Rice to discuss China, Iraq in Australia

JAKARTA, Mar 15 (Reuters) U S Secretary of State Condoleezza Rice, seeking to cement a growing security relationship with Australia, will discuss China's emergence as an Asia-Pacific power on a visit starting tomorrow.

She will also thank Australia for its support in Iraq during the three-day trip. With violence increasing in Iraq, Washington is anxious to retain as many foreign troops there as possible. Australian Defence Minister Brendan Nelson promised this week his nation's contingent would stay well into 2007.

But Australia has taken a less aggressive stance than the United States towards Beijing on most issues, from human rights to the economy, and Washington is concerned that the country is being overtaken by what one U.S. official called ''China fever''.

Rice is to join foreign ministers from Australia and Japan on the last day of her three-day trip on Saturday for talks expected to focus on Iraq, China and North Korea, U S officials said.

''From Australia's point of view, China has become a giant fountain of money and Australia wants to lap up some of that money just like other countries in Asia,'' said Dana Dillon, an Asia specialist at the Heritage Foundation in Washington.

''They are very reluctant to do something that would stop that flow of money from China,'' he added.

MILITARY BUILDUP Rice is particularly concerned about China's military buildup, telling reporters she wanted to ensure Beijing's military might was not ''outsized'' for the region.

China's 2.3 million-strong People's Liberation Army is the world's largest standing force. Its official defence budget is set to rise 14.7 per cent to 283.8 billion yuan (35 billion dollars) in 2006, Beijing has said.

Australian Foreign Minister Alexander Downer has been a little more restrained, describing Saturday's trilateral security meeting as an opportunity to discuss harnessing the growing power of China to the advantage of the region and managing its rise so that Beijing can play a positive international role.

''(The security talks) shouldn't be construed by China as a policy of containment of China or in any sense hostile towards China. There are plenty of issues for us to talk about other than China,'' Downer told Australia's Sky News.

Australia earns billions of dollars annually from sales of iron ore and other raw materials to China's mushrooming economy.

Much of Rice's trip will focus on Iraq, with a speech on the issue on Friday as well as a visit to Australian troops at Victoria Barracks in Melbourne. She will also lay a wreath at the city's Shrine of Remembrance.

As an original member of the ''coalition of the willing'' that supported the U.S. invasion of Iraq in 2003, Australia was one of the first countries to commit forces and still has about 1,300 troops stationed there, mostly in the south of the country.

Critics of Prime Minister John Howard, who has been satirised as the U.S. ''deputy sheriff'' for Asia because of his close ties to President George W. Bush, have asked why Australia needs to fight in Afghanistan or Iraq when there are threats closer to home.

As in the United States, recent opinion polls in Australia have shown declining support for involvement in Iraq.

Part of Howard's loyalty to the Bush administration and its ''global war on terrorism'' is possibly linked to his being in the United States on September 11, 2001 when hijackers rammed planes into buildings in Washington and New York.

''I think that personal connection of time and place is sometimes often washed over but it is very significant,'' said Australia's ambassador to the United States, Dennis Richardson.

While U.S.-Australian ties are close, there has been no American ambassador in Canberra for more than a year.

However, a State Department official said Washington had now named Robert McCallum, a longtime lawyer friend of Bush, to the vacant post. He declined to say whether the appointment had been timed to coincide with Rice's visit.

Rice had originally been scheduled to visit Australia in January but cancelled the trip when Israeli Prime Minister Ariel Sharon became gravely ill.

REUTERS SB VC0950