One month ago, Google put the word out that it was looking to build and test its own fiber-to-the-home networks in a couple of cities. The speeds would be up to 1 Gbps and the reach would initially be about 50,000 homes.

Immediately, hundreds of cities began making pitches to attract Google’s attention, some earnest, some outlandish.

Topeka, Kansas unofficially renamed itself “Google” for the month and garnered a considerable amount of attention; Sarasota, Florida quickly followed suit and re-named its City Island “Google Island”.

Duluth, Minnesota’s mayor Don Ness jumped into a 35 degree Lake Superior as a dual-purpose media event for Google Fiber and the Special Olympics; and 1,000 Morgantown, West Virginia residents last week held up signs saying “We Want a Gig” at the WVU-Georgetown basketball game.

But the majority of the cities interested in getting Google Fiber haven’t resorted to cheap publicity stunts, and are hoping that their answers to Google’s Request for Information will be much more convincing.

“I think we’re going to draw the line at silly stunts,” Madison, Wisconsin alderman Mark Clear said today. City officials there are hosting a public meeting to gather ideas for their pitch and show the community’s interest in the project.

Juneau, Alaska has made the case that its isolated, mountainous location will serve as an ideal testing ground since it is both environmentally challenging and populous.

Maryland Governor Martin O’Malley reminded us of Baltimore’s historical significance as “that place from which our nation’s railroads emanated, and the place that was the source of the first telegraph message ever sent.”

Kalamazoo, Michigan is using health care as its wager. The Kalamazoo Gazette’s Editorial board argues that its modern health care facilities and its major medical corporations Pfizer and Stryker could benefit greatly from the fiber network.

In just under three weeks, we will be able to see which approach worked. March 26 is the last day Google will accept submissions for its fiber optic trial, and it will announce which cities it has chosen shortly after.

NEWTOWN, Conn., 9 March 2010. RF jammers and other electronic warfare (EW) technology will create a $28.4 billion market over the next decade, as purveyors of electronic countermeasures (ECM), radar warning receivers (RWRs), electronic support measures (ESM), and other EW systems produce about 45,000 systems, predict market analysts at Forecast International in Newtown, Conn..

The nation’s top electronic warfare systems suppliers — Northrop Grumman, BAE Systems, Raytheon, ITT, and Lockheed Martin among them — will continue producing missile countermeasures systems over the next 10 years, as well as developing next-generation EW technology, Forecast International analysts say in a report entitled “The Market for Electronic Warfare Systems.”

The U.S. Department of Defense (DOD), for example, will spend more than $560 million over the next three years to buy Northrop Grumman’s Large Aircraft Infrared Countermeasures (LAIRCM) system for as many as 444 aircraft, analysts say. In addition, DOD will choose contractors within the next two years to develop and build the Next-Generation Jammer (NGJ).

“While production of critical EW systems like counter-IED and IR-guided missile jammers will be high over the next few years, several R&D programs are in a competition phase that will eventually result in billions of dollars in revenue for the companies chosen to supply technologies for them,” says Andrew Dardine, senior analyst at Forecast International.

The U.S. Navy in early 2009 awarded NGJ research contracts to teams led by BAE Systems, ITT, Northrop Grumman, and Raytheon. By late 2012, the Navy plans to award an engineering and manufacturing development (EMD) contract to one supplier. The total value of the NGJ program once it gets up and running will be nearly $1 billion, experts say.

A competition is in progress to develop the Counter Radio-Controlled Improvised Explosive Device (RCIED) Electronic Warfare (CREW) 3.3 system of systems. Naval Sea Systems Command last October awarded contracts to ITT Force Protection Systems and Northrop Grumman Space and Mission Systems for CREW 3.3 System of Systems development.

For more information contact Forecast International online at www.forecastinternational.com.

Not only does North Korea have “its own Internet” – a national information network independent from the US-based Internet regulator – it also has an operating system, developed under by order of Kim Jong-il.

Russian student Mikhail, who studies in the Kim Il-sung University and writes a blog has recently purchased the Red Star Operating System (OS) and tested it. Courtesy of Mikhail, RT gives you an opportunity to take glimpse at IT life of world’s most closed country.

The Red Star is a Linux-based OS developed by North Korean IT specialists last year. Readme file, which goes with the install disc, even gives a quote from Kim Jong-il about how important for DPRK is to have its own Linux-based operating system compatible with Korean traditions.

The version tested by Mikhail is the latest build, which, according to locals, still needs polishing. The OS is not popular (yet?), with most people who need one preferring Windows XP and Windows Vista.

Mikhail bought his copy for about $5 in an information center 5 minutes walk from the university dorm. Interestingly, no permission is required for it, which is probably explained by the regulation of the sale of computers.

