What is behind this? At one level, the BRICs, as they grow, are clearly recognising commercial and strategic opportunities in Africa. But Standard Bank reckons other, more individual, drivers are also at play.

In a new report, the bank looks at what each of the individual BRIC countries is trying to do. To whit:

-- Brazil's immediate intererest in Africa is securing access to natural resources, particularly oil. But is also motivated by a desire to create a new "Southern Axis" with itself at the forefront.

-- Russia is also interested in Africa's natural resources. But it faces a problem because of the sullied reputation of the Soviet Union during the Cold War. So Moscow has also embarked on a rebranding programme within the continent by ramping up its aid programmes.

-- India is attracted to Africa in part because of long historic ties. Commercial engagement, however, is also motivated by a need to guarantee the natural resources it needs for its own growth. Furthermore Africa is seen politically as a key ally in the pursuit of a competitive advantage over its Asian competitor China.

-- For China, Africa provides a long-term partner in its ongoing bid to gain global economic ascendancy, providing it with the resources, markets, geopolitical support, and, eventually, food and social security in the form of a growing and engaging diaspora.

A full copy of Standard Bank's report, which was written by Simon Freemantle and Jeremy Stevens, can be found here.

(Photo: Jeremy Gaunt)

India said this month it will bolster its defences on the unsettled China border, deploying up to 50,000 troops and its most latest Su-30 fighter aircraft at a base in the northeast.

While upgrading the defences has been a long-running objective, the timing seemed to suggest New Delhi's renewed fears of "strategic encirclement" by China by deepening ties with all of its neighbours, not just Pakistan but also Sri Lanka and Nepal.

The chief of the Indian air force, reflecting the anxieties in the security establishment, said China was a far bigger threat than Pakistan because so little was known about Beijing's combat capabilities.

Predictably enough, the Indian military moves and statements drew a strong response from China's official media warning that New Delhi's tough new posture was dangerous if it thought it would compel China to cave in. Beijing was in a different league, both in terms of national power, economic scale and global influence, the media said.

On Monday, Hu and Singh met on the sidelines of the Shanghai Cooperation Organisation and the BRIC meeting that followed in the Urals city of Yekaterinburg. Details from the meeting were sketchy, but the Press Trust of India said the two leaders supported an early meeting of a joint economic group to push trade ties. 

They also touched on the border dispute at the heart of the more than four decades of distrust, noting that top negotiators were due to meet in August. The People's Daily said Hu stressed on expanding economic cooperation and investment flows and aims to take bilateral trade to $60 billion in 2010. It stood at $51.8 billion in 2008, the paper said.

India's decision to attend the SCO, where it has observer status, was also a step forward. Since its inception the forum has been seen in India as China-centric with the main strategic objective of limiting U.S. dominance on China's periphery and in that way prevent the hemming-in of both China and Russia.

By attending the summit is New Dehi signalling its intention to engage China on a broad front and not shy away?

And did Beijing shift ground a bit by acceding to the declaration by the BRIC - Brazil, Russia, India and China - calling for U.N. reform and saying that the grouping understood and supported India and Brazil's aspirations to play a greater role in the United Nations.

Both Brazil and India are candidates for permanent members of the Security Council and Beijing has long been cold to the idea of at least its southern neighbour getting a place on the high table. It wasn't a ringing endorsement at Yekaterinburg but perhaps the first shuffling of chairs?

[Manmohan Singh and Hu Jintao at the SCO summit and a Chinese soldier at the border]

  “43 percent nasty” read posters dotting the press wing of Australia’s parliament this week under a photo of a beaming Prime Minister Kevin Rudd, pointing readers to a more benign 5 percent-strength beer on sale at a nearby news studio.
    The quip drew on a poll finding near one-in-two voters believe the boyish-looking Rudd has a nasty side, echoing other recent surveys showing the centre-left leader’s meteoric popularity is sliding back from a year of levels “with the gods” .
    The beer plug perhaps helps explain a bizarre and sudden switch in Rudd’s technocratic speaking style to a bush slang which has left even Australians bewildered as, with his usual obsessiveness, Rudd works hard to reconnect.

