch this play out, especially in the run-up to the 2010 US congressional elections.

Indeed. Interesting, and quite possibly very depressing. Not least because the relationship with China is (like US-Turkish relations) yet another of the key aspects of US diplomacy in which the actions of dedicated pro-Israeli zealots within the US political system are currently making great and completely unnecessary problems for the true interests of the American people.
As Lee himself showed in some detail in this recent post at Asia Times Online, which detailed the degree to which Stuart Levey, the head of the US Treasury Department’s ‘Office for Terrorism and Financial Intelligence” (OTFI) now has China in his sanctions cross-hairs.
Lee unapologetically describes Levey as the “‘father’ of the North Korean atomic bomb”, explaining that it was Levey’s excessive zeal as head of OTFI in instituting sanctions in September 2005 against a small bank in Macau called the Banco Delta Asia (BDA) that had spurred Kim Jong-Il to withdraw from the six-party talks and detonate North Korea’s first nuclear bomb just weeks later, on October 9.
As Lee added laconically, a second immediate effect of Levey’s action that year was that, “America’s image as an honest broker impartially protecting the integrity of the dollar-based international financial system was seriously tarnished.”
Lee concludes the ATO article by writing,

Given… OTFI’s rather dismal record of failure and insubordination on BDA, it is interesting that the Obama administration kept Levey in his post after it took office.

An explanation could almost certainly be found in some of the sources cited in this April 2010 post at Mondoweiss.
In it, Jeff Blankfort and Phil Weiss recall that in 2005, Levey told an AIPAC policy conference that,

It is a real pleasure to be speaking with you today. I have been an admirer of the great work this organization does since my days on the one-year program at Hebrew University in 1983 and 1984. I want to commend you for the important work that you are doing to promote strong ties between Israel and the United States and to advocate for a lasting peace in the Middle East….

Blankfort and Weiss have more good stuff there, as well– on Levey’s also strongly pro-Israeli deputy David Cohen, as well as on Levey himself.
These guys are dug very deep into sensitive portions of the administration at this point; and they are backed up by great cohorts of AIPAC-orchestrated funders and propagandists who work at the congressional and public-discourse levels to try to keep us all living inside the AIPAC-defined blinkers.
But they are now prepared to put the core U.S. relationship with China that undergirds the entire current world economic system at risk, just because of their (Israel-motivated) zeal against Iran?
Yes, it seems so.
That was a dangerous and escalatory game to be playing back in 2005. But today, the globe-girdling balance between Washington and Beijing has shifted considerably. This time, Stuart Levey’s Israel-motivated zealotry against China could have consequences that are far, far more damaging for humanity.
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Update, Wed, 10:30 am.
A friend sent me this 2006 profile of Levey from the WaPo Style section. The writer, Dafna Linzer, quotes Clinton administration official as describing Levey as “a loyal Republican, but he would not let politics color or direct a judgment that he would otherwise make.”
Linzer also notes that Levey, “spent his junior year [from college] studying at Jerusalem’s Hebrew University, where he worked on an undergraduate thesis on Meir Kahane…” It seems possible from what Linzer wrote that the thesis was critical of Kahane.
But regarding U.S. politics, Levey’s politics seemed clear:

Levey was dispatched to Florida as part of the 2000 election recount. Like many of the Republican lawyers behind Bush v. Gore , Levey joined the government shortly afterward. He chose the Justice Department, serving under then-Deputy Attorney General Larry D. Thompson.
Levey started out handling immigration issues. After the attacks of Sept. 11, 2001, Thompson promoted him to chief of staff and added money laundering and anti-terrorism activities to his portfolio.
Thompson is among a long list of conservative mentors to Levey. They include Judge Laurence H. Silberman, former senator John C. Danforth (R-Mo.) and Martin Peretz, the New Republic’s editor in chief, who was Levey’s Harvard thesis adviser and who describes him as “dazzlingly smart.”

Linzer also had this:

This February, Levey traveled to the Middle East with Secretary of State Condoleezza Rice shortly after Hamas, or the Islamic Resistance Movement, had won Palestinian elections. As part of a small team of administration officials grappling with the results, Levey tried to figure out how to get money to the Palestinian people without going through Hamas.
… On the way back from Jerusalem, Levey approached Rice on a different matter: financial levers he thought could be used to pressure Iran. Rice was impressed, her aides said, and Levey was asked to lead a task force designed to implement financial sanctions against Tehran if negotiations over its nuclear program fell apart.

So there you have it. A man without much political loyalty to Pres. Obama’s party as such. But with a lot of loyalty to AIPAC’s highly escalatory and destabilizing anti-Iran agenda.
Someone remind me why Obama kept him on again?