WASHINGTON, May 24 (IPS) - This year the Association of Southeast Asian Nations celebrates its 40th birthday, and it has big plans. After four decades of being largely a political and security alliance, ASEAN is accelerating its plans for economic integration.

ASEAN leaders are so eager to pull together into an economic community that they recently decided to move the goalposts. The economic benchmarks originally planned for 2020 have been moved up to 2015.

"The mission of this economic community is to develop a single market that is competitive, equitably developed, and well integrated in the global economy," says Worapot Manupipatpong, principal economist and director of the office of the Secretary-General in the ASEAN Secretariat. He was speaking last week at an Asian Voices seminar in Washington, DC, sponsored by the Sasakawa Peace Foundation.

The single market of 2015 would encompass all ten members of ASEAN: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), Philippines, Singapore, Thailand, and Vietnam. According to the projections of the ASEAN Secretariat, the single market will be accomplished by removing all barriers to the free flow of goods, services, capital, and skilled labor. Rules and regulations will be simplified and harmonised. Member countries will benefit from improved economies of scale. Common investment projects, such as a highway network and the Singapore--Kunming rail link, will facilitate greater trade.

Although there will not be a single currency like the European Union's euro, the ASEAN countries will nevertheless aim for greater currency cooperation.

"ASEAN's process of economic integration was market-driven," says Soedradjad Djiwandono former governor of Bank Indonesia, and it was influenced by the "Washington consensus" favoring increased liberalisation. "It is a very different framework from the closed regionalism of the Latin American model," he continues. With multilateral talks on trade liberalisation stalled, efforts have largely shifted to bilateral negotiations. "There has been a proliferation of bilateral agreements that developed countries use as a way to push a program for liberalising different sectors," Djiwandono concludes.

So far, ASEAN points to increased trade within the ten-member community as an early sign of success. But, overall trade share -- 25 percent -- pales in comparison to the 46 percent share of the North American Free Trade Agreement countries or the 68 percent share of EU countries. And with intra-ASEAN foreign direct investment rather low -- only 6 percent in 2005 -- financial integration lags behind trade integration.

The ASEAN approach differs in several key respects from the EU model, which originated in a 1951 coal and steel agreement among six European nations. ASEAN's origins, in contrast, have been primarily political and security-oriented, observes Donald Emmerson, director of the South-east Asia Forum at the Shorenstein Asia-Pacific Research Center at Stanford. "The success attributed to ASEAN is that it presided over an inter-state peace ever since it was formed. There's never been a war fought between ASEAN members."

Also distinguishing ASEAN from EU is the latter's institutionalisation. "ASEAN is radically different," Emmerson continues. "The much discussed ASEAN way is consultation, not even voting, since if they vote, someone will lose. Sometimes the consultation goes on without result. Sometimes decisions are reduced to the lowest common denominator. It also means that rhetoric predominates." This consultative process will be tested in November, when ASEAN leaders gather to adopt a charter, something that the EU has so far failed to accomplish.

Another difference with Europe is the enormous economic disparities among the ASEAN members, with Singapore and Brunei among the richest countries in the world and Laos among the poorest. These economic disparities are reproduced within the countries as well.

Worapot Manupipatpong points to two ASEAN initiatives for closing the gap. There is help for small and medium-sized enterprises. And the Initiative for ASEAN Integration,"basically provides technical assistance to Cambodia, Laos, and Myanmar so that they can catch up with the rest of the ASEAN members," he says. "Attention will be paid to where these countries can participate in the regional networks, what comparative advantage they have, and how to enhance their capacities to participate in the regional development and supply chain."

Then there are ASEAN's efforts to address "public bads," according to Soedradjad Djiwandono. "When there is a tsunami or a pandemic," he argues, "the worst victims are the marginalised or the poor. Addressing that kind of issue has some positive impact on reducing inequality."

"The gap between the early joiners and the later joiners will continue to be substantial because ASEAN has always been more of a forum and less of a problem-solving organisation," observes Karl Jackson, director of the Asian Studies Program at the School for Advanced International Studies at Johns Hopkins University. "As a result one would expect that these gaps would be closed only as individual countries increase their rates of growth." He attributes the inequality within countries to the middle stage of growth experienced by almost all societies: "Inequality increases before the state becomes strong enough to redivide some of the pie and take care of the gross inequalities caused by rapid economic growth."