Photo: Rudd at the Asia Security Conference in Singapore, May 29, 2009/Reuters 

 "Fair shake of the sauce bottle, mate . . . It's chalk and cheese . . . Fair shake of the sauce bottle, mate . . . Well, again, fair shake of the sauce bottle, mate," the Mandarin-speaking former diplomat said with “ticking clock” monotony in a television interview this week which raised eyebrows nationally.
    Compare that to equally incomprehensible, but slang-free, comments by Rudd in Britain last year while meeting foreign leaders over climate change.
    "The parallel ideological synergies, vis-a-vis the development opportunity momentum in our own constituencies … that's where the low-hanging fruit lies," he said as attending journalists shook their heads.
    In the United States, Rudd spoke at the prestigious Brookings Institution of “a complimentarity that could be developed further in the direction of some short of conceptual synthesis”.
    Australians can be forgiven for wondering who their prime minister really is, with the question having added resonance amid a swirl of talk that Rudd could call early elections to overcome an upper house Senate currently giving Labor nightmares.
    “Will the real Kevin Rudd please stand up,” former conservative opposition leader John Hewson demanded on national television on Friday.
    Rudd was a virtual unknown outside the corridors of parliament when he led his Labor Party out of near 12 years in opposition and chronic leadership instability to a sweeping election triumph in November 2007.
    Rudd came to lead then-opposition Labor in late 2006 as almost last leadership man standing and since election his popularity has been at record highs. His standing belies the “Dr Death” nickname Rudd earned while cutting a swathe through staff numbers as a top bureaucrat in Queensland state in the early 1990s.
    But that began to downshift in April when stories emerged of Rudd’s temper and control obsession -- which political insiders have known of for years – boiling over at a air force stewardess he reduced to tears over food choice while on a VIP flight.
    Since then Rudd’s popularity, while still strong, has fallen from high 70s to around 58 percent in the closely-watched Newspoll series.
    “Rudd's whole life is an artifice. With his blond hair, round face, round glasses
and wholesome values, he would have us believe he's the Milky Bar Kid,” senior writer Ross Fitzgerald wrote in the Australian newspaper this month, comparing Labor’s star to a popular children’s chocolate bar character.
    “As the public is starting to realise, the real Rudd has more in common with Dr
Death than the carefully-crafted public persona of the Milky Bar Kid,” Fitzgerald said.
    “Strewth! There is now a Kevin Rudd for every occasion, and the only version of the Prime Minister that's missing is one that's real,” wrote conservative Herald Sun newspaper columnist Andrew Bolt after Rudd’s stream of sauce bottle slang.
    Speech experts have blamed Rudd's chameleon switch on his advisors trying to better reach ordinary voters, particularly swing-vote workers in crucial regional seats and suburban fringes, often ill at ease with Rudd’s natural intellectualism.
    But commentators, and the public, see the transition as far from smooth, raising questions on if it could actually harm Rudd in future opinion polling, and ultimately an election.
    Others say its shows a country and its leader unsure of their identity, torn between sophisticated city dwellers and a more insular retreat to nationalist symbols and protectionism among voters in regional areas.
    “While some of us have drifted off to lattes, designer wear and a taste for cosmopolitan things, others have retreated to the comfort of flags on our utes (SUVs) and Southern Cross tattoos,” the Courier Mail newspaper said.
    “In all fairness, it must be hard for any moderately intelligent Australian political leader to hit exactly the right note with his or her public persona in this shifting landscape that is our national character,” the paper said.
    So far Rudd is not retreating from the barrage of criticism and has even poked fun at himself and protagonists at a business power lunch in Sydney on Thursday, drawing laughter from those assembled.
    Channeling his inner aussie once more, Rudd called on media commentators to give him a "fair crack of the whip" and not "come the raw prawn".
     Does that leave you confused? Then spare a thought for wondering Australians as they await opinion testing of Rudd new style during a bruising parliamentary session over the next fortnight that could yet lead to surprise early elections!