The system has server and client versions, and apps can be bought separately at twice the price.

Installation of the Red Star is possible straight from the bootable disk, from hard drive, or via the net. The whole process takes 10 to 15 minutes. While the files are copied, the user is shown tips like in a Windows installation, saying that the system “is now faster and simpler”. Unlike Windows, you will not be allowed to select your system language: only Korean is available.

Then the system starts. Here is the logo on the start screen:

User selection screen is standard. User “root” is the default one, while user “Kim” was created by Mikhail. The picture is that of a popular Korean cartoon character.

Red Star desktop.

Red Star cannot be called modest in terns if system requirements. You will need at least a Pentium III 800 Mhz with 256 Mb RAM and astounding 3Gb hard drive space!

The desktop is pretty much standard, with a My Computer icon, a trash bin and a link to a system tour. The red star in bottom left corner opens the system menu, while icons next to it are the quick launch panel. Notice the clock on the left – the year is 99th of the Juche Idea, the official North Korean ideology.

My Computer launches the file browser. Here is how it looks:

Standard applications for the system are low in number: web-browser “My Country” (which is actually Firefox in disguise), a simple word processor, a picture viewer, a pdf reader, players for audio and video files, a file archiver, a virtual disk manager and stuff like calculator or symbol table. All the applications except the web-browser are named after their functionality.

The OS has its own keyboard layouts for Korean (does not match the Windows version), English, Russian, Chinese and Japanese.

There are also four games: Minesweeper, Klondike solitaire, Jawbreaker and a logic game where the player builds correct chemical formulae.

Applications on the second disk included: service programs for the client version of Red Star, which strictly speaking should have been on the first disk, an office app suite “We”, similar to OpenOffice and another similar software suite, a program for recording CD/DVD, an e-mail client “Pigeon” (after the mail-delivering bird), Janggi board game (Korean chess), a fax communication tool, antivirus “Woodpecker”, notebook “My Comrade”, a graphics editing program, firewall “Pyongyang Fortress”, an engineer’s calculator and a Windows emulator.

The Application Manager shown here is also used for system updates.

Naenara web browser was successfully recognized by Firefox website, which offered downloads of the latest Korean version of the browser for Linux i686. Note that the default search engine is not Google but Naenara BBS. Since Mikhail was tinkering with the system in the embassy, where the Korean national network is not available, he had no opportunity to do some test searches.

Mikhail did test the antivirus, however, which (along with the firewall) was built from scratch by North Korean coders rather than re-written from an open source applications. It did well at finding and killing the viruses offered to it.

The Windows emulator worked well too. Mikhail launched Warcraft 3, and the game worked smoothly. So did the dictionary software and a digital library available on the disk.

What is interesting for a North Korean product is the near-total absence of propaganda – unless you treat the word “red” in its name as an instance.

MOUNTAIN VIEW, Calif.–Google is bringing the app store concept to business cloud computing, giving software developers a storefront for Google Apps customers.

The Google Apps Marketplace will allow Google Apps users to purchase third-party applications to run atop the Google Apps suite, said Vic Gundotra, vice president of engineering for Google. Developers will have to pay a one-time $100 fee to list their applications in the store, and Google will get a 20 percent cut of all applications sold through the store, he said.

Google’s interest in such a store was first revealed last month by The Wall Street Journal. The idea is that although Google has an army of capable software developers, it can’t hope to anticipate the needs of every single Google Apps users. Third-party developers can fill those gaps and make Google Apps more useful to businesses with unique needs that don’t quite fit into the Google Apps suite.

Take payroll, for example. Google isn’t in the enterprise-resource planning software market (yet), but Intuit is, said Martin Gates, chief technology officer for online payroll at Intuit. He demonstrated how Google Apps users can integrate an Intuit-developed Web-based payroll application that’s linked with Google Apps, allowing employees to download their pay stubs simply by clicking on an icon in their Google Calendars.

Scott Farquhar, CEO of software tools company Atlassian, showed how Google Apps can be integrated directly into his company’s software development tools. For example, software developers using Atlassian’s project-management tools can have Gmail, Google Calendar, and Gchat applications integrated directly into the software development tool, so they don’t have to leave that window to check their e-mail or chat with colleagues.

Google Inc. is testing a new television-programming search service with Dish Network Corp., according to people familiar with the matter, the latest development in a fast-moving race to combine Internet content with conventional TV.

The service, which runs on TV set-top boxes containing Google software, allows users to find shows on the satellite-TV service as well as video from Web sites like Google’s YouTube, according to these people. It also lets users to personalize a lineup of shows, these people said.

With the test, Google moves deeper into a crowded field of companies, large and small, that have been trying for years to marry the Web and TV and their business models—from rivals Microsoft Corp. and Apple Inc. to the manufacturers of televisions and set-top boxes.

