J-10
08-28-2004, 11:22 AM
Jane Perlez/NYT NYT Saturday, August 28, 2004
NEWMAN, Australia Chris Dunbar watched as a front-end loader carved into a 20-meter wall of iron ore glinting in the red dirt of a vast, open mine in the Big Sky country of northwestern Australia. “This is as good as it gets," said a satisfied Dunbar, 47, a manager with more than 20 years of experience.
.
He was boasting about the richness of the blue-black ore at the Mount Whaleback mine, but he might as well have been bragging about the boom that has propelled economies across the Asia Pacific region.
.
These days, Australian engineers - like executives, merchants and manufacturers elsewhere in the region - cannot seem to work fast enough to satisfy the hunger of their biggest new customer: China.
.
Not long ago Australia and China regarded each other with suspicion. But through newfound diplomatic finesse and the seemingly irresistible lure of its long economic expansion, Beijing has skillfully turned around relations with Australia, America's staunchest ally in the region.
.
The turnabout is just one sign of the broad new influence Beijing has accumulated with American friends and foes alike. From the mines of Newman - an outpost of 3,000 in a corner of the outback otherwise dotted with eucalyptus and kangaroos - to the prized forests of Myanmar, the former Burma, China's rapid growth is sucking up resources and pulling the region's varied economies in its wake. The effect is unlike anything since the rise of Japanese economic power after World War II. For now, China's presence mostly translates into money, and the doors it opens. But more and more, China is leveraging its economic clout to support its political preferences.
.
Beijing is pushing for regional political and economic groupings it can dominate, like a proposed East Asia Community that would cut out the United States and create a global bloc to rival the European Union.
.
It is dispersing aid and, in ways not seen before, pressing countries to fall in line on its top foreign policy priority: its claim over Taiwan.
.
China's higher profile is all the more striking, analysts, executives and diplomats say, as Washington's preoccupation with Iraq and terrorism has left it seemingly disengaged from the region, which in turn has found the United States more off-putting and harder to penetrate since Sept. 11, 2001.
.
American military supremacy remains unquestioned, regional officials say. But the United States appears to be on the losing side of trade patterns. China is now South Korea's biggest trade partner, and two years ago Japan's imports from China surpassed those from the United States.
.
Current trends show China is likely to top American trade with Southeast Asia in just a few years. China's prime minister, Wen Jiabao, as much as threw down the gauntlet late last year, saying he believed that China's trade with Southeast Asia would reach $100 billion by 2005, just shy of the $120 billion in trade the United States does with the region.
.
Wen's claim was no idle boast. Almost no country has escaped the pull of China's enormous craving for trade and, above all, energy and other natural resources to fuel its still galloping expansion and growing consumer demand. Though the Chinese government's growth target for 2004 is 7 percent, compared with 9.1 percent for 2003, few are worried about a slowdown soon.
.
In Thailand, where the United States maintains its second largest embassy, Prime Minister Thaksin Shinawatra, who is of ethnic Chinese descent, is considering building a pipeline across the southern Isthmus of Kra that would give China quicker access to Middle East oil.
.
In Malaysia, where exports of gas, palm oil and mid-range electronics to China have soared, the new prime minister, Abdullah Badawi, chose to make his first major overseas visit to China. He was accompanied by an entourage of 800 business executives.
.
In Myanmar, China is striking multimillion-dollar trade deals and flooding local markets with consumer products, undercutting Washington's effort to isolate one of the world's most repressive governments.
.
Chinese executives and diplomats, sensing the advantage that comes with riding one of the world's fastest-growing economies, have extended their reach to the point that China is increasingly seen as the go-to neighbor, regional diplomats and other analysts say.
.
Many already contend the future belongs to China. A new generation of political and business leaders is placing its bets now on what is nearly universally seen as China's rise - and hedging against a possible waning of American influence.
.
On campuses, students view Chinese universities as an alternative to studies in the United States, as they seek to make connections and understand a nation that they see becoming a central force in their lives.
.
Even as America's position erodes, its approach and policies - on Iraq, North Korea, weapons proliferation - have tended to push China and its neighbors together.