And things are starting to move on the India-China front. We carried a report this weekabout India's plan to increase troop levels and build more airstrips in the remote state of Arunachal Pradesh, a territory disputed by China.  New Delhi planned to deploy two army divisions, the report quoted Arunachal governor J.J. Singh as saying.

Other reports in the Indian media said the air force was beefing up its base in Tejpur in the northeast with Su-30 fighter planes, the newest in its armoury. The HIndustan Times said it was part of a decision to move advanced assets close to the Chinese  border.  The IAF base in Tejpur which is in the state of Assam is within striking distance of the border with China in Arunachal Pradesh.

Arunachal evokes especially painful memories for India - for this is where the Chinese advanced deep inside, inflicting heavy casualties on poorly-equipped Indian soldiers in the 1962 war. The Chinese retreated but have refused to recognise Arunachal as part of India, and that along with other disputed stretches of their 3,000 km border has remained at the heart of more than four decades of distrust.

Indeed the renewed Indian defence deployment comes days after the air force chief said China posed a bigger and more potent threat than Pakistan.

And what of the Chinese? What do they have to say to the noises coming out of India?  While official China hasn't appeared to react publicly,  the Chinese media has responded. The Global Times said in a hard-hitting editorial the Indian government's tough new posture "is dangerous if it is based on the anticipation China will cave in".

China is in a different league, it says, by way of international influence, overall national power and economic scale and India's politicians don't seem to have realised this. On the contrary, they seem to think that they would be doing China a huge favour simply by not joining the so-called  “ring around China” established by the United States and Japan, it says.

China is not going to compromise on its border dispute with India, and it was up to New Delhi to figure out why it can't have stable relations with many of its neighbours such as Pakistan, Nepal and Sri Lanka while Beijing can, the Global Times says.

The Global Times is a popular tabloid and has been taking a strident tone on foreign policy issues. But it is published by the Communist Party mouthpiece, the People's Daily, and can't really be ignored.

Are we seeing the beginning of a more open, declared rivalry  between the world's two most populous countries? Where does Pakistan fit in all this? Is New Delhi going to organise its energies and defences to meet the perceived threat from China and leave Pakistan to figure out its own troubles?

And what of the Chinese? Are they going to turn up the heat on India? As this analysis notes, New Delhi is already wary of China's role in Pakistan, and now reinforcing its fear of strategic encirclement are Beijing's expanding ties with India's smaller neighbours such as Sri Lanka and Nepal.

 [Indian troops at the Indian-China trade route at Nathu-La; an Indian and a Chinese soldier also in Nathu-La] 

.

Born and raised in Canada, I grew up listening to stories of the past — lessons in history, humanity, tragedy and survival. And like many children of immigrant families, there is a constant search for a balance and a place between the different worlds that shape our identity.

(Caption: Neon lights from skyscraper and 1997 Handover signs cast a glow over Hong Kong’s Victoria Harbour and the extension of the Hong Kong Convention and Exhibition Centre (R, foreground) in this long exposure zoom photograph.  Picture taken June 21, 1997. REUTERS/Dylan Martinez)

Over the years I’ve witnessed a dramatic change in my parents’ attitude toward China. For them, the changes in China since they left — over 45 years ago for my father and 35 years ago for my mother — have been beyond anything they could have imagined in their lifetime.

Born just before Japan invaded China in 1937, my parents were children during the Sino-Japanese War and teenagers when Mao Zedong founded the People’s Republic of China in 1949.

Over the next 25 years, the dramatic upheavals, failures and deaths from the Great Leap Forward and the Cultural Revolution spared no one.

