Still think China's going to sign on to a new round of tough sanctions against Iran? Think again. China has most likely already passed the European Union to become Iran's No. 1 trading partner, the Financial Times reports:

Official figures say the EU remains Tehran’s largest commercial partner, with trade totalling $35bn in 2008, compared with $29bn with China.

But this number disguises the fact that much of Iran’s trade with the United Arab Emirates consists of goods channelled to or from China. Majid-Reza Hariri, deputy head of the Iran-China Chamber of Commerce, said that transhipments to China accounted for more than half of Tehran’s $15bn (€10.9bn, £9.6bn) trade with the UAE.

When this is taken into account, China’s trade with Iran totals at least $36.5bn, which could be more than with the entire EU bloc. No definite conclusion is possible because it is unclear how much of Iran’s trade with Europe is channelled via the UAE.

Iran imports consumer goods and machinery from China and exports oil, gas, and petrochemicals.

Today, China depends on Iran for 11 per cent of its energy needs, according to the chamber.

Look at it this way: Would the United States support hard-hitting sanctions against Saudi Arabia, which in November supplied nearly 8 percent of U.S. oil imports?

For all the criticism Barack Obama has received for his administration's handling of the attempted Christmas Day bombing of Flight 253, it doesn't seem like the American public is too concerned.

A new Gallup poll finds that the U.S. president's approval rating on terrorism is 48 percent, just about the same it has been for weeks:

His approval rating on foreign affairs generally is somewhat higher at 51 percent, though the American public seems to be growing concerned that he's not handling the Iran issue properly -- only 42 percent of respondents think he's doing a good job on that front:

I'm sad to see that John Murtha, the Pennsylvania congressman and defense spending cardinal, has died after a long and productive life in government.

Whatever your views on Murtha -- and as  someone who grew up in southwest Pennsylvania, I certainly have my own opinions -- this is very bad news for Johnstown, the main town in the district he represented for nearly 36 years. Because if there's one thing Murtha did, it was bring home the bacon. Millions of dollars of it.

There was the John P. Murtha Neuroscience and Pain Institute, the John P. Murtha Regional Cancer Center, the Joyce Murtha Breast Care Center, the John Murtha Johnstown-Cambria County Airport, and of course the John P. Murtha Institute for Homeland Security, to name but a few of the places, not to mention a number of defense contractors, kept afloat thanks to the congressman's mastery of the earmark system.The loss of a patron in Washington will be devastating.

Maybe, though, Johnstown will ultimately be better off without Murtha's largesse. The town was crushed by the collapse of the steel industry in the 1980s, and never really recovered. Murtha's projects, along with some telemarketing and retail business, were about the only source of employment the town of 24,000 had to offer. Yet household income is about half the national average, and the area school system is abysmal. Now, Johnstown will have to attract industry on the region's own merits, rather than relying on its powerful friend on Capitol Hill. It's going to be painful for a while, but I hope this hard-luck town will emerge stronger for it.

Scott Lucas, a professor of American Studies at the University of Birmingham whose blog has somehow emerged as a go-to place for Iran news, writes on Mahmoud Ahmadinejad's recent offer to send the Islamic Republic's uranium abroad:

That is a major shift, and it remains to be seen why Ahmadinejad made his move (and note that he made it in a hastily-called interview on national television), as well as signalling that there was talks about trading three US detainees for Iranian prisoners held abroad. The immediate speculation would be that there have been behind-the-scenes talks with brokers such as Turkey; the International Atomic Energy Agency and the US had both signalled in recent days that a deal was still on the table. At the same time, although the President is staying clear of the internal crisis in his public comments and actions, I have to wonder if he has also made this unexpected move to try and grab some “legitimacy” before 11 February.