.
Not least among the shared interests is a “mutual concern about the unilateralism" of current American policy, said Muhammad Noordin Sopiee, chairman of Malaysia's Institute of Strategic and International Studies.
.
“They need regional friendship, we need regional friendship," he said of the Chinese. “They need time to develop their economy; so do we. They need protection from the United States, and so do we."
.
“Sometimes you see the glint of steel," he added of the Chinese approach, “But they hide it. The smile is dominant. They want to be friends."
.
China's rapid gain in influence in the Asia Pacific region ranges so broadly that it can be measured at the extremes.
.
The military government of Myanmar is no favorite of Washington. The Bush administration has tried since last year to use trade sanctions to coerce Myanmar's generals to share power and release the opposition leader, Aung San Suu Kyi, from house arrest.
.
But the logic of the sanctions did not impress even a local Burmese restaurant owner on the road from Mandalay to China. With ceiling fans powered by scarce electricity whirring gently, he drew a rough map of Myanmar on a bare wood tabletop for a recent visitor. India, Thailand, Laos, China, he said, pointing to the neighbors.
.
“As long as China remains friendly, nothing will change,” said the man, who did not want to be named for fear of Myanmar's ruthless military intelligence service. “China can provide everything the country needs, from a needle to a nuclear bomb,” he said.
.
China has in fact capsized Washington's policy with its own trade deals, which far outweigh the value of the American penalties.
.
The State Department estimates that Myanmar lost about $200 million in the first year of the ban on imports to the United States. At the same time, it said, trade between China and Mynamar amounted to about $1 billion in 2003.
.
Here is where economic leverage translates into political preference. For China, Myanmar provides access to the Indian Ocean and is too important as a gateway to energy and other natural resources to be thrown overboard. Not only has China offset the American sanctions and kept Myanmar afloat with easy credit and trade, but it has taken Myanmar's military leaders under its wing.
.
China's deputy prime minister, Wu Yi, during a visit this spring to Myanmar's capital, Yangon, formerly Rangoon, pledged to expand trade to $1.5 billion in 2005.
.
In July, Myanmar's recently installed prime minister, Khin Nyunt, paid an eight-day visit to China, where he was treated like an old friend. He returned with a raft of accords on new railways, a fertilizer factory and mine exploration.
.
High on the list were a $150 million loan for telecommunications and a $94 million rescheduling of debts - relatively small amounts that show how easy it has become for China to serve as Myanmar's patron.
.
Chinese officials have also been willing to finance vital hydroelectric dam projects amply in the absence of lenders from anywhere else. And they recently proposed that a pipeline be built from Sittwe, a port on Myanmar's west coast, to Kunming, the capital of China's southwestern Yunnan Province, allowing China more direct access to Middle East oil than the current route by ship through the Malacca Straits.
.
Closer to the border, the trade is in smuggled teak, a wood prized for its beauty and durability by China's surging furniture manufacturers.
.
“China needs Burma's natural resources to fuel development on the border and in Yunnan Province as a whole,” Simon Phillips, the author of a report on the trade published last year for Global Witness, a British nongovernmental organization, said in an interview.
.
After China imposed a ban on logging on its side of the border in 1998, Chinese companies moved their workers - tens of thousands of them - into Myanmar, he said. With the backing of political patrons in the Myanmar military and in separatist militias, the loggers carried on their work with impunity, often using elephants to drag the huge logs out of the difficult forest terrain.
.
One of the most important highways that China has helped improve is the main artery from the border to Yangon. These days, the traffic is varied.
.
Huge trucks, many of them 40-year-old hulks with exposed engines, still haul outsized teak logs to China. Smaller vans, piled with crates of live crabs from Myanmar's Indian Ocean ports, ply a profitable 48-hour journey delivering delicacies for Chinese epicures.
.
A few months ago, one resident said, the trade included wild frangipani trees plucked from the forests around Hsipaw so they could be cultivated in time for decoration at the 2008 Beijing Olympics.
.