In the spring of 1952, my grandfather was falsely accused of corruption and was executed about a month later. He was posthumously cleared and declared a victim of the anti-corruption movement at the time.

The years passed, my parents married and had a daughter.

My father, who went abroad to study in 1962, was one of the last to leave before China closed its doors to the outside world. My mother stayed behind but was isolated and persecuted in revolutionary meetings and posters that denounced her “foreign” connections. My grandmother — already nearly 60 years old — was sent to a labour camp for several years. The education system in China came to a halt for roughly a decade and many of my parents’ younger cousins were part of that “lost generation”. Their stories are by no means unique, merely an example of experiences shared by an entire generation of Chinese. They were among the lucky ones. Others suffered much harsher persecution and many lost their lives.

Twelve years passed before my parents reunited again in Canada. When my mother finally left in 1974, she was among the early handful to leave after China’s doors cracked open again. My sister joined my family four years later.

China was changing fast, but not fast enough in 1989.

When the Tiananmen protests erupted in April of that year, my cousin (who prefers to remain anonymous) was a student at Tsinghua University in Beijing. Nearly everyone attended the protests at one point or another, he said, and during its relatively peaceful early days, the students found it “fun” to be part of the gathering crowds.

(Caption: Crowds of jubilant students surge through a police cordon before pouring into Tiananmen Square on June 4, 1989 during a pro-democracy demonstration. REUTERS/Stringer)

The students leading the demonstrations weren’t always particularly well liked, he recalled, “but they were supported because no one else had the interest to stand up, because we never thought students would be able to win.”

Unlike Beijing’s media crackdown around sensitive events and anniversaries today, what was unfolding in the capital at the time was no secret. “The [domestic] media covered everything and was on the students’ side. People were unhappy about their lives, so they were happy to see the students fight with the government,” my cousin, who now lives in Canada, said.

After more than a month of demonstrations, many of the university students had lost interest and were more worried with having to go back to class.

(Caption: A captured tank driver is helped to safety by students as the crowd beats him June 4, 1989. REUTERS/File)

“Most of the people I know didn’t go onto the street any more since late May,” he said. The dark turn in Tiananmen Square took him and others by surprise.

Thousands of miles away in Canada, my parents were rivetted to the television as networks continuously broadcasted the events unfolding in their homeland. I had just turned 13, and was more disturbed by my parents unusual display of emotion than what was happening on TV in a place I’d never been and over issues I didn’t really understand.

(Caption: Student protesters arriving at Tiananmen Square to join other pro-democracy demonstrators, ride pass the portrait of late chairman Mao Zedong. Picture taken May 1989. REUTERS/File)

Ask anyone in China today and they will tell you things have completely changed in the last 20 years — almost exponentially so in some cases — for better and for worse, depending on who you ask.

Construction abounds everywhere and skyscrapers are built with unimaginable speed.

For the tens of millions of Chinese living in cities, the quality of life has transformed dramatically: First came household appliances like televisions. Now everyone wants a car. The new-found affluence means being able to go on vacation or even having a different cell phone for every day of the week. The chasm between the middle class — let alone the super wealthy — and the poor is mind-boggling.

(Caption: Fireworks explode during the closing ceremony in the National Stadium at the Beijing 2008 Olympic Games August 24, 2008. The stadium is also known as the Bird’s Nest. REUTERS/Wolfgang Rattay)

The first generation of the one child policy — infamously nicknamed “Little Emperors” — are now adults, and for many, politics holds little interest.

“People do not really care too much about [Tiananmen] anymore, especially the younger generations,” my cousin said. There are bigger problems facing the country now than June 4 (as the Tiananmen crackdown is known in Chinese).

There are local bursts of labor unrest, concerns about food and product safety and corruption is rampant in nearly all spheres and levels of life — something that was almost non-existent in the 1980s.