Er, no. I'm pretty sure that none of these explanations are right. For one thing, the United States isn't actually signaling that the LEU deal is "still on the table." Not only has President Obama pointedly stopped reaching out rhetorically to Iran, he's now lumping Tehran in with Pyongyang -- one Washington Iran hand described the State of the Union address to me as "enemy talk." On and off the record, U.S. officials have in recent weeks all but declared the engagement track dead. Just last Friday, Secretary of State Hillary Clinton said of Iran, "Now, as we move away from the engagement track, which has not produced the results that some had hoped for, and move toward the pressure and sanctions track..." More enemy talk.

Second, Ahmadinejad's motive in making this offer is pretty clear: He's trying to sow divisions in the U.N. Security Council as it debates a fresh round of economic sanctions against his country. All Russia and China need is a hint of possible cooperation from Iran, and they've got an excuse to either veto tough multilateral sanctions or water them down to the point where they're meaningless. Trust me: I follow this game very closely, and I've seen Iran do the Lucy-with-the-football thing over and over. In the near future, the number of hard-liners in Tehran denouncing the offer will reach a tipping point, and it will be acrimoniously withdrawn.

The unfortunate thing is, Iran's gambit is already working. China's foreign minister has asked that the offer be explored and that Iran be given more time to come around. Russia's foreign minister welcomed Ahmadinejad's remarks, with no apparent doubts about his sincerity.

Some analysts seem to think Ahmadinejad wants the deal because it will bolster his internal standing. I don't see how -- he's made a career out of standing up to the West on the nuclear issue, so it's hard to imagine him feeling like he needs an agreement. Sure, if Iran successfully brings the arrogant Western powers to heel, it'll bolster his argument for an agressive foreign policy. But I don't think a murkier, mutually beneficial arrangement does much to help him.

None of this is to say that there's an urgent crisis here. Iran is still a ways away from having a nuclear weapon, assuming the vaunted new NIE  doesn't tell us otherwise. But I think by now we ought to at least understand how Iran operates pretty well.

I hadn't seen this earlier: John Pomfret relays word that Google's declaration that it would no longer comply with Chinese Internet censorship rules was a verboten subject in Davos this year.

"At China's request, that topic was left off the table at this year's World Economic Forum in Davos, Switzerland, Josef Ackermann, chief executive of Deutsche Bank and co-chairman of the event, told Bloomberg News," he writes.

So now China is capable of silencing debate in what's supposed to be an open forum?

Here's more from Bloomberg, which quotes Ackermann saying "China didn't want to discuss Google":

At Davos, participants such as financier George Soros, economist Joseph Stiglitz and French President Nicolas Sarkozy debated technology topics such as social networking and 3-D features used in the motion picture "Avatar." The discussion didn't include the conflict between China and Google, even in panels such as "The Rise of Asia" or "Redesigning the Global Dimensions of China's Growth."

Way to tackle the tough issues, guys.

Google CEO Eric Schmidt did briefly raise the subject on his own, however, according to the Wall Street Journal:

"We like what China is doing in terms of growth...we just don't like censorship," Mr. Schmidt said, speaking at the World Economic Forum's annual summit here. "We hope that will change and we can apply some pressure to make things better for the Chinese people." [...]

Mr. Schmidt maintained Friday that Google wants to continue operating in China. But he said the company didn't want to do so if it had to operate under China's censorship laws. To operate its Web site, Googe.cn in China, Google had to agree to censor its results.

"We would very much like to stay in China. We would very much like the censorship we oppose to improve in China," Mr. Schmidt replied.

Li Keqiang, China's vice premier, didn't address the issue in his speech, but apparently insisted in private that foreign companies must follow Chinese laws.

Via FP contributor Ashby Monk, here's an interesting story from Bloomberg News that hasn't gotten much attention. It seems that Russia tried to use its vast financial holdings and conspire with China to create "economic disruptions" in the United States in 2008. An astonishing scoop, if true.

The source of the tale is Hank Paulson, the former U.S. Treasury secretary whose memoir, On the Brink, is coming out soon. 