From China, a vast assortment of cheap consumer goods for local markets comes down the road, particularly to Lashio. On a recent day, the city market was packed with Chinese electronics, clothes and food.
.
“Myanmar is the resource pit of China,” the restaurant owner lamented. “We send our best wood to them, our best gems, our best fruit. What do we get? Their worst fruit and their cheapest products."
.
For executives at BHP Billiton, the Australian giant that is the world's largest mining company and the operator of the Mount Whaleback mine, it has been a very good year. China has made all the difference.
.
Profits were up nearly 80 percent, the company reported in August, much of the growth riding on new orders from the Chinese steel mills that cast girders for the skyscrapers that dot China's urban expansion.
.
Chinese diplomats talk of the natural fit between the two countries: Last year China became the world's biggest importer of iron ore, and Australia is its second biggest producer.
.
With orders from China surging, BHP Billiton executives say they are opening mines and expanding their overburdened rail and shipping facilities at Port Hedland, on the northwest coast. On a recent day, no fewer than 13 ships waited to berth and load with ore for the 10-day journey to China.
.
Doug Trotter, a project geologist who works at a new BHP Billiton mine called Area C, 100 miles east of Mount Whaleback, called that kind of demand “job security."
.
“They originally planned that this plant would produce four million tons of ore next year,” he said. “Instead, we expect to produce 20 million in 2005."
.
Demand is so great, in fact, that Chinese steel mills, in addition to buying the high-grade ore at Mount Whaleback, are taking a far lower grade that was considered unusable 20 years ago.
.
“Technical changes in steel making make it possible to use this ore," Trotter said, “and Australian technical people are in China showing them how to use it."
.
Even more of a bonanza is China's demand for natural gas - which China says it will use to start replacing coal.
.
In the richest trade deal in Australian history, sealed after Prime Minister John Howard personally lobbied officials in Beijing, the Chinese agreed to buy a 25-year supply of liquid natural gas from an Australian company, Woodside Energy, for $25 billion.
.
The Australians beat Qatar and Indonesia in the bidding, even though Australia's price was higher, because they could better guarantee a secure supply, said Lucio Della Martina, general manager for marketing at Woodside. The gas will start being delivered to China in 2006, or whenever the Chinese finish building a receiving terminal in Guangdong.
.
Huge as the deal was, negotiations are already under way for a still bigger deal - valued at $30 billion - for gas at a deposit called Gorgon, also off Western Australia.
.
Whether in natural gas or iron ore, Australian sensitivities about foreign ownership of natural resources have been outweighed by the sheer size of the Chinese contracts.
.
At BHP Billiton's headquarters in downtown Perth, where recent gifts from Chinese delegations are displayed alongside older ones from Japan and South Korea, Graeme Hunt, president of the iron ore division, said the company had even invited Chinese mills to take a 40 percent stake in another iron ore mine, at Jimblebar, 30 miles east of Mount Whaleback.
.
The Chinese mills, he said, want a secure long-term supply and signed on for 25 years for an estimated $9 billion worth of ore.
.
A slowdown in the Chinese economy and slackening of demand was not a worry, Hunt said.
.
“We're still very confident,” he said. “China is the fourth largest car producer in the world, but most people still don't have a car. There's still a long way to go before the average Chinese person has all the material things of life.”
.
Just how American allies balance their strategic relationship with America against the economic opportunities offered by China is fast becoming a front-burner issue. America's friends see a difficult balancing act ahead.
.
Among the most nervous is Singapore. China publicly scolded the new prime minister of Singapore, Lee Hsien Loong, before his inauguration this month, for visiting Taiwan, where Singapore trains its soldiers, even though his father, Lee Kwan Yew, had visited Taiwan many times. China said it would delay trade talks as a punishment.
.
The gravity of the threat was not lost on Lee. In his first major speech, he hastily reaffirmed Singapore's support for a “one China” policy on Taiwan.
.
For his part, Howard, the conservative Australian prime minister, boasted in August that one of his “great successes” was building a “very close relationship” with China while strengthening ties with Washington. He was proud, he said, that he had given symbolic parity to President George W. Bush and the Chinese president, Hu Jintao, by arranging for them to speak on consecutive days last fall before Parliament - where Hu was given a warmer reception.