Just last week, TiVo Inc. announced new digital video recorders that blend broadcast and online content.

Google’s test, which began last year, is limited to a very small number of the company’s employees and their families and could be discontinued at any time, said the people familiar with the matter.

Viewers in the Google test, these people said, can search by typing queries, using a keyboard rather than a remote control. Google hopes to connect the service with its nascent TV ad-brokering business, allowing it to target ads to individual households based on search and viewing data.

A Google spokeswoman said the company doesn’t comment on rumor or speculation.

A spokeswoman for Dish Network, which has roughly 14 million subscribers, declined to comment.

Previous efforts to access Internet programming on TV sets have failed to catch on, partly because they required consumers to purchase extra hardware. By working directly with an operator like Dish and its hardware, Google could avoid the such issues. Unlike earlier efforts, Google’s service isn’t just about accessing Web content. It is also a search service that is integrated with the operator’s programming.

For Google, which dominates Web search and the advertising revenue generated by it, the test represents another effort to extend its technology for delivering targeted ads into new fields, as its search business slows down.

The company is already playing a major role in the market for smart phones and mobile ads, for example, using an operating system called Android that is gaining popularity and supports a range of Google services.

Google appears to be pursuing a strategy to deliver ads across many Intenet-enabled devices from many Web sites.

The company has begun to target the market with a nascent ad-brokering business called Google TV. On the content side, its YouTube site has struck a variety of syndication deals with TV makers and console companies.

In addition to the test with Dish, Google has been talking to a range of other television-service providers and hardware makers, prodding them to use its Android-based technologies to offer a broader range of programming, a more personal experience and ads.

Google Chief Executive Eric Schmidt said in a January interview that it “makes sense that people would use Android as an operating system for set-top boxes and buddy boxes and TVs” and added “all of those ideas have been proposed by our partners.” Mr. Schmidt said Google isn’t in the business of making the hardware itself, however.

But playing any major role in TV won’t be easy. Despite moves to create more open standards around set-top boxes, most cable and satellite companies closely guard their set-top box software and their overall programming experience.

While many are scrambling to find ways to take advantage of programming delivered using the Internet, hardware companies and operators have tended to custom-tailor such offerings rather than offer access to all Web sites. They may actively resist the notion of opening their services to Google.

To make TV ads more targeted, cable companies have banded together to form Canoe Ventures, a consortium that has agreed to roll out ads targeted at particular demographics– and eventually households—on a national scale. The project has been delayed due to technology issues.

Google’s own TV ad business is a cautionary tale. Google has sold ads on TV since 2007, opening the program up to all advertisers in 2008. Currently advertisers can buy TV ads online for nearly 100 national cable networks, according to the company, and track how the ads perform.

But the program, which relies on an online auction similar to its search business, hasn’t generated any material revenue for the company.

Google has attributed the reception to the fact that many set-top boxes or TVs aren’t capable of delivering the two-way feedback it uses to tailor its algorithms. That problem has eased somewhat lately, as a large number of new TVs now come with Internet connections.

People familiar with the matter say Google plans to pursue a similar strategy on TVs as it did with mobile phones, using Android and other software technology to help open TVs and set-top boxes to new content and new ads.

Richard Doherty, director of technology consulting firm Envisioneering Group, says Google has a good shot of luring users due to technology advantages. For instance, he says set-top boxes running Android or other bits of software Google developed, like Chrome, could be updated instantly, while operators take much longer to refresh their offerings.

“No one Net entity has the deep resources to give so many viewers free features which could enrich Google far beyond the operators’ own dreams,” he said.

Write to Jessica E. Vascellaro at jessica.vascellaro@wsj.com

Stepping up its fight against Microsoft Corp., Google Inc. acquired DocVerse, a technology startup that allows people to edit Microsoft Office files online.

Google paid around $25 million for the San Francisco-based company, according to a person familiar with the matter.

In an interview, Jonathan Rochelle, group product manager for Google Apps, said Google acquired DocVerse to make it easier for people to transition from desktop software to online software. The latter is an area where Google is trying to get a leg up over Microsoft, with its Google Apps service, which includes online word-processing and spreadsheet software. He declined to comment on the deal’s price.

Google will make DocVerse’s technology part of its Google Apps, Mr. Rochelle said, allowing users who upload Microsoft files into Google storage to edit and collaborate on them. Google also made the software, which carried fees for some types of usage, free and temporarily suspended new sign-ups.

The deal is one of around a half dozen acquisitions that Google has announced since the end of 2009. Other deals include AppJet, which also makes collaboration software, and mobile advertising company AdMob.

