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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (6247)	5/12/2004 6:15:09 PM
From: TraderC	Read Replies (1) \| Respond to of 116555

Canberra's catch 22: the US or China theaustralian.news.com.au DESPITE US expectations, Australia would resist ANZUS treaty obligations and not offer military backing to a US war with Beijing over Taiwan, defence and China experts warned yesterday. But the Howard Government has not sent that message to Washington, with ties between Canberra and the US reaching a new high in the wake of the free trade deal and the war on terror. The Future Summit conference, sponsored by The Weekend Australian, was told yesterday that if China reacted to Taiwan's latest push for independence with an invasion and the US retaliated, this would be a "disaster" for Australia. Australia faced an unpalatable choice: say no to the US and "irreparably" damage the alliance, or say yes and have billions of dollars in investment in natural gas and resources wiped by China in a post-conflict phase. "I think Australians underestimate just how much our hopes for a peaceful and prosperous region are at risk if US-China relations crash over Taiwan," Australian Strategic Policy Institute director Hugh White warned. "United States decision-makers take it absolutely for granted that in a US-China conflict over Taiwan, Australia would provide active and concrete support, and they've got some reasons to think that," Mr White said. Article 4 of the ANZUS treaty obliged Australia to support the US in the event it had to go to Taiwan's aid. "In circumstances in which Taiwan had materially contributed to the crisis by what you might call conduct jeopardising the status quo, and that is by far the most likely situation ... I think even the Howard Government would be very reluctant to join (the US)." Mr White said he believed it would help US decision-making if Washington knew how strongly Australia wanted such a conflict avoided. Renewed fears of a flare-up over Taiwan have followed the re-election of President Chen Shui-bian's Democratic Progressive Party in March. Beijing fears a planned referendum on a new constitution pledged by Mr Chen could see Taipei move towards a declaration of independence. Australia adheres to a one-China policy that recognises Taiwan as part of China. Foreign Minister Alexander Downer has cautioned Taiwan against any push for independence that might provoke retaliation from Beijing. Australian National University Strategic and Defence Studies Centre advisory board chair Paul Dibb said none of Washington's other allies, including Japan, South Korea, India and Britain, would support a war against China. Professor Dibb said relations with the US could be damaged irreparably if Australia did not go to Taiwan's aid, but equally China would wipe off billions of dollars in Australian investment if Canberra were involved. Australia-China Business Council chairman - and former Howard government minister - Warwick Smith said Australia would risk its financial future in providing troops for such a conflict. "It's not a bad thing to say no sometimes," Mr Smith said.