.
This month, Foreign Minister Alexander Downer said Australia, which has been a stalwart American ally on Iraq, would have great reservations about joining the United States if a conflict broke out over Taiwan. Howard had to move quickly to set the record straight, dressing down his foreign minister by saying the remarks were “completely hypothetical."
.
Some in the Howard government are beginning to worry that Australia may not long be able to have its cake and eat it too when it comes to China and Taiwan. Most countries in the region, like Thailand, are already on board with China's claim to sovereignty over Taiwan.
.
During his speech to the Australian Parliament last October, the Chinese president urged Australia to help seek a solution to the Taiwan question - a point interpreted in Canberra as pressing Australia to choose.
.
Some high-level American officials warn the Bush administration that the United States is losing its once invulnerable position in Asia. James Kelly, the assistant secretary of state for East Asia and the Pacific, in unusually blunt testimony before Congress in June, listed Beijing's aggressive diplomatic moves and said they were being used to strengthen China's economic gains.
.
Charlene Barshefsky, the U.S. trade representative in the Clinton administration, has warned that China's rise as the customer of choice in Asia is likely to diminish American influence in the region.
.
Even if American officials have trained most of their energies and attention elsewhere after Sept. 11, the diplomates of China's new generation, like its ambassador to Australia, Fu Ying, are keenly attuned to the potential tug of competing allegiances, and seem prepared to plug any gaps.
.
Fu, considered one of China's most accomplished diplomats, was sent to Canberra a few months ago to lock in Australia's energy resources. She is succeeding, and noted that, even while the economic relationship brings the two countries closer, differences remain.
.
“When you had this kind of relationship with Japan, you were from the same side of the fence,” she said in an interview with an influential Australian newspaper, The Sydney Morning Herald. “No ideological barriers whatsoever. With China it is different."
.
“Do you understand China that well?" she asked. “And does China understand Australia that well?"
.
Those questions remain to be answered.
.
The New York Times
the International Herald Tribune (http://www.iht.com/articles/536237.html)
NEWMAN, Australia Chris Dunbar watched as a front-end loader carved into a 20-meter wall of iron ore glinting in the red dirt of a vast, open mine in the Big Sky country of northwestern Australia. “This is as good as it gets," said a satisfied Dunbar, 47, a manager with more than 20 years of experience.
.
He was boasting about the richness of the blue-black ore at the Mount Whaleback mine, but he might as well have been bragging about the boom that has propelled economies across the Asia Pacific region.
.
These days, Australian engineers - like executives, merchants and manufacturers elsewhere in the region - cannot seem to work fast enough to satisfy the hunger of their biggest new customer: China.
.
Not long ago Australia and China regarded each other with suspicion. But through newfound diplomatic finesse and the seemingly irresistible lure of its long economic expansion, Beijing has skillfully turned around relations with Australia, America's staunchest ally in the region.
.
The turnabout is just one sign of the broad new influence Beijing has accumulated with American friends and foes alike. From the mines of Newman - an outpost of 3,000 in a corner of the outback otherwise dotted with eucalyptus and kangaroos - to the prized forests of Myanmar, the former Burma, China's rapid growth is sucking up resources and pulling the region's varied economies in its wake. The effect is unlike anything since the rise of Japanese economic power after World War II. For now, China's presence mostly translates into money, and the doors it opens. But more and more, China is leveraging its economic clout to support its political preferences.
.
Beijing is pushing for regional political and economic groupings it can dominate, like a proposed East Asia Community that would cut out the United States and create a global bloc to rival the European Union.
.
It is dispersing aid and, in ways not seen before, pressing countries to fall in line on its top foreign policy priority: its claim over Taiwan.
.
China's higher profile is all the more striking, analysts, executives and diplomats say, as Washington's preoccupation with Iraq and terrorism has left it seemingly disengaged from the region, which in turn has found the United States more off-putting and harder to penetrate since Sept. 11, 2001.
.
