Lord Palmerston once observed that "Britain has no permanent friends; she only has permanent interests," an observation that seems to be lost on the U.S. State Department when it comes to China.

The communist giant was America's implacable enemy from the Korean War through to the height of the Cultural Revolution, yet in 1972 became a de facto ally in a two-decade struggle to contain Soviet expansion. But despite the collapse of the Soviet Union in 1991, the tendency to see China as a "permanent friend" -- no matter what it does -- persists in the U.S. State Department.

In December 1945, U.S. President Harry Truman, facing a post-war China torn apart by a Soviet-fueled civil war, sent his revered army chief of staff, George Marshall, to mediate a settlement. Truman's letter of instruction to Gen. Marshall was a model of strategic concision. "A strong, united, and democratic China," he wrote, "is in the most vital interest of the United States and all the United Nations."

How times have changed since then. "America welcomes the emergence of a strong, peaceful and prosperous China," U.S. Secretary of State Colin Powell declared in an explication of the Bush administration's new China policy at Texas A&M University on Nov. 5. Somewhere in the 58 years since Truman's letter, the State Department has misplaced the word "democratic." Instead it has been replaced by an assumption among my former colleagues at the State Department that China has somehow become America's permanent friend, and mentioning democracy might offend it.

The venue for Mr. Powell's glowing account of U.S. relations with China was an all-star "Conference on China-U.S. Relations" hosted by former President George H.W. Bush, former Chinese Vice Premier Qian Qichen, and Henry Kissinger. The China that Mr. Powell described in his speech was one the State Department would like to see, not the real one. For example, Mr. Powell effused that "we are cooperating to send a concerted message to the leadership in Pyongyang that Pyongyang must comply with its international commitments, it must terminate its nuclear-weapons programs, promptly, verifiably and irreversibly."

The problem is that there has been no such "concerted message." The most Beijing will say is that China "favors a denuclearized Korean Peninsula" -- not a denuclearized North Korea -- while steadfastly refusing to acknowledge Pyongyang even has nuclear weapons. Moreover, the Chinese always hasten to add that denuclearization is not their top priority, rather it's resolving the nuclear issue peacefully and ensuring that Pyongyang's "legitimate security concerns" are met.

From China's perspective, the disaster-laden six-nation talks on the nuclear issue in Beijing in August -- between the two Koreas, the U.S., China, Japan and Russia -- were not an effort to move Pyongyang in Washington's direction, but rather to push Washington to meet Pyongyang's demands. That means guaranteeing the survival of the North Korean regime, keeping Japan muzzled about its kidnap victims, demanding diplomatic recognition from Washington and Tokyo, and above all, restraining any American moves to take North Korea's nuclear brinkmanship to the United Nations, and ultimately impose economic sanctions.

In fact, Beijing sees Washington rather than Pyongyang as the "main obstacle to peace." Chinese Vice Foreign Minister Wang Yi, who hosted the six-nation talks, went to Manila immediately afterwards and, on Sept. 1, blamed America for the lack of progress. Asked about the Chinese criticism, Mr. Powell simply denied this, saying, "I am quite sure the vice foreign minister was not resting the problem on the United States." In other words, a classic case of Stockholm Syndrome at the State Department -- in which the victim hears only what he wants to hear.

Mr. Powell's speech also laid it on a bit thick in recounting China's help in the War on Terror. After all, he must know as well as anyone else that China has voted with the U.S. on U.N. antiterror resolutions about as much as Syria, and no more. But that's not what he said. Instead Mr. Powell praised how China had supposedly "supported Operation Enduring Freedom in Afghanistan as we eliminated al Qaeda presence and the Taliban." That's despite the fact that evidence of such Chinese support is thin on the ground. I recall Beijing being adamantly opposed to the American campaign in Afghanistan, and can't find any written record to suggest otherwise.

The Chinese did "pledge" $150 million to Afghan reconstruction -- but no aid agency or the Afghan interim authority has seen the money. Beijing publicized a several million dollar hospital reconstruction project in Kabul last year, but the project was not managed by the United Nations or the Afghan interim authority. The fact is, no one outside China knows what funds, if any, China has actually given Kabul.

On Iraq, Mr. Powell was again full of praise, "in the difficult situation in Iraq, China has played a constructive role." That's a bit much to describe a nation which has made no secret of its wish to get the U.S. out of Iraq, talking repeatedly about the need for "Iraq's sovereignty to be returned to the Iraqi people." In practice, China has been no more helpful in the U.N. than France, Germany or Russia. But Mr. Powell is now a diplomat, hence this resort to diplo-babble.

Things got only marginally better when the subject turned to human rights. While Mr. Powell didn't exactly breathe fire, at least he reminded his audience that ordinary Chinese remain far from free. He described "how China's leaders respond to the aspirations of their own citizens" as a touchstone and added, "we, frankly, have been disappointed by China's backsliding." But then things got worse again, as Mr. Powell depicted China's suppression of basic civil liberties as nothing more than a difference between friends, "It is a reflection of the strength of our relationship that we can speak of these issues candidly and openly, and sometimes in a critical way. That is how real friends deal with each other. That is how real partners get along." That's probably the first time anyone in the Bush administration has called China a "partner," and certainly the first time they've done so in the context of human rights.

Only when Mr. Powell turned to Taiwan, did he start to make more sense. In probably the most important sentences of the speech, Mr. Powell was gratifyingly terse but firm, "we have to take note of the military buildup opposite Taiwan on the mainland because that sends a very different kind of signal. Whether China chooses peace or coercion to resolve its differences with Taiwan will tell us a great deal about the kind of role China seeks with its neighbors and seeks with us."

The annual Pentagon reports on the "Military Power of the PRC" show that China's military buildup speeds ahead, with Taiwan the primary target. At some point, it'll be necessary to face up to the fact that China's actions are sending the "different signal" that Mr. Powell warned about, and one which must guide U.S. interpretations of Beijing's intentions.

Which brings the issue back to America's vital interest in a "democratic" China. The Bush administration's China policy is in dire need of reassessment and that reassessment should begin by going back to the words of Truman's 1945 dictum. A "strong and unified" China, still less, a prosperous and powerful one, that is not democratic will be driven by the expansionist and aggressive tendencies that animate all dictatorships seeking legitimacy in the absence of popular sovereignty -- Argentina, Yugoslavia, Iraq, North Korea and the former Soviet Union all spring to mind.

That makes Mr. Powell's symbolic handshake with Chen Shui-bian, the president of democratic Taiwan, in Panama City last week all the more profound, even if he probably meant it as no more than good manners. More than anything else, a "democratic" China is in America's and the world's most vital interest. So too is Taiwan's everyday demonstration that democracy and Chinese culture are not only compatible, but can point the way to a China that would have far more claim to be America's permanent friend.

John Tkacik is a research fellow at the Heritage Foundation, and served in the foreign service in Beijing, Guangzhou, Hong Kong and Taipei.