ASEAN is banking on financial and trade liberalisation increasing the overall regional pie. On paper it is an ambitious project. But "the low hanging fruit have been plucked," says Donald Emmerson. Tariffs on the "easy commodities" have already been reduced to less than 5 percent. But non-tariff barriers to trade remain, and member countries are very protective of certain sectors.

Also tempering the region's optimism is the memory of the Asian financial crisis. The crisis began in Thailand in 1997 and spread rapidly to other countries in the region. One school of thinking holds that capital mobility -- "hot money" -- either caused or considerably aggravated the crisis. Since the ASEAN integration promises greater capital mobility, will the region be at greater risk of another such crisis?

"One consequence of the economic dynamism of the Asia-Pacific region," notes Donald Emmerson, "is that the accumulation of vast foreign exchange reserves -- obviously in China, but in other countries too -- more than anything else represents an asset that can be brought into the equation as a stabilising factor in the event of a financial crisis." Also, he continues, as a result of the ASEAN plus Three network, which adds China, South Korea, and Japan to the mix, the 13 countries have "made serious headway toward establishing currency swap arrangements that would come into play in an emergency on the scale of an Asian financial crisis."

Karl Jackson also looks to currency reforms as a hedge against future crisis. The Thai baht and the Indonesian rupiah are now unpegged currencies. "You will not have a situation in which the central bank of Thailand loses 34 billion US dollars defending the baht," Jackson argues. "Instead, the baht will appreciate or depreciate according to market forces."

But Jackson still remains cautious about the future. He points to the large number of non-performing loans in the Chinese banking sector. Also, there is "this anomaly of the U.S. absorbing two-thirds of the savings coming out of Asia, plugging it mostly into consumption rather than direct investment," he observes. "Eventually there has to be some kind of readjustment. The real value of the dollar must fall." (END/2007)

Reprinted by permission from IPS Asia-Pacific.

"Pan-Asian regionalism remains a long-term aspiration rather than a short-term prospect, but that having been said, that was true of Europe fifty years ago." - Michael Armacost, Shorenstein Distinguished Fellow

On November 2 Stanford University's Shorenstein Asia-Pacific Research Center, in association with University of California at Berkeley's Asia-Pacific Economic Cooperation Study Center, convened regional and economic experts to discuss the role of the Asia-Pacific Economic Cooperation (APEC) group and its relationship to the future of regionalism and regional integration in East Asia.

The meeting was timely, as APEC's annual week of high-level meetings begins on November 12th in Hanoi, Vietnam. It will culminate in a summit of heads of state (and a representative from Taiwan) on November 18-19 -- a key opportunity for President Bush to talk with regional leaders about a range of issues, including North Korea. In examining APEC's agenda and its potential institutional challengers, scholars focused on how the US might get more out of the forum and how the US could alter its approach to Asian regionalism to ensure continued relevance and influence in the region.

According to Dr. Donald Emmerson, director of the Southeast Asia Forum and senior fellow at Stanford's Freeman Spogli Institute for International Studies (FSI), "Asian regionalism is at a crossroads, and it may be at a crossroads for sometime." Recent events have demonstrated that countries in the region face a crucial choice: Will they move in the direction of an East Asian identity that actively excludes the US, or more toward trans-Pacific networks such as APEC that include the US? Or both?

As Asian countries consider the merits of APEC and American inclusion, US policy on Asian regionalism has been "curiously passive," especially when juxtaposed with the positive role the US played in supporting development of the European Union, according to Ambassador Michael Armacost, who was US ambassador to Japan and the Philippines and held senior policy positions on the staff of the National Security Council and in the Departments of State and Defense.

Dr. Vinod Aggarwal, a professor of political science and director of the Berkeley Asia Pacific Economic Cooperation Study Center, pointed to the example of the European Union (of which the US is not a member), urging that the US seek compatibility among regional and trans-Pacific institutions. Armacost agreed and maintained that the US should not fear exclusion from regional forums, such as the East Asia Summit (EAS), an outgrowth of the annual dialogue between the Association of Southeast Asian Nations (ASEAN) and other powers, which held its first meeting in Malaysia last year.