(Caption: A bride poses as pigeons fly during a pre-wedding photo shoot at a park in Beijing July 25, 2008. REUTERS/Claro Cortes IV)

“If June 4 didn’t end in that way, China might have had a better chance to become a nicer country than what it is nowadays. It closed the door of political reformation but opened the door to all kinds of corruption as a compensation,” my cousin said. He left in the mid 1990s, but still maintains close ties to China.

“People in China are not very happy with what is happening in the country. Although they don’t care about June 4 anymore, it could become a trigger. That’s why the government is still very nervous.”

For a government that believes stability — social, economic, political — is paramount above all else, tightening security, clamping down on the Internet (even if it isn’t always that hard to circumvent) and television access from Hong Kong during sensitive events have become routine.

But my parents are pragmatic. Their experiences have shown how revolutions can create chaos and extremes. They want calm and peace and see the most effective change coming through natural, rather than forced progress. My father openly admits that now “we only see the good side” and that “the past has been forgiven.” He calls the changes in China a miracle.

Fed on a regular diet of CCTV (the official Central China Television), some may say my parents are being influenced by the powerful propaganda machine of the Chinese government. That may be true, but for them, there is also a sense of pride and optimism that a country that has seen so much suffering has come so far in such a short period of time. They go back annually now and witness the changes from year to year. They are not blind to the concern my cousin and others like him express, but it doesn’t dampen their hope.

(Caption: A young girl waves a Chinese flag as she and other school children wait for the arrival of Chinese President Hu Jintao at the Macau airport December 19, 2004. REUTERS/Anat Givon/Pool)

Caption: Undergraduates stand in front of a Chinese national flag after three minutes of mourning for Sichuan earthquake victims at Fudan University in Shanghai May 12, 2009. REUTERS/Aly Song

*****

Q: What are your thoughts on June 4th?

My knowledge about June 4th is from a three-hour documentary called Tiananmen. I know it’s definitely illegal in mainland China but these things always appeal to college students. I admire the courage of the protesters and their passion for this country. It’s quite difficult for me to imagine people acting the same nowadays. On the other hand, I don’t think those protests were well-organized,  and things seemed to be out of control when they were close to the end … Chaos won’t do any good to this country. We all know that China’s political system is not good, but what is better?

Q: How do you see life in China now?

Life is better, at least for people living in cities. The widespread use of computers and the Internet make it possible for us to find out hidden facts. Although the government has set up the Golden Shield Project [sometimes better known as the Great Firewall of China],  one doesn’t need to be a computer science expert to figure out how to deal with it.

Caption: Job-seekers visit booths of companies at a job fair held for graduates in Changchun, Jilin province, November 22, 2008. REUTERS/Stringer

But it seems that nowadays most people — and frankly speaking, myself included — care more about how to make life better than things such as democracy. Maybe it’s because most Chinese are still poor. Maybe it’s because of the way we were educated. Sometimes we college students do talk about the “lack of democracy”, but I guess most of us do not have much of an idea about what democracy really means. According to our textbook, the communist style is the only true democracy in the world, though most Chinese students just say this to pass the exam. Our government seems to be more open than before, but you can still catch the smell of autocracy everywhere. For instance, college students are not allowed to have a valid ID on their university BBS (bulletin board system) without reporting their true name to the network administrator. This makes it easy for them to track who said what in case there are “improper” political concerns on the BBS.

Q: How do you see China’s future?

I’ve seen enough trouble with these “one-child” generations, but I still believe the new generations are capable of making our country better, both in economy and politics. We’re better educated, and have more opportunities to learn from the outside world compared to our parents’ generation. For me, the most impressive part of the younger generations is that most of them know how to think independently and question instead of merely accepting what they’re told.

I do wish the day will come, however, when we Chinese people don’t need to ask before an interview, “Hi, is this an anonymous one?”

