CHINA is both a blessing and a bogy for its Asian neighbors.
Not unlike Japan, whose economic presence in the past fueled rapid growth around Asia, China now lures other countries with its booming economy and vast virgin market. But, also like Japan, economic opportunity in China has stirred unease over the emergence of an economically and military strong giant.
``We may be enjoying the boom now,'' says a senior Asian diplomat in Beijing, ``but in the long run, we are not without worries.'' Now that China has developed economically, he asks, where will it go from here? ``To defend such a prosperous area, any country would have to have some teeth.''
To the disquiet of its neighbors, China is already cutting its military teeth.
Ever since the Communist Party congress a year ago, which anointed China's moves toward a market economy, the military has been in the ascendancy.
On the one hand, a major military reshuffle has sidetracked hard-line Communist ideologues in the People's Liberation Army and bolstered professionally oriented officers intent on turning their once peasant Army into a technologically sophisticated fighting force.
On the other hand, military professionals have assumed a higher political profile as the ruling Communists brace for an uncertain transition following the death of ailing paramount leader Deng Xiaoping.
``Military participation has grown in the last year,'' says a Western diplomat in Beijing. ``Until we have a clear idea of who will succeed Deng Xiaoping, the military will play a key role.''
For its part, the US, which has been the foremost power in Asia for more than four decades, recently ended its ban on military contacts imposed following the Tiananmen Square crackdown in 1989 and decided to engage the Chinese in high level talks.
Charles Freeman, assistant secretary of defense for regional security, recently visited Beijing in what has been an ongoing effort by President Clinton to step up the level of US contacts with China and defuse sharp disputes over the sale of missiles to Pakistan and the inspection of the cargo ship Yinhe.
Mr. Freeman, who announced that the two countries will pursue talks over China's role in United Nations peacekeeping operations, is among a stream of visiting senior Clinton Administration officials, including Assistant Secretary of State for Human Rights John Shattuck, Agriculture Secretary Mike Espy, and trade representative Charlene Barshevsky.
Mr. Clinton's switch from confrontation to consultation will culminate in his meeting Nov. 19 with Chinese President Jiang Zemin at the Asia-Pacific Economic Cooperation forum in Seattle.
``This is the beginning of the turnaround. This is the beginning of getting things back on track,'' a Western diplomat says.
``The United States and China are like Siamese twins: you are there for good or bad and always operate together,'' an Asian diplomat says. ``But if you separate, there's always a risk.''
But as American dominance in the post-cold-war world devolves into several spheres of influence, the rest of Asia worries about being caught between two superpowers, China and the US.
Although Asia enjoys relative stability compared to the rest of the world, smaller countries still fret about East-West tensions and decreasing US military power in the region.
China's recent decision to end an informal world moratorium on nuclear testing highlights the problems.
Despite strong US pressure and Clinton's personal appeal for restraint, China resumed testing in early October, after more than a year, when it exploded a nuclear device in the western desert.
Regional analysts warned that the atomic test would stir new fears in Asia and hurt efforts to pressure North Korea into halting its secret nuclear weapons program. China has used its influence in Pyongyang to mediate the dispute between North Korea and the US over inspections of North Korea's clandestine program.
But diplomats said the blast merely underscored what China's neighbors already know: that China is a formidable military power.
``The Chinese test represents a new stage of further experimentation,'' an Asian diplomat says. ``China's Asian neighbors have always known that it is a big power economically and politically.
Still, China's neighbors nervously watch its dramatic naval expansion aimed at creating an ocean-going fleet. Observers say China has aggressively defined its territorial limits and adopted tough provisions in its law of the seas.
The ``blue-water'' Navy could be used to assert China's claim to the disputed Spratly Islands in the South China Sea, for instance. The potentially resource-rich islands are claimed by Taiwan, Vietnam, Malaysia, the Philippines, and Brunei, as well as China.
While China has asserted its sovereignty over the islands, it has also joined talks aimed at working out joint development of the strategic islands that sit astride key Asian shipping lanes.
And patching up relations with Vietnam, which fought China in a border war in 1979 and in a brief naval skirmish in 1988, has also cooled underlying tensions over the territorial dispute.
``Southeast Asia would look askance on a powerful Vietnam. But [it] would like to see Vietnam as an equal partner which could serve as a check on China,'' says a Southeast Asian diplomat.
As a result, other Asian countries are considering welcoming an economically strengthening Vietnam into the Association of Southeast Asian Nations (ASEAN) to counter Chinese power.
``As long as things are going well in the general relationship with Vietnam, the Spratlys will remain on the back burner,'' a Western diplomat predicts.