Says Bloomberg:

The Russians made a “top-level approach” to the Chinese “that together they might sell big chunks of their GSE holdings to force the U.S. to use its emergency authorities to prop up these companies,” Paulson said, referring to the acronym for government sponsored entities.

China rejected the idea, according to Paulson, and the Russians are denying the story. Monk, an expert on sovereign wealth funds, comments:

If true, it would appear that Russia was plotting economic warfare against the US during the summer of 2008; I don’t really know what else to call it. Their intention was to use their sovereign wealth to purposely weaken and damage the US economy. The fact that all this apparently occurred around the same time that Russia was engaged in a traditional war with Georgia, a US ally, lends some credibility to the idea.

Remember how I said 2010 would be a rough year for U.S.-China relations?

The first shoe to drop was Google's announcement that the privacy of Chinese human rights activists using its email software had been violated, and that cyberattacks on its servers had been traced to within China. 

Now, China is expressing furious anger over U.S. arms sales to Taiwan -- threatening unprecedented actions in response, including sanctions on U.S. companies, and hinting darkly of a broader unwillingness to cooperate with American diplomatic priorities (read: North Korea and Iran). Military-to-military cooperation between the U.S. and China now seems to be off the table, and deputies-level talks will be suspended.

Truth be told, China hadn't been and probably wouldn't be super helpful on Iran and North Korea's nuclear programs, but the direction the relationship is taking is worrying. In February, President Obama is supposed to meet with the Dalai Lama, and that is sure to provoke further ire in Beijing.

Obama administration officials had been expecting some blowback from the arms sales, and are downplaying China's reaction, but I wonder if even they see Beijing as upping the ante. Is this going to be the usual loud, public show of anger, followed by a return to business as usual? Or is China feeling its strength and looking to demonstrate that it can force the mighty United States to change course?

I detect a bit of arrogance in Beijing right now. Most recently, Colum Lynch reports, China sent a third or fourth-tier diplomat to U.N. discussions over Iran's nuclear program. At the climate talks in Copenhagen in December, not only did China seem to renege on promises it had made earlier, but Premier Wen Jiabao famously snubbed other top world powers by sending his deputy to a high-level meeting (I'm told by one participant that French President Nicolas Sarkozy was especially angry about the slight). This kind of thing may not make headlines, but it shapes other countries' willingness to make concessions and accomodate China's interests at the margins.

China is going to learn sooner or later that the famous line from Spider Man -- "with great power comes great responsibility" -- applies to real-world superpowers as much as it does to fictional superheroes.  Let's just hope it's sooner.

Perhaps the most talked-about moment in Obama's speech in the hours and days to come is going to be his rejoinder to the Supreme Court's recent decision on campaign donations from corporations:

With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests –- including foreign corporations –- to spend without limit in our elections. (Applause.) I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities. (Applause.) They should be decided by the American people. And I'd urge Democrats and Republicans to pass a bill that helps to correct some of these problems.

Video making the rounds now clearly shows Samuel Alito mouthing the words "not true" after Obama made the claim about foreign corporations, an unusual breach of decorum for a sitting Supreme Court justice. His colleagues sat impassively, though they clearly were not happy at being singled out for criticism in a State of the Union address.

The majority's decision in the case in question, Citizens United vs. Federal Election Commission, reads:

We need not reach the question whether the Government has a compelling interest in preventing foreign individuals or associations from influencing our Nation's political process. . . Section 441b is not limited to corporations or associations that were created in foreign countries or funded predominantly by foreign shareholders. Section 441b therefore would be overbroad even if we assumed, arguendo, that the Government has a compelling interest in limiting foreign influence over our political process.

In other words, the court essentially said it wasn't going to decide on whether foreign corporations can claim First Amendment rights. You might say it was an open invitation to let Congress weigh in on this question, or let interested parties duke it out in the courts.

UPDATE: Linda Greenhouse thinks Alito was reacting to the "century of law" bit, not the point about foreign corporations.