DocVerse was founded two and a half years ago by two former Microsoft employees, Shan Sinha and Alex DeNeui. The company has raised about $1.5 million in venture financing from Baseline Ventures and others. In addition to allowing people to do things like edit PowerPoint slides online, it also allows users to comment on documents online and display those comments visible to other users.

In an interview, Mr. Sinha said DocVerse was excited to help foster Google Apps as an effective service for collaborating across different files types. While noting that Microsoft is also developing ways for people to collaborate on files online, he said Google is “better positioned to reinvent Web-based business software” than Microsoft and executing “more effectively and quickly.”

A Microsoft spokeswoman said in a statement that Google’s DocVerse deal acknowledges that “customers want to use and collaborate with Microsoft Office documents.” The statement continued to say that “businesses around the world” are using Microsoft’s collaboration service, SharePoint, citing Coca Cola Enterprises, Kraft and Volvo as examples.

Separately Friday, Google disclosed its top three executives will be paid $1 in compensation in the current fiscal year and will not receive bonuses, according to a filing with the Securities and Exchange Commission. The search giant’s Chief Executive Eric Schmidt and co-founders Sergey Brin and Larry Page also were paid $1 and took no stock, stock options or bonus in 2008.

Write to Jessica E. Vascellaro at jessica.vascellaro@wsj.com

Did you know that blocking ads truly hurts the websites you visit? We recently learned that many of our readers did not know this, so I’m going to explain why.

There is an oft-stated misconception that if a user never clicks on ads, then blocking them won’t hurt a site financially. This is wrong. Most sites, at least sites the size of ours, are paid on a per view basis. If you have an ad blocker running, and you load 10 pages on the site, you consume resources from us (bandwidth being only one of them), but provide us with no revenue. Because we are a technology site, we have a very large base of ad blockers. Imagine running a restaurant where 40% of the people who came and ate didn’t pay. In a way, that’s what ad blocking is doing to us. Just like a restaurant, we have to pay to staff, we have to pay for resources, and we have to pay when people consume those resources. The difference, of course, is that our visitors don’t pay us directly but indirectly by viewing advertising. (Although a few thousand of you are subscribers, and we thank you all very, very much!)

My argument is simple: blocking ads can be devastating to the sites you love. I am not making an argument that blocking ads is a form of stealing, or is immoral, or unethical, or makes someone the son of the devil. It can result in people losing their jobs, it can result in less content on any given site, and it definitely can affect the quality of content. It can also put sites into a real advertising death spin. As ad revenues go down, many sites are lured into running advertising of a truly questionable nature. We’ve all seen it happen. I am very proud of the fact that we routinely talk to you guys in our feedback forum about the quality of our ads. I have proven over 12 years that we will fight on the behalf of readers whenever we can. Does that mean that there are the occasional intrusive ads, expanding this way and that? Yes, sometimes we have to accept those ads. But any of you reading this site for any significant period of time know that these are few and far between. We turn down offers every month for advertising like that out of respect for you guys. We simply ask that you return the favor and not block ads.

If you read a site and care about its well being, then you should not block ads (or you subscribe to sites like Ars that offer ads-free versions of the site). If a site has advertising you don’t agree with, don’t go there. I think it is far better to vote with page views than to show up and consume resources without giving anything in return. I think in some ways the Internet and its vast anonymity feeds into a culture where many people do not think about the people, the families, the careers that go into producing a website. People talk about how annoying advertisments are, but I’ll tell you what: it’s a lot more annoying and frustrating to have to cut staff and cut benefits because a huge portion of readers block ads. Yet I’ve seen that happen at dozens of great sites over the last few years, Ars included.

Invariably someone always pops into a discussion like this and brings up some analogy with television advertising, radio, or somesuch. It is not in any way the same; advertisers in those mediums are paying for potential to reach audiences, and not for results. They have complex models which tell them if X number are watching, Y will likely see the ad (and it even varies by ad position, show type, etc!). But they really have no true idea who sees what ad, and that’s why it’s a medium based on potential and not provable results. On the Internet everything is 100% trackable and is billed and sold as such. Comparing a website to TiVo is comparing apples to asparagus. And anyway, my point still stands: if you like this site you shouldn’t block ads. Invariably someone else will pop in and tell me that it’s not their fault that our business model sucks. My response is simple: you either care about the site’s well-being, or you don’t. As for our business model sucking, we’ve been here for 12 years, online-only. Not many sites can say that.

Let me stop and clarify quickly that I am not saying that we are on the verge of vanishing from the Internet. But we, like many, many sites are greatly affected by ad blocking, and it is a very worrisome trend.

So I’ll end this part of the discussion by just reiterating my point: blocking ads hurts the sites you love. Please consider not blocking ads on those sites.