North Korea has said it will rejoin the six-party talks, but a meeting will not take place until after the APEC meeting. Here is an illustration of the utility of APEC that has nothing to do with economics. There could be an informal meeting of the five parties (without North Korea) in Hanoi. And that could be quite helpful in terms of coordinating strategy, especially with China. - Donald Emmerson, director, Southeast Asia Forum, Shorenstein APARC

Armacost underlined that American participation needs to correspond with American interests. In this sense, the US should put more effort into the Asian organizations of which it is already a member, including APEC. Armacost also suggested looking to Northeast Asia --"where the interests of the great powers intersect most directly" and there is no ASEAN counterpart -- according special attention to the six-party talks convened to denuclearize North Korea. He told the group that "fortuitously in the six-power talks, one has a negotiation which could be in embryonic form a regional security institution, in which American participation is not an issue -- it's self-evident. The US should put effort into the six-power talks succeeding, not only because of the substance of those talks, but because if they do succeed, then that format can provide a basis for a sub-regional institution of great importance to us, one that will give us a continuing role in the larger institutions that may emerge in Asia."

Emmerson said that there are essentially two views in Washington on US participation in Asian regional institutions: "one is to say that if these meetings are merely 'talk shops,' then our absence doesn't matter, and the other is to say that we are being, as the phrase goes, 'absent at the creation' of regional architecture, which we will regret not having been able to influence from the beginning, the longer we stay out." He urged greater US involvement in regional organizations and more creative approaches to tackling obstacles to involvement, such as finding a way to compromise on accession to the ASEAN Treaty of Amity and Cooperation, a key criterion for membership in the EAS. Attending that summit, in Emmerson's view, "would send a clear signal to East Asians that the US does want to be involved on the ground floor in the creation of an emerging regional architecture in Asia for the 21st century."

As the panelists encouraged the US to devote greater effort to the project of Asian regionalism, they also acknowledged that President Bush and other US delegates to this year's APEC meetings would not be in a position to embark on any bold initiatives, including the talked-of Free Trade Area of the Asia-Pacific, or FTAAP. According to Aggarwal, "in the current climate, the FTAAP is a political non-starter." Preoccupied by US midterm elections and the Iraq issue, "the administration is unlikely to put a lot of political capital into pushing for something like an FTAAP," not least because of the upcoming expiration of President Bush's Trade Promotion Authority. Aggarwal said, "I just can not imagine that any congressmen or senators will advocate free trade with countries with which we have our largest trade deficits. These massive trade deficits make the issue a political hot potato and no one will touch it." Instead, he recommended a less direct approach for trade liberalization. (A spokesman for the US Trade Representative's office has said that while they are still in the process of preparing their APEC agenda, they would consider discussing the FTAAP with their regional trading partners.)

But if you're ever going to pump new life into [APEC] you've got to find some practical projects around which people can rally. I would have thought the one economic issue that seems to be very timely, although some of the timeliness is being lost as prices sink, is energy. Virtually everybody in Asia is an importer of energy, and there are a lot of consumer interests that would benefit from the kind of collaboration that you could organize at a meeting like this. I would try to get subjects like that on the agenda, maybe more than trade liberalization. - Michael Armacost, Shorenstein Distinguished Fellow

Founded in 1989, APEC has 21 member economies on both sides of the Pacific. As a trans-Pacific, network, APEC connects the US, Chile, Mexico, and Canada on one side of the Pacific with a diverse group of Asian economies including China, Japan, South Korea, Taiwan, Indonesia, Vietnam, Malaysia, Australia, and New Zealand. Aggarwal described the body as more of a "discussion forum" than an organization, as it explicitly rejects the deeply institutionalized approach taken by the European Union in Brussels - something he said should be reconsidered if it is to become more effective.

Panelists raised the paradox that APEC's agenda seems overly ambitious, yet at the same time the forum is under-utilized, in terms of addressing some pressing issues in the region, including as energy, avian flu, and maritime security.

Aggarwal acknowledged that APEC has been host to a wide range of activities, including security, environment, women's rights, finance, and technology policy. "What's striking is that these activities have been discussed in the European Union, for example, but really only in any significant way after 25 years of economic integration." In the mid-1990s, APEC set deadlines for trade liberalization -- 2010 for developed countries and 2020 for other countries. These goals will be hard to meet.