Caption: A Chinese honor guard is entangled in his flag during a welcoming ceremony for Malaysia’s Prime Minister Najib Razak outside the Great Hall of the People at Tiananmen Square in Beijing June 3, 2009. REUTERS/Reinhard Krause

Security on Beijing’s Tiananmen Square is always tight.
 
But I knew that today it was going to be particularly so when, upon emerging from the subway station, I was faced with three police vans and literally hundreds of security personnel, all on guard against any kind of disturbance ahead of the 20th anniversary of 1989’s bloody crackdown on pro-democracy demonstrators in Beijing.
 
Nervously I made my way to one of the square’s entrances, wondering if I would even be allowed to enter.
 
I put my bag on the X-ray machine, was briefly frisked by police with metal detectors, and cleared to go on my way.
 
The square was full of tourists, as usual. What was different was the hordes of uniformed police, military police and plainclothes security every few metres.
 
The plainclothes officers were painfully obvious, shuffling awkwardly in T-shirts and tracksuit bottoms, their crew cut hairstyles and poorly hidden walkie-talkies distinguishing them from ordinary visitors. They were also all carrying the same brand of bottled water.
 
Everytime I tried talking to someone, a police officer or one of the guards began hovering behind me. Finally I was able to chat with a trinket seller, who, talking in a low voice, complained
that the security was ruining her business.
 
“June 4 is tomorrow,” she said simply.
 
At that point one of the crew-cut men marched over and told the lady to stop talking to me.
 
By this stage. I had had enough and began heading back towards the subway station, passing on my way a foreign television crew. A policeman was telling them in no uncertain terms that they could not film in the square.
 
I felt lucky that nobody had stopped me. I’m sure the police knew I was there though, and why I had gone.

Photo caption: Chinese security personnel try to stop pictures from being taken as they check the documents of the photographer at Beijing’s Tiananmen Square on June 3, 2009. Chinese security forces blanketed Tiananmen Square on Wednesday ahead of the 20th anniversary of the June 4 crackdown on pro-democracy protesters. REUTERS/Reinhard Krause

War is the last thing on the minds of Taiwan’s leaders these days as the island government moves to make friends with rival China. Even in far more hostile times, Taiwan’s KMT leadership had privately given up dreams of using force to take control of the mainland, according to documents that are now available for public viewing.

A public opening in May of the forested Back Cihu compound outside Taipei teaches 400 eager visitors per day how the island-based Republic of China government aimed to strike back at the Communist People’s Republic of China, but it ultimately abandoned the idea.

As the county now in charge of Back Cihu worked toward opening the site and its historical treasures to visitors, it came across documents left over from strongman Chiang Kai-shek, detailing schemes to retake China in the 1950s through the early 1970s. Visitors can see some of the records at Back Cihu, which features five buildings and a tunnel that would have housed the government if Beijing ever attacked central Taipei.

“The material on display allows the public to see the tense atmosphere of the 1950s,” a statement from the county government says. “(After the 1960s) the scale of Chiang’s plan to take back the mainland was gradually reduced, and in July 1972 put away in the office of a vice defence minister.”

Chiang, who died in 1975 without retaking China, had scrapped battle plans for several tactical reasons, the documents explain.

Taiwan’s navy was weak, they say, while China had rallied crucial support at home by urging patriotic citizens to donate scrap metal. Chiang had also thought to attack China through Vietnam but decided U.S. forces there were too weak to help out.

Lin Chong-pin, a strategic studies professor at Tamkang University in Taipei, says the military plan was real: “Chiang Kai-shek did mean it. It was more than just rhetoric. He had something planned but could not do it.”

Access is limited to pre-registered visitors, and demand is huge for the T$100 (about $3) guided tours. “It was closed for years. Now reservations fill up right away,” county tourism promoter Lee Fu-hua said. “We can let the public see what it was actually like in that period.”