An experiment gone wrong

Starting late Friday afternoon we conducted a 12 hour experiment to see if it would be possible to simply make content disappear for visitors who were using a very popular ad blocking tool. Technologically, it was a success in that it worked. Ad blockers, and only ad blockers, couldn’t see our content. We tested just one way of doing this, but have devised a way to keep it rotating were we to want to permanently implement it. But we don’t. Socially, the experiment was a mixed bag. A bunch of people whitelisted Ars, and even a few subscribed. And while others showed up to support our actions, there was a healthy mob of people criticizing us for daring to take any kind of action against those who would deny us revenue even though they knew they were doing so. Others rightly criticized the lack of a warning or notification as to what was going on.

We made the mistake of assuming that everyone who is blocking ads at Ars is doing so with malice. As it turns out, only a few people are, and many (most?) indicated you are happy to help out. That’s what led to this hopefully informative post.

Our experiment is over, and we’re glad we did it because it led to us learning that we needed to communicate our point of view every once in a while. Sure, some people told us we deserved to die in a fire. But that’s the Internet! Making its ways into parents’ basements since 1991. To those people I say: admit it, you just wish you were half as cool as this guy.

Microsoft executives have indicated repeatedly throughout 2010 that the company intends to stay in China and compete aggressively for the search and cloud-computing markets, despite some controversy between the Chinese government and Google earlier in the year that saw the search-engine giant briefly threatening to pull its operations from the country. Both Microsoft and Google lag behind homegrown Chinese search engine Baidu in that market, considered one of the world’s fastest-growing. Both Microsoft CEO Steve Ballmer and Google CEO Eric Schmidt have reaffirmed their commitment to human rights within the context of doing business in China.

A Microsoft executive indicated that the company plans to stay the course in China, despite the recent dispute between Google and the Chinese Government that saw the search-engine giant threatening to pull its operations out of the country.

“Regardless of whether or not Google stays, we will aggressively promote our search and cloud computing (in China),” Zhang Yaqin, Microsoft’s chairperson of its Asia-Pacific R&D Group, told Reuters on March 5. “We hope to achieve a relatively important place in the China search market…but we must be very patient, we need a lot of time.”

Google threatened to pull out of China on Jan. 12, after a widespread cyber-attack which the company claimed targeted the Gmail accounts of Chinese human rights activists. The Chinese government has repudiated accusations that it was involved in the cyber-attacks, which additionally struck over 30 companies and supposedly originated from the Chinese mainland.

One of the pieces of malware involved in the attack, according to a Jan. 14 analysis by McAfee Labs, utilized a zero-day vulnerability present in Microsoft Internet Explorer. Microsoft would later pinpoint that vulnerability as an invalid pointer reference affecting Internet Explorer versions 6, 7, and 8.

“Accusation that the Chinese government participated in the cyber-attack, either in an explicit or inexplicit way, is groundless and aims to denigrate China,” a spokesperson of the Ministry of Industry and Information Technology told the Chinese newspaper Xinhua in January. “We [are] firmly opposed to that.”

During Google’s fourth-quarter earnings call on Jan. 21, CEO Eric Schmidt seemed to retreat from Google’s more belligerent position from earlier in the month, saying that: “We have made a strong statement we wish to remain in China. We like the Chinese people. We like our Chinese employees. We like the business opportunities there and we would like to do that on somewhat different terms than we have. But we remain quite committed to being there.”

On Jan. 29, Schmidt emphasized a similar line of argument at the World Economic Forum in Davos, Switzerland: “We love what China is doing as a country and its growth. We just don’t like the censorship. We hope to apply some negotiation or pressure to make things better for the Chinese people.”

But whether Microsoft sees the potential for some sort of opening in the aftermath of Google’s conflict, or whether CEO Steve Ballmer and other executives merely want to re-emphasize for the media that they intend to keep cordial relations with the Chinese government, is a line of thought likely to be closely retained by the strategists in Redmond.

“Engagement in China and around the world is very important to us, in part because we believe it accelerates access to 21st century technology and services and helps provide the widest possible range of ideas and information,” Microsoft CEO Steve Ballmer wrote in a Jan. 27 posting on the Official Microsoft Blog. “We have done business in China for more than 20 years and we intend to stay engaged, which means our business must respect the laws of China.”

However, Ballmer added in that posting, “Microsoft is opposed to restrictions on peaceful political expression, and we have conversations with governments to make our views known. In every country in which we operate, including China, Microsoft requires proper legal authority before we remove any Internet content; and if we remove content, we give users notice.”

Within China, Google and Microsoft lag behind homegrown search engine Baidu, which commanded 56 percent of that market at the end of 2009, compared to Google’s 43 percent. According to analytics firm StatCounter, Yahoo and Bing’s combined share of the Chinese search market stood at around 1.18 percent through 2009.