American military supremacy remains unquestioned, regional officials say. But the United States appears to be on the losing side of trade patterns. China is now South Korea's biggest trade partner, and two years ago Japan's imports from China surpassed those from the United States.
.
Current trends show China is likely to top American trade with Southeast Asia in just a few years. China's prime minister, Wen Jiabao, as much as threw down the gauntlet late last year, saying he believed that China's trade with Southeast Asia would reach $100 billion by 2005, just shy of the $120 billion in trade the United States does with the region.
.
Wen's claim was no idle boast. Almost no country has escaped the pull of China's enormous craving for trade and, above all, energy and other natural resources to fuel its still galloping expansion and growing consumer demand. Though the Chinese government's growth target for 2004 is 7 percent, compared with 9.1 percent for 2003, few are worried about a slowdown soon.
.
In Thailand, where the United States maintains its second largest embassy, Prime Minister Thaksin Shinawatra, who is of ethnic Chinese descent, is considering building a pipeline across the southern Isthmus of Kra that would give China quicker access to Middle East oil.
.
In Malaysia, where exports of gas, palm oil and mid-range electronics to China have soared, the new prime minister, Abdullah Badawi, chose to make his first major overseas visit to China. He was accompanied by an entourage of 800 business executives.
.
In Myanmar, China is striking multimillion-dollar trade deals and flooding local markets with consumer products, undercutting Washington's effort to isolate one of the world's most repressive governments.
.
Chinese executives and diplomats, sensing the advantage that comes with riding one of the world's fastest-growing economies, have extended their reach to the point that China is increasingly seen as the go-to neighbor, regional diplomats and other analysts say.
.
Many already contend the future belongs to China. A new generation of political and business leaders is placing its bets now on what is nearly universally seen as China's rise - and hedging against a possible waning of American influence.
.
On campuses, students view Chinese universities as an alternative to studies in the United States, as they seek to make connections and understand a nation that they see becoming a central force in their lives.
.
Even as America's position erodes, its approach and policies - on Iraq, North Korea, weapons proliferation - have tended to push China and its neighbors together.
.
Not least among the shared interests is a “mutual concern about the unilateralism" of current American policy, said Muhammad Noordin Sopiee, chairman of Malaysia's Institute of Strategic and International Studies.
.
“They need regional friendship, we need regional friendship," he said of the Chinese. “They need time to develop their economy; so do we. They need protection from the United States, and so do we."
.
“Sometimes you see the glint of steel," he added of the Chinese approach, “But they hide it. The smile is dominant. They want to be friends."
.
China's rapid gain in influence in the Asia Pacific region ranges so broadly that it can be measured at the extremes.
.
The military government of Myanmar is no favorite of Washington. The Bush administration has tried since last year to use trade sanctions to coerce Myanmar's generals to share power and release the opposition leader, Aung San Suu Kyi, from house arrest.
.
But the logic of the sanctions did not impress even a local Burmese restaurant owner on the road from Mandalay to China. With ceiling fans powered by scarce electricity whirring gently, he drew a rough map of Myanmar on a bare wood tabletop for a recent visitor. India, Thailand, Laos, China, he said, pointing to the neighbors.
.
“As long as China remains friendly, nothing will change,” said the man, who did not want to be named for fear of Myanmar's ruthless military intelligence service. “China can provide everything the country needs, from a needle to a nuclear bomb,” he said.
.
China has in fact capsized Washington's policy with its own trade deals, which far outweigh the value of the American penalties.
.
The State Department estimates that Myanmar lost about $200 million in the first year of the ban on imports to the United States. At the same time, it said, trade between China and Mynamar amounted to about $1 billion in 2003.
.
Here is where economic leverage translates into political preference. For China, Myanmar provides access to the Indian Ocean and is too important as a gateway to energy and other natural resources to be thrown overboard. Not only has China offset the American sanctions and kept Myanmar afloat with easy credit and trade, but it has taken Myanmar's military leaders under its wing.
.
China's deputy prime minister, Wu Yi, during a visit this spring to Myanmar's capital, Yangon, formerly Rangoon, pledged to expand trade to $1.5 billion in 2005.
