While Iraq and Iran are centres for the Bush administration’s foreign policy, the most significant relationship for the US in the coming decade may be that with China.

China in recent years has achieved incredible economic development. It has launched a vigorous new diplomatic campaign, not the least to tie up new sources of oil for its growing needs. It is now the world’s second-largest consumer and third-largest importer of oil. It has become a major player on the world stage. Its communist leaders assert that its new international prominence is all part of what it calls its “Peaceful Development Road” policy. But it has also been building up its military power. Small wonder, then, that US-China watchers are paying special attention to the release last week of the Pentagon’s annual report to Congress on the state of China’s military.

The report finds the People’s Liberation Army transforming itself from a mass army designed for protracted wars of attrition to a more modern force capable of fighting short-duration, high-intensity conflicts against high-tech adversaries. China’s ability to sustain military power at a distance is limited. But the Pentagon assessment says that China has the “greatest potential to compete militarily with the US and field disruptive military technologies that could over time offset traditional US military advantages.”

This new build-up has troubled US Defence Secretary Donald Rumsfeld who pondered publicly last year: “Why this growing investment? Why these continuing large and expanding arms purchases?” The Pentagon claims there is a lack of transparency about Chinese intentions and believes actual Chinese expenditure on military programmes is between two and three times greater than officially disclosed figures.

The latest Pentagon assessment is that in the near-term, China’s military build-up is probably focused on preparing for “Taiwan Strait contingencies, including the possibility of US intervention.” China has deployed more than 700 mobile and short-range ballistic missiles in its garrisons opposite Taiwan, and has boosted its ground-force military personnel in the three military regions opposite Taiwan to 400,000. The US treads a delicate path in the region. On the one hand, it recognises mainland China and has extensive trade and economic relations with Beijing. But on the other hand, it has emotional and defence commitments to Taiwan.

The report also chronicles China’s development of intercontinental-range ballistic missiles, which can target most of the world, including the continental US. These are supplemented by new submarine-launched ballistic missiles.

Meanwhile, Bush finds China helpful in attempting to contain North Korea’s nuclear ambitions, but less helpful in taking the same tack with Iran, with which China has significant economic ties. Bush also has constituents at home who remain suspicious of China, and he may recently have been shoring up India as a counterbalance to China in Asia. — The Christian Science Monitor