JERUSALEM — Israel’s military has “unfriended” one of its own — after a combat soldier potentially updated Israel’s enemies on Facebook.

The military said Wednesday that a planned raid on a West Bank village was called off after the soldier disclosed its details online. The military said the soldier posted the time and location of the raid on his Facebook page, saying that troops were planning on “cleaning up” the village.

Fellow soldiers reported the leak to military authorities, who canceled the raid, fearing that the information may have reached hostile groups and put troops at risk.

The soldier was court-martialed and sentenced to 10 days in prison. He was also removed from his battalion and combat postings.

A military statement added that it is cracking down on soldiers’ use of social networking Web sites and has launched a campaign warning of the dangers of sharing military information online.

“Uploading classified information to social networks or any Web site exposes the information to anyone who wishes to view it, including foreign and hostile intelligence services,” the military statement read. “Hostile intelligence agents scan the Internet with an eye toward collecting information on the IDF (Israel Defense Forces), which may undermine operational success and imperil IDF forces.”

The military said that soldiers were prohibited from publishing classified information, including photographs containing military data.

In posters placed on military bases, a mock Facebook page shows the images of Iranian President Mahmoud Ahmadinejad, Syrian President Bashar Assad and Hezbollah leader Sheik Hassan Nasrallah. Below their pictures — and Facebook “friend requests” — reads the slogan: “You think that everyone is your friend?”

Recent statements by Chinese military officials are raising concerns among U.S. analysts that the communist government in Beijing is shifting its oft-stated “peaceful rise” policy toward an aggressive, anti-U.S. posture.

The most recent sign appeared with the publication of a government-approved book by Senior Col. Liu Mingfu that urges China to “sprint” toward becoming the world’s most powerful state.

“Although this book is one of many by a senior colonel, it certainly challenges the thesis of many U.S. China-watchers that the People’s Liberation Army’s rapid military growth is not designed to challenge the United States as a global power or the U.S. military,” said Larry M. Wortzel, a China affairs specialist who until recently was co-chairman of the congressional U.S.-China Economic and Security Review Commission.

A Reuters report on Col. Liu’s book, “The China Dream,” appeared Tuesday in the Communist Party newspaper People’s Daily. It quoted the book as stating China and the United States are in “competition to be the leading country, a conflict over who rises and falls to dominate the world.”

Mr. Wortzel said the statements in the book contradict those of former President Jiang Zemin and other Chinese leaders who said China’s rise to prominence in the 21st century would be peaceful. They also carry political weight because the book was published by the Chinese military.

The book was released after calls by other Chinese military officials to punish the United States for policies toward Taiwan, U.S. criticism of China’s lack of Internet freedom and U.S. support for the exiled Tibetan leader Dalai Lama.

One official, Maj. Gen. Luo Yuan, called for using economic warfare against the U.S. over arms sales to Taiwan and urged selling off some of China’s $750 billion in holdings of U.S. debt securities.

China’s military also recently cut off military exchanges with the Pentagon after the announcement of a $6.4 billion sale of helicopters and missiles to Taiwan.

Asked about Col. Liu’s book, State Department spokesman P.J. Crowley said it would be wrong for China to view itself as a U.S. competitor. For the 21st century, U.S.-China relations are the most important ties in the world and “it is a mistake to see the relationship in zero-sum terms,” Mr. Crowley said.

Some U.S. officials in the past dismissed similar alarming statements from the Chinese military as not reflecting official views.

However, Chinese leaders have not disavowed Gen. Luo’s remarks or those of others, such as Maj. Gen. Zhu Chenghu, who in 2005 said China would use nuclear weapons against the United States in response to any firing of conventionally armed long-range cruise missiles against Chinese cities. The statement contradicted Beijing’s declared policy of not using nuclear weapons first in a conflict.

Gen. Zhu reportedly was criticized and demoted but surfaced in print Feb. 10, calling for increased defense spending and boosting military deployments in response to the Taiwan arms sale.

China on Thursday announced that it would increase defense spending this year by 7.5 percent, a smaller increase than in previous years, in an apparent effort to limit criticism of its double-digit annual spending increases for more than a decade.

The recent military statements also counter insistence by many U.S. officials that China’s strategic intentions toward the United States are masked by the lack of “transparency” in the communist system.

U.S. intelligence analysts, in analyses and estimates, also have dismissed or played down evidence of Chinese military deception to hide its true goals. They instead have said in classified reports that the use of strategic deception to hide China’s military buildup is similar to masking efforts of Western powers.

Critics of those analysts’ “benign China” outlook say such views resulted in missing major strategic and military developments by China for more than a decade, such as new missiles, submarines and other advanced military hardware, some that were built in complete secrecy.

