Security talks put China-US tension back in focus

BEIJING, Mar 20 (Reuters) China's military build-up has come under renewed US criticism, raising tensions before Chinese President Hu Jintao's inaugural trip to Washington next month.

China was the focus at trilateral security talks on Saturday between the United States, Australia and Japan and was singled out in a White House report released last week that urged reform of its trade policies and military transparency.

''It seems that now they've raised concerns and complaints, it could damage the climate when Hu pays his visit. But that's why Hu Jintao wants to talk with his US counterparts,'' said Zhu Feng, an expert on Chinese-US relations at Peking University.

''It will magnify the necessity for both sides to maintain high-level contacts.'' China's military budget, which will rise nearly 15 per cent this year to 35 billion dollars, is just one irritant in relations, with Washington the biggest arms supplier to China's ideological foe, Taiwan.

Washington is also pressuring Beijing to revalue its yuan currency at a higher exchange rate, improve its human rights record and curb rampant piracy of goods.

Two US senators pushing for export tariffs unless China revalues the yuan and US Commerce Secretary Carlos Gutierrez are also set to visit Beijing this week, trips that will highlight frictions in economic relations.

Analysts say raising complaints now may be part of a strategy of laying the controversial issues on the table before Hu's visit.

ENGAGEMENT VS THREATS But Washington may be reluctant to push too far as it tries to engage Beijing on a series of multilateral issues, including Western efforts to curb Iran's atomic ambitions and talks on North Korea's nuclear programmes.

''This has been the US strategy towards China. On the one hand, economically, socially and on the international stage, it tries to engage China,'' said Lai Hongyi, a scholar at Singapore's East Asia Institute.

''But at the same time, on the military and national security front, the U.S. is also making moves to hedge against China's military power.'' Washington also risks alienating its regional allies if it pushes too far with criticisms of China they may not agree with, analysts say.

While US Secretary of State Condoleezza Rice was focusing on China's military last week, Australia made it clear it sees China's rise as more of an economic opportunity than a threat.

China's appetite for raw materials such as grain and minerals that Australia produces made the two increasingly closes trade partners, said David Zweig, director of the Hong Kong-based Centre on China's Transnational Relations.

''The Australians are in a pickle,'' he said.

In the run-up to Hu's trip -- his first formal visit as president -- China has already made concessions on human rights, releasing early at least three political prisoners and dropping a case against New York Times researcher Zhao Yan who had been accused of revealing state secrets.

But analysts cautioned that China would be no pushover when Hu goes to Washington.

''I think the basic tone in Beijing is that we can only do what we can,'' said Peking University's Zhu. ''We can't sacrifice national interest just for concern in the United States.'' REUTERS KD PM1300