.
In July, Myanmar's recently installed prime minister, Khin Nyunt, paid an eight-day visit to China, where he was treated like an old friend. He returned with a raft of accords on new railways, a fertilizer factory and mine exploration.
.
High on the list were a $150 million loan for telecommunications and a $94 million rescheduling of debts - relatively small amounts that show how easy it has become for China to serve as Myanmar's patron.
.
Chinese officials have also been willing to finance vital hydroelectric dam projects amply in the absence of lenders from anywhere else. And they recently proposed that a pipeline be built from Sittwe, a port on Myanmar's west coast, to Kunming, the capital of China's southwestern Yunnan Province, allowing China more direct access to Middle East oil than the current route by ship through the Malacca Straits.
.
Closer to the border, the trade is in smuggled teak, a wood prized for its beauty and durability by China's surging furniture manufacturers.
.
“China needs Burma's natural resources to fuel development on the border and in Yunnan Province as a whole,” Simon Phillips, the author of a report on the trade published last year for Global Witness, a British nongovernmental organization, said in an interview.
.
After China imposed a ban on logging on its side of the border in 1998, Chinese companies moved their workers - tens of thousands of them - into Myanmar, he said. With the backing of political patrons in the Myanmar military and in separatist militias, the loggers carried on their work with impunity, often using elephants to drag the huge logs out of the difficult forest terrain.
.
One of the most important highways that China has helped improve is the main artery from the border to Yangon. These days, the traffic is varied.
.
Huge trucks, many of them 40-year-old hulks with exposed engines, still haul outsized teak logs to China. Smaller vans, piled with crates of live crabs from Myanmar's Indian Ocean ports, ply a profitable 48-hour journey delivering delicacies for Chinese epicures.
.
A few months ago, one resident said, the trade included wild frangipani trees plucked from the forests around Hsipaw so they could be cultivated in time for decoration at the 2008 Beijing Olympics.
.
From China, a vast assortment of cheap consumer goods for local markets comes down the road, particularly to Lashio. On a recent day, the city market was packed with Chinese electronics, clothes and food.
.
“Myanmar is the resource pit of China,” the restaurant owner lamented. “We send our best wood to them, our best gems, our best fruit. What do we get? Their worst fruit and their cheapest products."
.
For executives at BHP Billiton, the Australian giant that is the world's largest mining company and the operator of the Mount Whaleback mine, it has been a very good year. China has made all the difference.
.
Profits were up nearly 80 percent, the company reported in August, much of the growth riding on new orders from the Chinese steel mills that cast girders for the skyscrapers that dot China's urban expansion.
.
Chinese diplomats talk of the natural fit between the two countries: Last year China became the world's biggest importer of iron ore, and Australia is its second biggest producer.
.
With orders from China surging, BHP Billiton executives say they are opening mines and expanding their overburdened rail and shipping facilities at Port Hedland, on the northwest coast. On a recent day, no fewer than 13 ships waited to berth and load with ore for the 10-day journey to China.
.
Doug Trotter, a project geologist who works at a new BHP Billiton mine called Area C, 100 miles east of Mount Whaleback, called that kind of demand “job security."
.
“They originally planned that this plant would produce four million tons of ore next year,” he said. “Instead, we expect to produce 20 million in 2005."
.
Demand is so great, in fact, that Chinese steel mills, in addition to buying the high-grade ore at Mount Whaleback, are taking a far lower grade that was considered unusable 20 years ago.
.
“Technical changes in steel making make it possible to use this ore," Trotter said, “and Australian technical people are in China showing them how to use it."
.
Even more of a bonanza is China's demand for natural gas - which China says it will use to start replacing coal.
.
In the richest trade deal in Australian history, sealed after Prime Minister John Howard personally lobbied officials in Beijing, the Chinese agreed to buy a 25-year supply of liquid natural gas from an Australian company, Woodside Energy, for $25 billion.
.
The Australians beat Qatar and Indonesia in the bidding, even though Australia's price was higher, because they could better guarantee a secure supply, said Lucio Della Martina, general manager for marketing at Woodside. The gas will start being delivered to China in 2006, or whenever the Chinese finish building a receiving terminal in Guangdong.