In an interview with the Hindustan Times, Indian Air Chief Marshal Fali Homi Major said China posed a greater threat than Pakistan.  “China is a totally different ballgame compared to Pakistan,” he was quoted as saying. “We know very little about the actual capabilities of China, their combat edge or how professional their military is … they are certainly a greater threat.”

The Mint newspaper followed up with a editorial calling China "perhaps the gravest external threat" to India's security. "That India is in an unstable neighbourhood is clearer than ever this summer," it said. "But troubles from Pakistan, Sri Lanka or Nepal pale when compared with China."

The increased anxiety has been driven by the end of the war in Sri Lanka, where the government's victory was attributed partly to a supply of Chinese weapons, and where China has been building a new port on the island's southern coast.

"This is part of a broad move by China into the Indian Ocean, which India has traditionally considered its sphere of influence," said British newspaper The Times. Chinese engineers are building another port at Gwadar in Pakistan; roads are being cut or improved through Burma to help trade routes between Yunnan province in China and the Indian Ocean; ties are being improved with island nations such as the Seychelles; surveillance stations are being sited or upgraded on Burmese islands."

But even without the Sri Lankan trigger, Indian analysts have suggested that India may no longer enjoy the favoured position that developed under former president George W. Bush, when Washington forged close ties with Delhi, in part as a counterweight to China.  Facing the twin challenges of financial crisis and a military stalemate in Afghanistan, the Obama administration is dependent on India's two main rivals -- China to pay for American debt and Pakistan to help it defeat the Taliban.

"The crux of the matter lies in the US's relationship with China," retired Indian diplomat M.K. Bhadrakumar wrote in the Asia Times. "At first glance, it may appear there is hardly any ellipsis between George W Bush's policy of engaging China in 'constructive, candid and cooperative' ties and Obama's search for a 'positive, cooperative and comprehensive' US-China partnership. But the reality is that the US today has a much greater need of strategic engagement with China and arguably to 'upgrade' the partnership in the direction of an elevated dialogue on global political issues."

"To be sure, China's global influence has increased and a full-blown US-China strategic partnership - as evident from the mere talk of an exclusive 'G-2' matrix - will figure on the radars of countries such as India (or Japan) as a high probability if not an inevitability. The Obama administration will have to work hard to reassure India that it is not being relegated to a subordinate status."

India's loss does not automatically mean Pakistan's gain.

Pakistan has traditionally regarded China as its most reliable ally. In the past, Sino-Indian rivalry has helped it to win military supplies from China along with financial and diplomatic support. But rivalry between its two giant neighbours has not necessarily always played in its favour. India developed nuclear weapons to counter China's nuclear capability.  Pakistan, according to the Pakistan Army's official website, saw this as "coercive diplomacy" targetting not China, but Pakistan, and began its own nuclear weapons programme after India carried out its first nuclear test in 1974.

Nor did Pakistan necessarily gain from India's defeat by China in a border war in 1962, which left India with an enduring anxiety about its long, unmarked borders. When it feared Pakistan was planning to take control of the mountains beyond Kashmir -- an area so remote that it had never been demarcated -- India sent troops to occupy the heights above the Siachen glacier in 1984. Although India had been burned by what it saw as Chinese encroachment in its border areas before the 1962 war, its actions on Siachen were directed against Pakistan. (Twenty-five years later, the Indian and Pakistan armies are still deployed on the heights above Siachen, with India commanding the higher positions.)

Nor does Pakistan automatically gain from ever-closer ties between the United States and China.

According to this McClatchy report, the Obama administration has appealed to China to provide training and even military equipment to help Pakistanis counter the growing militant threat. "The proposal is part of a broad push by Washington to enlist key allies of Pakistan in an effort to persuade Islamabad to step up its efforts against militants while supporting the fragile civilian government and its tottering economy." it says. Richard Holbrooke, the administration’s special representative for Pakistan and Afghanistan, had visited China and Saudi Arabia, another ally, in recent weeks as part of the effort, it said.

