Reading tea leaves is risky business. Reading Chinese tea leaves - there are over a thousand varieties - is fraught with even greater risk.

Nevertheless, it is necessary to occasionally lift the veil and discern what polite smiles and commercially enticing conversations conceal. More so, since China appears to have replaced its policy of 'taoguang yanghui', or 'lie low, bide your time', with a more assertive one.

Changing strategic equations in Asia seem to have prompted Beijing to begin reviewing its Asia strategy. The US's 'undisguised interest' in Asia and recent initiatives in Myanmar and North Korea have attracted particular concern. Beijing assesses that Japan is preparing to play a larger role in Asia and Japanese premier Yukio Hatoyama's India visit would have been interpreted as part of the effort. China's concerns were reflected in an article in an influential Beijing-owned Hong Kong daily. Observing that Asia is "undergoing big changes" and "a major restructuring", it noted Hatoyama's proposal for an East Asian community, Seoul's suggestion for new diplomatic thinking on Asia and Singapore's recommendation that America get closely involved in East Asian affairs.

Visits recently to Japan, South Korea, Myanmar and Cambodia by Chinese vice-president Xi Jinping, widely tipped to succeed Chinese president Hu Jintao, indicate Beijing's interest in the region. Chinese authorities took care to ensure that each visit was punctuated with a significant gesture. In Tokyo, he was granted audience by the emperor despite short notice. In Yangon, he was received by the normally reclusive senior general Than Shwe. Cambodia sent some Uighurs back to China and certain incarceration a day prior to Xi's arrival. While these hint at Xi's rising stature in the Chinese Communist Party hierarchy, they particularly display China's clout.

Military strength has been key to China's foreign and strategic policy. Last year, the People's Liberation Army (PLA) conducted over 23 exercises. Unlike in previous years, almost none contained an amphibian element. The exercises suggest Beijing envisages a possible conflagration along China's periphery. China's assertiveness has been in evidence elsewhere too. At least five confrontations occurred between Chinese and US navy vessels in the South China and East China Seas in the course of the year and Chinese vessels clashed with Vietnamese craft.

China's territorial disputes in the region centre on the resource-rich Spratly and Paracels archipelagos which sit atop an estimated 130 million barrels of oil and gas. The National People's Congress, China's version of a parliament, is currently deliberating a 'Draft Law on the Environment Protection of Sea Islands', which stipulates that ownership of the uninhabited islands will revert to the state and that the state council of the People's Republic of China will exercise control over them. The draft appears to include the Senkaku (Diaoyutai) Islands disputed between China and Japan in the East China Sea and Nansha (Spratly) Islands disputed between China and a number of countries including Malaysia, the Philippines and Vietnam. Tension has escalated. Last March, Abdullah Ahmad Badawi, then Malaysian prime minister, inspected the Spratlys and claimed sovereignty. That month the Philippines promulgated the 'Philippines Baselines Law' asserting sovereignty over some of the Spratlys. Once it enacts the draft law, Beijing is likely to get more assertive.

Chinese assertiveness has already triggered quiet alarm in the region. In Taiwan, the popularity of KMT president Ma Ying-jeou, increasingly viewed as pro-Beijing, has ebbed. Strategic analysts in Japan privately voice increasing criticism of Hatoyama's policies towards China and the US. In December, Vietnam convened a conference to discuss the Spratly and Paracels Islands territorial issue.

India has for the past two years been subjected to increasing diplomatic and military pressure. The list of unfriendly actions is long. Most recent instances include designating the entire state of J&K as disputed by the practice of issuing loose-leaf visas to its residents. Official Chinese protests objecting to the separate visits by India's prime minister and the Dalai Lama to Arunachal Pradesh were noticeably tougher than in the past. Chinese academics who visited Delhi last October, echoing Beijing's view, asserted that the Dalai Lama's visit was instigated by the Indian government and hinted at the possibility of punitive action.

The reported incidence of intrusions by Chinese troops along the entire Line of Actual Control remains high. This is accompanied by a major build-up of defences in Tibet. China is building seven modern airfields in the Tibet Autonomous Region. Sixty airfields are planned by 2020. The number of fighter aircraft deployed in Gongga near Lhasa has increased. The network of border defences, roads and intelligence outposts has been expanded. The PLA's annual troop rotation in Tibet was completed quickly; troops no longer have to go via Lhasa but can directly reach many border locations from the Chinese mainland, reducing transportation time.

The window for China's neighbours to formulate policies to engage Beijing while preparing against possible adventurism will not be open for long. Once the Shanghai Expo concludes in October 2010, Beijing could begin to seriously re-examine its Asia strategy, evaluating the advantages of enforcing its territorial or perceived strategic goals.

The writer is a former additional secretary, cabinet secretariat.

  Source: The Time of India