Security in the Asia-Pacific means lots of things. If we always focus on the latest American security issue, then that becomes the driving factor in Asians saying because the Americans have their own agenda, we want to have our own organization. So, yes, I think we should revitalize some of [APEC's] trade goals, we should try to work toward that, but we should be willing to address broader issues, other than only counterterrorism or only North Korea. - Vinod Aggarwal, director of the Berkeley Asia Pacific Economic Cooperation Study Center (BASC) at UC - Berkeley

Armacost compared APEC to the European Union, asserting that the EU succeeded in large part because it "started small, built gradually and focused on depth rather than breadth at outset." In addition, the European body, considered the gold standard of regional integration, concentrated on very practical projects that yielded tangible benefits and generated political support for further endeavors.

In this vein, Armacost recommended two practical purposes for the group. "Virtually everybody in Asia is an importer of energy, and there are a lot of consumer interests that would benefit from the kind of collaboration that you could organize at a meeting like this." Also, returning to one of the organization's fundamental purposes, Armacost contended that in large part, "APEC is only useful insofar as the US uses it as a place to rally support for making one last ditch effort in trying to stimulate the Doha Round."

"I don't think that these bilateral trade agreements are particularly good for American business, or in general for trade negotiations at the Doha Round." - Vinod Aggarwal, director of the Berkeley Asia Pacific Economic Cooperation Study Center (BASC) at UC - Berkeley

"If APEC members really wanted to get the Doha Round back on track, they should agree to a moratorium on preferential trade agreements for a period of one year and challenge the Europeans and other non-APEC members to match them in this moratorium on preferential trade agreements," urged Aggarwal.

Overall, the group agreed that despite inherent problems in APEC, overall participation in this trans-Pacific institution should be considered important to the United States. Armacost made the practical point that "APEC happily provides the major occasion in which the President goes out to the region. Basically, it's an opportunity to cultivate your allies, find out what your adversaries in the region may be up to, and to have a point in your schedule where you've got that agenda of Asian concerns that you are forced to wrestle with. For that reason alone it's worth keeping APEC alive."

All the panelists acknowledged Asian countries' criticisms that the US had too much control over APEC's agenda, and that Washington utilizes the forum to discuss its "issue of the day." Emmerson called on the US to remember that "from the standpoint of a number of developing Asian economies, the American emphasis on trade liberalization has been somewhat distorting. These are low-income countries; they're interested in economic cooperation that can somehow help them raise their populations above poverty levels. There's a whole agenda there that we really haven't discussed, and in a way it has been slighted in APEC by this overriding emphasis on trade liberalization. If trade liberalization turns out to be unrealistic at least in the short run, development goals are an alternative agenda that has some utility, and is worth exploring."

Similarly, Armacost stated that APEC would be a "more valuable institution to us, if we stopped talking for a while and listened a bit." Reflecting on US policy more broadly, he said he "personally regrets that in recent years the institution building instinct, or reflex, in the US has been directed at remaking other people's institutions internally. The international institution focus has been on relieving ourselves of the burdens of institutions which cramp our style or impose limits on diplomatic maneuverability."

I do believe we're not paying enough attention to a region whose importance to us will be greater than any other region ten to fifteen years from now. We should devote more attentiveness to Asia. - Michael Armacost, Shorenstein Distinguished Fellow, Shorenstein APARC

Shorenstein APARC's associate director for research Daniel Sneider moderated the panel. This seminar was an outgrowth of the center's work on the role of regionalism in East Asia. The research center will publish a book on this subject next spring, in conjunction with the Brookings Institution.

About the Panelists:

Vinod Aggarwal is professor in the Department of Political Science, affiliated professor of Business and Public Policy in the Haas School of Business, and director of the Berkeley Asia Pacific Economic Cooperation Study Center (BASC) at the University of California at Berkeley.

Michael H. Armacost has been the Shorenstein Distinguished Fellow since 2002. From 1995 to 2002, Armacost served as president of the Brookings Institution. Previously, during his twenty-four year government career, Armacost served, among other positions, as undersecretary of state for political affairs and as ambassador to Japan and the Philippines.

Donald K. Emmerson is director of the Southeast Asia Forum at Shorenstein APARC and a senior fellow at FSI. He also teaches courses on Southeast Asia in International Relations and International Policy Studies.

Daniel C. Sneider is the associate director for research at Shorenstein APARC. He was a 2005-06 Pantech Fellow at the center, and the former foreign affairs columnist of the San Jose Mercury News.

