The Night Beat: What Will Obama Talk About With Hu?

Good evening.

ON TO TORONTO: The ramp freeze at Andrews has ended and Air Force One is wheels up to Toronto for the G-20 summit. On President Obama's schedule there: a bilateral meeting with Chinese President Hu Jintao. A senior administration official said that Obama plans to ask Hu for details on how China plans to implement the float of the RMB. He will also discuss China's equities in its sphere of influence, specifically with reference to North Korea's recent aggressive action, as well as trade and a slew of other issues.

But mostly, Obama will open his ears and listen, feeling rather satisfied about the personal relationship he's built with Hu over the past year and a half. The administration sees roughly four distinct Chinas: although they coordinate policy efficiently, China's foreign ministry, the PLA, its political leaders, and its internal economic powers all have different ways of looking at the world, and Hu's policy decisions are subject to pressures resulting from the internal debates. From day one, Obama has stressed global issues with China, "because frankly, we need their support to resolve them," the official said. By treating their aspirations as legitimate, the U.S. expects China to act like the world leader it is becoming.

What makes the relationship work is that the Chinese need the U.S. as much as the U.S. needs China. There are difficult areas for the two countries -- human rights, Taiwan, economic espionage, the Dalai Lama -- but Obama and Hu seem to have come to an agreement that when they disagree, they can perform the necessary political maneuvers to satisfy internal and international audiences, and then they can get back to work on common issues. This isn't a-pie-in-the-sky view: it actually seems to be how their relationship works. The one area where the U.S. wants more from China is on North Korea; it expects China to clarify, more publicly, that North Korean aggression is not acceptable.

With that in mind, read this "news" item from an official Chinese news organ carefully:
A Chinese government spokesman on Thursday said accusations made in the United States Congress that the yuan was undervalued were groundless and warned Washington against politicizing the currency issue. "We urge the United States to take a positive and constructive attitude rather than politicize the currency issue," Foreign Ministry spokesman Qin Gang told a regular briefing. "Imposing pressure and accusations are unjustified and the pursuit of its own interests at the expense of ..."

Well, you get the picture.

The point is: there is a reason China needs to say this, and the U.S. understands this reason and sees no reason to respond in kind.

BUSINESS BEAT: On Friday, we get the third and final revision of GDP for the first quarter. The first revision was revised down from 3.2 percent to 3.0 percent. Will it fall further? And Congress continues to try to figure out how it wants to move forward on the Volcker Rule and on derivatives regulation.

UH-OH: From Engadget:
In essence, Apple cops to the fact there are reception issues with the new iPhone -- namely, that if you cover the bottom-left corner of the phone and bridge the gap between the notch there with your naked flesh, you could see some signal degradation.

THE CIA's Xe CONTRACT: $100 million for protective activities at undisclosed locations. OK, that means Iraq and Afghanistan. But $100 million is too big for those countries alone. Which means the CIA is also using Xe, formerly Blackwater, elsewhere. As in: in other countries. Horn of Africa, anyone? Or Yemen? BTW: It's absolutely true that Xe still has enough senior managers from the Bush-Cheney era that Erik Prince, the former Blackwater CEO, could engage in what Jeremy Scahill calls "graymail" -- if you don't play nice with us, we're going to find a way to make sure that a lot of other people go down with us.

IRAN FROM GAZA: Iran will not send an aid ship to Gaza, according to CNN, which cites Iran's official news agency.

QUESTION: How well does Gen. Petraeus get along with Maj. Gen. William Flynn, currently the J2 (intelligence chief) in Afghanistan? Because a lot of people there want Flynn to stay put. In general, incoming commanding generals get to select their own staff.

LEGAL EAGLE: Moments after a judge declared that Sarah Palin's 2008 legal defense fund set up during the presidential campaign was illegal, and that Palin had to return the money to donors, said legal defense fund sent out an appeal for money:
Sarah Palin's enemies have scored another victory in their vicious campaign to smear, bankrupt, and force this dedicated public servant and conservative leader out of politics!  They have successfully questioned her prior legal defense fund--a fund that mirrored John Kerry's fund and Bill Clinton's fund.  So a new fund was necessary to make sure Sarah Palin can continue to speak the truth to Americans. As you know, Governor Palin made the painful decision to resign last summer rather than waste the good people of Alaska's time responding to the more than 27 frivolous lawsuits filed against her and her family by left-wing extremists.

CAMPAIGNS: On Saturday, Rick Santorum will keynote a luncheon at the Republican Party of Iowa's convention. ... Sarah Palin speaks at the Oil Palace (!) in Tyler, Texas that day and heads to Norfolk, VA for the Freedom Fest 2010 on Sunday. ... Vice President Biden raises money for Chris Coons in Delaware on Monday ... MN Gov. Tim Pawlenty is in South Carolina on Tuesday.


-- Ann and Mitt Romney are inviting journalists who covered Romney's 2008 campaign and as well as campaign staffers to their annual summer cook-out in New Hampshire on June 8.

-- Remember the old days ... when Russia was our enemy? Patrick Ottenhoff found a graphic way to make sure we do.

-- Will Obama clean house among senior Kabul-based U.S. civies? Andrea Stone asks and answers.

-- Tomorrow, the proposed .xxx domain will be officially ratified by the Internet Corporation for Assigned Names and Numbers.