When the president of the Asian Development Bank unveiled its economic forecast for the region this month, he cited a key reason for the rosy outlook: the rapidly increasing importance of the People's Republic of China.

The assessment by Tadao Chino was one more piece of evidence pointing to the shift of geopolitical power underway in Asia. In the space of a few years, China has become an economic power and increasingly potent political force in a region where the United States once stood unchallenged - from New Delhi in the west, to Southeast Asia, to Tokyo and Seoul in the east.

China's growth, coupled with its emerging role as a catalyst for economic integration in East Asia, has awakened a sense of shared destiny in a region where cooperation has traditionally been weak. In defiance of early predictions that China would crush its smaller neighbors as it became the world's preferred producer of cheap goods, Beijing's boom has - for now - become Asia's windfall too.

What remains unclear is how long the region's smaller economies can maintain their surprising ability to keep trade ties with China a mutually beneficial, two-way exchange. Some analysts already see indications that, as China's production muscle continues to grow, weaker countries such as the Philippines are finding it harder to keep up.

At this point, specialists believe, China's waxing influence carries no threat to the United States. As Chinese Premier Wen Jiabao's recent visit to Washington underscored, the two nations share increasingly similar interests: Both place a high priority on stability in the region and in countries that supply vital imports. And both see unfettered shipping as essential to maintaining the free flow of trade. And both view militant Islamists as a serious threat.

China's deepening involvement in international affairs - including its entry into the World Trade Organization - binds the country more tightly to a global order still dominated by the United States, these experts say.

"China has made gains, but not at the expense of U.S. interests," said Amitav Acharya, deputy director of the Institute of Defense and Strategic Studies in Singapore. "This doesn't have to be a zero-sum game."

Much of China's new status stems from its emergence as one of the world's major trading nations and, in the process, an important market for export-oriented neighbors. But there is a strong political dimension to this power as Beijing's new leaders show themselves prepared to set aside old disputes and engage, rather than bully, other nations.

So stark is this change that many refer to China's new regional diplomacy as a charm offensive. The relaxed, affable demeanor Wen displayed in Washington is typical of Beijing's current posture in foreign affairs.

"These leaders are changing how China deals with the region and the wider world," said Peter Jennings, director of programs at the Australian Strategic Policy Institute in Canberra.

In sharp contrast to the United States' ballooning trade deficit with China, most Asian countries actually enjoy healthy surpluses with their fast-developing neighbor as Beijing buys raw materials, food and manufactured goods in increasingly large quantities to fuel its domestic growth.

"Everyone said China would overwhelm the region, but it's not happening," said Jean- Pierre Verbiest, the Asian Development Bank's deputy chief economist. "Instead, it's had the opposite effect, and the whole Asia is flourishing."

Although China's transformation into a more open market economy has been underway for more than two decades, trade growth curves within Asia have tilted off the charts since Beijing's 2001 entry into the World Trade Organization.

Wen recently predicted that China's trade with members of the 10-nation Assn. of Southeast Asian Nations - ASEAN - would exceed $100 billion a year by 2005, a figure more than triple the volume of two years ago.

Few believe that China can sustain its current high foreign trade growth. Some experts point to October figures, which showed reduced growth of foreign direct investment and lower domestic loan volume as early signs that the white-hot pace of economic growth - and trade volume - could slow down.

Still, China already has had a role in transforming how East Asia views itself. Thanks largely to China, trade within the region this year is expected to exceed that with countries outside the area for the first time - a reality that experts predict will foster a greater sense of community among the nations.

"This isn't like Europe, where governments played the key role in creating a single market," Verbiest said. "This is business-driven. This is fairly unique in history."

Some experts, however, worry that as China's economy continues to grow and gathers more technical expertise, smaller Asian nations could eventually lose the competitive advantage that now enables them to sell so successfully to the big socialist nation.

"China will obviously climb up the technology ladder, and the question is whether these smaller economies can stay ahead or whether they get overtaken," said Yiping Huang, a Hong Kong-based Citigroup economist who specializes in China.

This deepening regional interdependence has helped to drive a softening of China's relations with its neighbors.

Rudolfo Biazon, a Philippine legislator and vice chairman of the Senate Committee on National Defense and Security, said Beijing had notably toned down its rhetoric in its long-simmering dispute with Manila over possession of the tiny Spratly Islands in the South China Sea west of the Philippines.

"They are less aggressive, more cooperative, now," he said.

The change is part of a larger pattern. Since October, China has:
Signed a Code of Conduct in the South China Sea with ASEAN that includes a pledge to resolve territorial disputes "by peaceful means, without resorting to the use of threat or force." The accord has eased tensions over two disputed island groups in the area - the oil-rich Spratlys, claimed in whole or in part by six countries, including China, and the Paracels, claimed by China and Vietnam.

Acceded to the 1976 Treaty of Amity and Cooperation in Southeast Asia, which promotes closer economic cooperation, cultural exchanges and peaceful settlement of disputes.

Concluded an agreement on the creation of an ASEAN-China Free Trade Area. Tariffs on a wide range of mainly agricultural products will fall starting in January, with those on a variety of other goods scheduled to drop beginning in January 2005.

Overhauled its troubled relationship with India, conducting its first joint military exercises with the Indian navy. Beijing is said to be nudging its traditional ally Pakistan to resolve the prickly Kashmir dispute peacefully. In the first 10 months of this year, the still-modest level of trade between Asia's two giant economies jumped to $5.8 billion from $3.8 billion.

Decided to take a more active and constructive role and work more closely with Japan, South Korea and the United States to resolve the nuclear threat of North Korea.

That China's rise has occurred at a time when the attention of the United States' most-senior policymakers largely has been focused elsewhere only adds to the sense of Beijing's growing influence. The Bush administration's self-declared war on terrorism and the U.S.-led invasion of Iraq also have diminished America's standing in the East Asia region.

In a speech this month, Indonesian Foreign Minister Hassan Wirajuda suggested that the U.S. counter-terrorism campaign, including the Iraq war, might have made the world less safe. A poll of international attitudes toward the United States published last summer by the nonpartisan Washington-based Pew Research Center for the People and the Press found that 83% of Indonesians questioned had an unfavorable opinion of the U.S., up from 36% a year earlier.

Just why Beijing has moved so intensively on the diplomatic front is a matter of debate among regional specialists. Some believe that China is buying time, to maintain regional stability as it builds up power for an eventual series of showdowns with smaller, weaker neighbors. Others, however, see China's policy of engagement as part a fundamental shift to bring its actions more in harmony with the interests of a large and powerful trading nation.

"Cooperating with others is in China's long-term interests," Acharya said.

(Courtesy to the Los Angeles Times)

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