.
Huge as the deal was, negotiations are already under way for a still bigger deal - valued at $30 billion - for gas at a deposit called Gorgon, also off Western Australia.
.
Whether in natural gas or iron ore, Australian sensitivities about foreign ownership of natural resources have been outweighed by the sheer size of the Chinese contracts.
.
At BHP Billiton's headquarters in downtown Perth, where recent gifts from Chinese delegations are displayed alongside older ones from Japan and South Korea, Graeme Hunt, president of the iron ore division, said the company had even invited Chinese mills to take a 40 percent stake in another iron ore mine, at Jimblebar, 30 miles east of Mount Whaleback.
.
The Chinese mills, he said, want a secure long-term supply and signed on for 25 years for an estimated $9 billion worth of ore.
.
A slowdown in the Chinese economy and slackening of demand was not a worry, Hunt said.
.
“We're still very confident,” he said. “China is the fourth largest car producer in the world, but most people still don't have a car. There's still a long way to go before the average Chinese person has all the material things of life.”
.
Just how American allies balance their strategic relationship with America against the economic opportunities offered by China is fast becoming a front-burner issue. America's friends see a difficult balancing act ahead.
.
Among the most nervous is Singapore. China publicly scolded the new prime minister of Singapore, Lee Hsien Loong, before his inauguration this month, for visiting Taiwan, where Singapore trains its soldiers, even though his father, Lee Kwan Yew, had visited Taiwan many times. China said it would delay trade talks as a punishment.
.
The gravity of the threat was not lost on Lee. In his first major speech, he hastily reaffirmed Singapore's support for a “one China” policy on Taiwan.
.
For his part, Howard, the conservative Australian prime minister, boasted in August that one of his “great successes” was building a “very close relationship” with China while strengthening ties with Washington. He was proud, he said, that he had given symbolic parity to President George W. Bush and the Chinese president, Hu Jintao, by arranging for them to speak on consecutive days last fall before Parliament - where Hu was given a warmer reception.
.
This month, Foreign Minister Alexander Downer said Australia, which has been a stalwart American ally on Iraq, would have great reservations about joining the United States if a conflict broke out over Taiwan. Howard had to move quickly to set the record straight, dressing down his foreign minister by saying the remarks were “completely hypothetical."
.
Some in the Howard government are beginning to worry that Australia may not long be able to have its cake and eat it too when it comes to China and Taiwan. Most countries in the region, like Thailand, are already on board with China's claim to sovereignty over Taiwan.
.
During his speech to the Australian Parliament last October, the Chinese president urged Australia to help seek a solution to the Taiwan question - a point interpreted in Canberra as pressing Australia to choose.
.
Some high-level American officials warn the Bush administration that the United States is losing its once invulnerable position in Asia. James Kelly, the assistant secretary of state for East Asia and the Pacific, in unusually blunt testimony before Congress in June, listed Beijing's aggressive diplomatic moves and said they were being used to strengthen China's economic gains.
.
Charlene Barshefsky, the U.S. trade representative in the Clinton administration, has warned that China's rise as the customer of choice in Asia is likely to diminish American influence in the region.
.
Even if American officials have trained most of their energies and attention elsewhere after Sept. 11, the diplomates of China's new generation, like its ambassador to Australia, Fu Ying, are keenly attuned to the potential tug of competing allegiances, and seem prepared to plug any gaps.
.
Fu, considered one of China's most accomplished diplomats, was sent to Canberra a few months ago to lock in Australia's energy resources. She is succeeding, and noted that, even while the economic relationship brings the two countries closer, differences remain.
.
“When you had this kind of relationship with Japan, you were from the same side of the fence,” she said in an interview with an influential Australian newspaper, The Sydney Morning Herald. “No ideological barriers whatsoever. With China it is different."
.
“Do you understand China that well?" she asked. “And does China understand Australia that well?"
.
Those questions remain to be answered.
.
The New York Times
the International Herald Tribune (http://www.iht.com/articles/536237.html)