The increasing sectarian conflict in Iraq and the rise of Islamist parties like Hamas and Hezbollah have put American efforts to democratize the Middle East on hold and raised doubts among experts and policy makers about whether democracy is compatible with the Muslim faith. But in a campus appearance yesterday afternoon, former Malaysian Deputy Prime Minister Anwar Ibrahim offered an ardent defense of democracy in the Muslim world, telling a standing-room-only crowd in Bechtel Conference Center that "men and women are born free, even in the Islamic construct."

Alternating between serious and sporting through his two-hour speech, Ibrahim broached many of the issues aggravating relations between Islam and the West, including gender relations, American foreign policy, cultural assimilation in Europe and Pope Benedict XVI's recent comments about Islam. However, he was most outspoken regarding his home country - he was a political prisoner in Malaysia for over four years - and rejected the race - and religious-based affirmative action policies that benefit the Malay majority there.

Returning repeatedly to the topic of Muslim democracy, Ibrahim drew from historical references and personal experiences, citing the democratic regimes of Indonesia and Iran of 1950s.

"There was no debate then whether democracy was compatible with Islam," he said. "Fifty years later, we have our leaders in the Muslim world telling us we're not ready."

The fundamental nature of democracy and human rights is universal, Ibrahim emphasized, adding that problems begin with cultural miscommunication.

"We have to debunk and reject the notion, held by Muslims and non-Muslims alike, that to support democracy and freedom is to support America, "he said. "And it is important for Americans to realize democracy is a value cherished as much by Muslims as it is by Americans."

"Misperceptions are unfortunate," he added, elaborating on his impressions of American culture. "This is a country full of contradictions. The level of sophistication and intellectual flavor is unparalleled. So why must people be so prejudiced? Why is misunderstanding so pervasive? To say that Muslims are entirely anti-America is wrong."

Ibrahim offered scathing criticism of his fellow Muslims for violent reactions to both the publication of caricatures of Mohammad in a Danish newspaper in 2005 and to the more recent comment by Pope Benedict XVI referring to elements of Islam as "evil and inhuman." The cartoon spawned riots killing 139 in Nigeria, Libya, Pakistan and Afghanistan, while the Pope's remarks fueled a maelstrom of controversy, including the firebombing of Catholic churches throughout the Middle East and the shooting death of a nun in Somalia.

"There is a right to disagree but no one has the right to cause destruction or destroy life," he said. "No one has the right to call for the banning of newspapers."

Acknowledging that his comments were not necessarily indicative of Islamic public opinion, he said, "This view may not be shared by all Muslims, but I am prepared to confront them."

Ibrahim's penchant for speaking his mind and sticking to his principles has dogged the leader through a career of controversy. As a young Malaysian activist in the 1970s, he was arrested during a student protest and spent 20 months in a detention camp. Following a meteoric political ascent, he was named Deputy Prime Minister in 1993, and many expected that he was Prime Minister Mahathir bin Mohammad's chosen successor.

But their relationship turned sour, and in Sept. 1998 Ibrahim was stripped of party membership and incarcerated under charges of corruption and sodomy. The charges were eventually overturned and he was released in Sept. 2004.

Regarding Malaysian politics today, Ibrahim expressed distaste toward his nation's system of bumiputera - a system of economic and social policies designed to favor ethnic Malays.

"I reject affirmative action based on race," he said. "Our policies should benefit the poor and the marginalized."

Finally, he described the need for engagement between the Islamic world and the West, criticizing the "extreme" foreign policy of the United States and its refusal to negotiate with regimes like Hamas.

"That policy is flawed," he said, adding that "to refuse to engage is a recipe for disaster."

A Singaporean student who had worked closely with the Shorenstein APARC's Southeast Asia Forum (SEAF), Siew Zhi Xiang Kevin, joined his fellow students in the Honors Program in International Security (2006) at a ceremony at Stanford on June 16, 2006. Kevin's honors thesis, completed in 2005, was entitled "Winning the Ideological War on Terrorism in Southeast Asia: Evaluating the Singapore Model."