The recent Chinese military statements have renewed the long-running debate in U.S. policy and intelligence circles about China’s long-term military intentions and whether they pose threats to U.S. interests.

Mr. Crowley said the U.S. is a global power and “will remain so for the indefinite future,” while China is a rising global power moving to gradually integrate into the global system.

Both countries “have a shared responsibility to cooperate where we can to solve critical international challenges, and manage areas where our national interests may collide,” he said.

Michael Pillsbury, a Pentagon policy official in the Reagan administration, said Chinese military authors have reignited a “nasty debate” in Washington on China.

Mr. Pillsbury, author of two books on Chinese military views of the future, said some U.S. China hands tried to trivialize the nationalistic views because senior Chinese officials do not make such statements at official meetings with U.S. counterparts.

“China’s foreign minister once told the U.S. secretary of state that China has no intention of ever pushing the U.S. out of Asia,” he said. Yet, “the Chinese military itself seems to function with considerable autonomy and no real civilian oversight, so it is plausible that these Chinese military hawks are not mere mavericks or fringe elements at all. Rather, their publications may be indicators of future Chinese programs that are veiled today,” he said.

For example, reports of China’s development of a high-tech ballistic-missile design to attack aircraft carriers first surfaced 15 years ago but were dismissed by many analysts as implausible. U.S. naval intelligence sources, however, expect China to conduct a flight test soon of the new missile that increases the threat to U.S. warships in the western Pacific.

Adm. Robert Willard, the new commander of the U.S. Pacific Command, added fuel to the debate last fall by highlighting intelligence shortfalls on Beijing’s arms buildup. He told reporters that for more than a decade China “exceeded most of our intelligence estimates of their military capability.”

Earlier this year, Adm. Willard questioned Chinese assertions about a peaceful rise, saying they are “difficult to reconcile with new military capabilities that appear designed to challenge U.S. freedom of action in the region and, if necessary, enforce China’s influence over its neighbors.” He told the House Armed Services Committee Jan. 13 that the Chinese military buildup was “aggressive.”

For years, senior U.S. civilian and military officials, including Defense Secretary Robert M. Gates, have stated in public that they do not consider China a “threat” or an “enemy.”

Yet military statements like those of Col. Liu are making it difficult to continue those claims.

“I don’t think anyone who reads Col. Liu’s work can honestly deny that it reflects a consensus mindset in the Chinese military and political leadership,” said John Tkacik, a former State Department China hand.

“There’s no question that Col. Liu and other very influential and like-minded strategists … are psychologically preparing the People’s Liberation Army for confrontation with the United States.”

Richard Fisher, a China military analyst with the International Assessment and Strategy Center, said Col. Liu’s book has helped the debate by “piercing the Beijing-Washington propaganda continuum of China’s ‘benign intent.’”

Chinese Embassy spokesman Wang Baodong did not address the Chinese military statements but said Chinese leaders have said repeatedly that China seeks peaceful development. “China pursues a national defense policy of [a] defensive nature, will not engage … in any arms race, and will never seek hegemony,” he said.

March 5 (Bloomberg) — Steelmakers in China, the world’s biggest buyer of iron ore, may have to accept a price increase higher than the 20 percent they expected for this year, Angang Steel Co. said.

“The price talks aren’t optimistic,” Chairman Zhang Xiaogang said in Beijing today while attending the National People’s Congress. Angang Steel is China’s biggest Hong Kong- listed steelmaker.

Contract iron ore prices may soar by 60 percent this year as demand from steelmakers increase with the global economic recovery, Morgan Stanley said this month. Chinese steelmakers in 2009 failed in their attempt to cut prices by more than 33 percent in talks with suppliers including Rio Tinto Group.

China, the world’s largest steelmaker, may add 50 million tons of steel capacity this year, Zhang also said. The nation produced a record 568 million metric tons of steel last year, spurred by government spending.

Angang plans to increase output of auto steel to 2.5 million tons in 2010, up from 1.7 million tons a year ago, Zhang said. The steelmaker also plans to boost production of silicon steel, he said.

–Helen Yuan and Feiwen Rong. Editors: Tan Hwee Ann, Indranil Ghosh.

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

BEIJING — Prime Minister Wen Jiabao crafted a portrait of a China on a steady course toward greatness on Friday, telling his nation’s unelected legislature that the government could expand social spending, increase lending, pour money into strategic industries and still meet its traditional 8 percent economic growth target in 2010.

But he also sounded a cautionary note, warning that the nation faced structural economic and social problems, and that China still confronts “a very complex situation” in the wake of last year’s global financial collapse.

