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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (1705)	12/5/2003 4:38:07 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China ends two-flags tussle in Pacific By Mary-Louise O'Callaghan December 06, 2003 String 33 low-lying atolls over a part of the Pacific Ocean the size of the US and you have Kiribati, one of the tiniest nations in the world and as unlikely a setting for a geo-political power struggle as you could hope to find. Kiribati is so isolated and lacking in basic infrastructure it was even rejected as a possible venue for the detention of Australia's would-be refugees last year after offering to participate in Prime Minister John Howard's controversial Pacific Solution. But for the past three weeks this micro-state of 95,000 people, independent since 1979, has been at the centre of one of the most enduring games of international brinkmanship: the contest between the "two Chinas". For years the People's Republic of China has been slogging it out with Taiwan. What has made the Kiribati case so bizarre is the reluctance of China to up stakes and leave when the recently elected government of President Anote Tong announced last month that after 23 years of diplomatic relations with Beijing it would henceforth also recognise Taipei. For 21 days, this resulted in a unique "dual recognition" when, for the first time, the flags of both Chinas were flying from the same shore. This is not Beijing's usual way of playing the One China card. In 1998, when the neighbouring Marshall Islands made the same move, they packed up and left within days, taking their investments and aid agreements with them. But the Kiribati atoll of Tarawa is the nearest foreign point to the Kwajalein atoll in the Marshall Islands, where the US has possibly the world's largest military base for testing its son-of-Star-Wars missile systems. Since 1996 China has been paying the Kiribati Government a $US250,000 annual rent in return for placing their sole satellite tracking station at the southern end of Tarawa, from which it is alleged they were spying upon Kwajalein, 1000km away. Beijing, of course, strenuously denies this. On Thursday, unable to convince Kiribati to renounce its new-found friend, Beijing finally closed the doors of its embassy, dismantled the satellite station and pulled out of a considerable set of aid projects, including a hospital. The reason is money, but how much and for whom are the burning questions in Kiribati, where there have been demonstrations both for and against the policy change. They are questions that go to the heart of the dilemma facing most of Australia's smaller island neighbours: how to build a prosperous nation when all you have is a minuscule local market, limited economic opportunities, weak systems of governance and the constant shadow of corruption. Enter Taipei. Recognised by about only 30 countries at the UN, it has in recent years become a cashed-up, voracious and somewhat successful recruiter in the Pacific, where the Marshalls, Tuvalu, Palau and Solomon Islands now all accord it recognition. Last week the Kiribati Opposition tried unsuccessfully to establish a commission of inquiry into the switch after rumours that Tong's Boutokan te Koaua (Standing for the Truth) party received Taiwanese-sourced donations for its election campaign. Tong, of part-Chinese ancestry, has defended the change by linking it with a large increase in untied aid -- $1 million a year for four years -- promised by Taipei. "Our conclusion is that a change will bring more benefits and prosperity -- not to China or Taiwan -- but to our people," he said this week. theaustralian.news.com.au