In the past, Pakistan prided itself as a go-between, facilitating the Cold War thaw in relations between the United States and communist China in the early 1970s.  That may seem like a long time ago, but in a region with a fierce attachment to history, is Pakistan really ready to have Washington and Beijing talk over its head about what is best for it?

(Photos: President Obama meets President Hu in London; and Indian soldiers in Siachen)

China has talked about plans to allow foreign companies to float on its domestic stock markets for at least a decade, but that's all there has been: talk.

Now would be a good time to convert some of that talk into action. Beijing has been struggling with its own investment strategies: the state gets feeble returns on the U.S. Treasury bonds it owns, and its equity stakes in foreign financial firms are well under water.

So why not diversify by allowing 1.3 billion Chinese citizens have a go rather than a few bureaucrats working for China's sovereign fund? The many might even do better than the few. And it would give Chinese savers a chance to buy global blue chips at credit-crunch prices.

The idea of opening up China's equity markets to foreigners may seem fanciful, but it dovetails with another big national objective. China wants to build Shanghai into a global financial centre by 2020, but that requires a deeper and internationalised equity market. Only when that is in place will foreign money descend on Shanghai, together with an army of bankers, lawyers and accountants.

The market capitalisation of Shanghai is now the world's fourth largest, but it is dominated by state-owned firms with only a handful of foreign joint ventures and a few private companies.

The market is off-limits even to many of China's own best and biggest companies, such as the world's largest telecom operator China Mobile and China's top offshore oil and gas producer CNOOC.

They are listed in the offshore market of Hong Kong and despite their expressed interest to return to the mainland, continue to fail to win the green light from Beijing.

Indeed there is no other country which relies more heavily on offshore financing than China. One fifth of the foreign companies listed on Nasdaq are from China, the largest percentage in the world. By pushing its top companies to list abroad, China has gained foreign capital at the expense of the development of its equity market.

Meanwhile back in Shanghai too much money is chasing too few good listed companies. The same companies are often valued at a premium in the mainland versus in Hong Kong.

Chinese investors need more and better investment opportunities. China needs to realise the competition of the 21st Century is not just about amassing capital, but also about building companies that can create wealth.

WHO COMES FIRST?

In the past decade, most of the barriers to open equity markets have been removed. China completed a share reform programme that allowed formerly untradeable state-owned shares to trade, and China's accounting rules are now similar to global standards.

A big block remains in the shape of China's capital controls, which prevent firms from repatriating profits, but the State Administration of Foreign Exchange recently said it will consider relaxing the controls once foreign companies are allowed to list.

When China first talked about introducing foreign listed companies a decade ago, Unilever, whose Lux soap 20 years ago was as coveted in China as Louis Vuitton bags are now, was expected to be the first.

Although that seems unlikely now, multinational manufacturers are still expected to be interested in the hope that a China listing can raise their profile in what is seen as potentially their biggest market.

Instead, first in line will probably be foreign banks keen to raise money in China to fund their local operations. As things stand, their yuan deposit base is too small due to their limited branch network.

HSBC is said by British officials to be in discussions to be the first foreign company to go public in China. The bank, with a Shanghai branch office that opened some 150 years ago, has gained a lot of goodwill for promising not to sell its strategic investment in Bank of Communications while other foreign banks rushed to the exits.

A full listing of foreign companies will offer an upside for China Inc. in that domestic firms with global ambitions will be able to bid for firms using their own shares and Chinese shareholders will have a say on global deals.

In addition, by allowing the Chinese to buy a piece of the world's blue chips on their home soil, the change will assist in the country's ambitions to make the yuan an international currency while keeping a certain amount of capital controls.

China's leaders have made clear they see the credit crisis creating opportunities to flex their financial muscles. Here's one opportunity they shouldn't let pass them by.

-- At the time of publication Wei Gu did not own any direct investments in securities mentioned in this article. She may be an owner indirectly as an investor in a fund --