At the ceremony, a brief summary of the work by SEAF Director Donald K. Emmerson, Kevin's adviser, was read to the audience:

In this thesis, Kevin examined the "Singapore model" of counter-terrorism--the set of steps taken by Singapore's authorities to counter the threat of violence by radical Islamists. Kevin had three questions in mind: What policies comprise this "Singapore model"? How effective have they been inside Singapore? And which (if any) of these policies might be applicable or adaptable in other Southeast Asian countries facing comparable threats? The result of Kevin's work may be the first scholarly effort to research and answer these questions. Noteworthy was the learning process he underwent as he enlarged his range of readings and informants beyond official sources. While recognizing the clear success of Singapore's efforts to prevent terrorism inside its borders, he acknowledged the need to treat Muslim Singaporeans as stakeholders not suspects. He also took into account the uniqueness of Singapore, especially compared with majority-Muslim Indonesia and Malaysia. By disaggregating the "Singapore model" into its component parts and locating these on a spectrum from most to least "exportable" to other countries, Kevin wrote a convincingly nuanced evaluation that should be of potential benefit to policymakers in Singapore and elsewhere in Southeast Asia.

The visit of China's President Hu Jintao to the United States this week is yet another opportunity for chatter about the "Chinese threat.'' In the lead-up to his arrival, we have heard rising voices from Congress and from the administration on everything from China's currency manipulation and piracy of intellectual property to its military buildup.

Do not be deceived. There is no real appetite in either Washington or Beijing for confrontation over any of these issues, much less a serious exploration of the challenge that China presents to American global leadership.

Neither government can afford an escalation of tensions. Economically, we are too intertwined. Strip away the packaging on the $200 billion trade deficit with China and you will find American companies running global assembly lines that begin in Ohio, pass through Malaysia, and end up in southern China.

Strategically, the United States is painfully dependent on China to try to cope with the greatest security challenge in northeast Asia: North Korea's nuclear program.

Beijing is wedded to its doctrine of "China's peaceful rise.'' First formulated three years ago, it aims to keep things calm with the United States and most of its neighbors, buying time to manage the tightrope act of continuing high growth while preserving domestic stability.

In any case, Washington is too bogged down in the Middle East to do more than bark now and then about China.

"At the strategic level, the United States is really focused like a laser on the Middle East,'' and the Chinese like it that way, said Asian security expert Kurt Campbell. "They appreciate the fact that with the U.S. attention focused elsewhere, it allows China to play a larger role in Asia as a whole,'' he told a gathering last week at the Center for Strategic and International Studies in Washington.

Typically, while Washington is focused on Hu's visit, the Chinese defense minister is in the midst of an unprecedented Asian tour that will take him to North and South Korea and to Singapore, Malaysia and Vietnam. China's prime minister has just finished a swing through Australia, New Zealand, Fiji and Cambodia.

In my own travels through Asia recently, from South Korea and Japan in the northeast down to Singapore, Vietnam and Hong Kong in Southeast Asia, I found a stunning growth in China's influence. The question of how to deal with China's rise is high on every agenda.

Everywhere people are looking over their shoulder, worried about China's burgeoning strength and presence. They are equally fearful that the United States is abandoning the field to China. But they also don't want to choose between these two powers.

That is even true in Japan, where the popular media and politicians are full of talk about the Chinese threat. But look a little closer and you will also find a growing counter-movement, particularly in elite policy circles, warning against becoming separated from the rest of Asia. The battle for succession to Prime Minister Junichiro Koizumi, who is stepping down in the fall, is now being shaped around this issue.

The China-Japan rivalry tends to reveal the more muscular side of China's "peaceful rise,'' one that Americans rarely glimpse. In Vietnam, senior foreign policy officials recounted what happened when the Japanese came courting to gain Vietnam's backing for a resolution to give them permanent membership in the U.N. Security Council, a key goal of Japan's foreign policy. Japan is Vietnam's largest aid donor and a major source of foreign investment.

China and Vietnam have a long and stormy history as neighbors, including wars that go back centuries and -- more recently -- a brief invasion in 1979 that ended in defeat for the Chinese. Relations these days are relatively good, however, fed by growing trade, heavily in China's favor.

Hu, in his role as leader of the Chinese Communist Party, sent a special envoy to talk to the leadership of the ruling Vietnamese Communist Party. Sometimes, a Vietnamese official told me, the Chinese can be very indirect. Not this time. The message was simple: "Don't do it!'' The ``or else'' was left unspoken.

The Vietnamese compromised, supporting Japan's membership but refusing to co-sponsor the resolution. China was not pleased, but apparently accepted it.

For the Vietnamese, a senior official explained, they must engage in a "lot of fine balancing.'' Vietnam "can't stop engaging China'' but wants to make sure China becomes a "predictable'' power.

In Washington, when the cloud of rhetoric clears, that formula pretty much sums up the reality of U.S.-China relations, too.