Delivering his annual work report to China’s unelected legislature, the National People’s Congress, Mr. Wen said that “destabilizing factors and uncertainties” in the world economy posed a challenge to China’s continued growth. But he affirmed that China’s plan to slowly wind down last year’s large economic stimulus program, which spared China the worst of the recession, would continue unchanged.

Economic and political analysts had anticipated little new in Mr. Wen’s annual address, given that he and president Hu Jintao will leave power in 2012, and China’s opaque politics allow little room for fresh initiatives.

“There’s no surprise here,” Tao Wang, an economist for UBS Securities in Beijing, said in an interview after Mr. Wen’s address. “This has been the working assumption for a long time.”

Mr. Wen’s 35-page speech, the rough equivalent of an American State of the Union address, was a litany of statistics aimed at underscoring the government’s successful policies, swathed in boilerplate assertions of arduous struggle and glorious achievement.

Like many political documents, the report presents a rosy picture of China’s achievements and ambitions, occasionally at odds with conventional wisdom. Mr. Wen pledged, for example, that the government would “give high priority to protecting the cultural heritage of ethnic minorities and the ecosystems in ethnic minority areas,” one of many passages dedicated to the need to unite China’s 56 ethnic groups under one national banner.

But government policies toward ethnic Muslims in western Xinjiang region are widely credited with contributing to riots there last year, and the government is currently razing the region’s greatest cultural treasure — the thousand-year-old Silk Road center of Kashgar — to erect apartment blocks.

That said, few would contest Mr. Wen’s boasts of China’s economic achievements. While the rest of the world struggled, China managed an 8.7 percent rise in its gross domestic product last year, capped by 10.7 percent growth in 2009’s last quarter. Many economists, including Ms. Wang, predict that China will easily beat its goal of 8 percent growth this year.

The impressive numbers. Mr. Wen stated, are testament to the advantages of a government that need not consult with political factions or voters to take sweeping action.

“At the same time as we keep our reforms oriented toward a market economy, let market forces play their basic role in allocating resources and stimulate the market’s vitality,” he said, “we must make best use of the socialist system’s advantages, which enable us to make decisions ef{filig}ciently, organize effectively and concentrate resources to accomplish large undertakings.”

But Mr. Wen’s address also warned of problems in China’s booming economy that some experts say could hamstring future growth if they are not quickly addressed.

He pledged to clamp down on speculative real-estate purchases that some analysts say are created a bubble in China’s housing market, and said the state would take measures to rein in an explosive rise in urban land prices.

Speculation is both an economic bane and a political one: soaring land prices in urban areas have made homes unaffordable for many in China’s emerging middle class, and low-income residents in big cities have been hit with waves of evictions by both private and government speculators that have bought up their properties.

Mr. Wen also warned that some Chinese industries, fed a diet of easy money and loose regulation, had developed serious overcapacity problems.

And even as he committed to boost the nation’s money supply by 17 percent in 2010, increasing lending by $1.1 trillion, Mr. Wen warned that “latent risks in the banking and public finance sectors are increasing.” Some more skeptical economists have argued that China’s flood of lending during the recession will create a mountain of bad debt that will hamstring future growth.

Mr. Wen said the government will run a $154 billion budget deficit in 2010, in line with economists’ expectations. As a share of gross domestic product, the projected deficit is unchanged from last year.

Over all, spending will rise about 11.4 percent this year, half the increase during last year’s recession.

Beyond economics, Mr. Wen’s speech laid out a familiar blueprint for raising China from a developing nation into the top ranks of the developed world. Last year, he said, the government’s stimulus measures helped increase auto sales by 46.2 percent, housing by 42.1 percent, as measured in square meters, and retail sales of consumer goods by 16 percent.

He recited a series of often-staggering numbers to highlight the country’s rapid development: 800,000 aged homes were renovated in 2009; 165,000 miles of power lines were upgraded; 3,450 miles of new rail lines were laid; 2,900 miles of new freeways were opened; 35 airports were either built from scratch or renovated.

Mr. Wen said the government had dramatically increased spending on low-income housing, pensions, education and health care, and that the increases would continue in 2010. The government will take new steps to recruit top-level educators to China, to improve teacher training and to direct talented teachers to impoverished rural areas, he said.

Mr. Wen also said that China would pour money into strategic industries, boosting research and development and infrastructure spending to “capture the economic, scientific and technological high ground.” Among the areas he singled out were biomedicine, energy conservation, information technology and high-end manufacturing.

In a bow to China’s status as the world’s single largest polluter, Mr. Wen also pledged to increase environmental protection measures, planting nearly 23,000 square miles of new forests, expanding sewage treatment and clean drinking-water programs, and retrofitting coal-burning power plants with advanced machinery to cut emissions.