http://www.iht.com/articles/2006/03/13/news/rice.php

JAKARTA: When the U.S. secretary of state, Condoleezza Rice, visits an Indonesian Islamic primary school here Tuesday and later makes a speech praising this nation for its rapid switch to democracy, she will be touching the mainstay of Washington's concerns about the world's most populous Muslim country: that it sticks to the path of moderation.

At the school, one of many in Indonesia now supported with American funds, Rice is expected to share some of the limelight with a character from the children's television show, "Sesame Street," an attempt to soften the image of America as anti-Muslim.

But alongside what often seems like a one-note U.S. agenda of fighting terrorism, Indonesia and Australia, the next stop on Rice's journey, have another overriding interest. It can be summed up in one word: China.

For Indonesia and Australia, proximity to China is all. For them, China is not just a rising power as it is often described in Washington, but it has already arrived as the regional power in Southeast Asia that can spread economic benefit.

Analysts say China is driving Asian economic integration through the Association of Southeast Asian Nations, which excludes Washington, and by 2010 the region's trade with China is likely to outstrip trade with the United States.

To sweeten the economic bonds, China has not been too pushy in other areas, so far stepping politely in its strategic and diplomatic goals as it seeks the affections of surrounding countries, many of which have had longstanding relations with the United States.

"China has now established itself as the paramount regional power in Southeast Asia," said Milton Osborne, a former Australian diplomat and scholar on the region at the Lowy Institute of International Affairs in Sydney. "This is widely recognized in Southeast Asia, however people choose to express the idea."

Before leaving Washington, Rice sounded a cautionary note about China, a tone with a harder edge than typically heard in Southeast Asia.

She warned of the Chinese military buildup, a favorite subject lately of the Pentagon, in particular the development of Chinese submarines that could restrict U.S. military access to Taiwan.

Rice spoke of a possible long-term "negative" role of China, and she seemed to suggest that the United States might be recruiting partners, particularly Australia and Japan, in an effort to contain China, a notion that analysts in the region say seems pass¨¦.

"I think all of us in the region," Rice said, "particularly those of us who are longstanding allies, have a joint responsibility and obligation to try and produce conditions in which the rise of China will be a positive force in international politics, not a negative force."

In Indonesia, China has turned on the charm, transforming a relationship that was once fraught with suspicion into a blossoming economic partnership.

Chinese state energy companies have bought into Indonesian oil and natural gas fields in Java and Papua, and are expected to bid on tenders for new power plants. In 2004, Indonesian exports to China increased by 232 percent compared to the previous year.

American oil companies have long had operations in Indonesia, and Exxon Mobil, after a protracted battle with successive Indonesian governments, announced Monday that it will develop the large Cepu oil field on Java.

But in a measure of the sensitivities about American corporate interests in nationalistic Indonesia, American businessmen said they expected Rice to downplay any public comment about the Exxon Mobil deal.

"These are some major new important competitors for business," James Castle, the president of the American Chamber of Commerce in Indonesia, and a longtime business consultant here, said of the Chinese. "If America wants to maintain a presence it's going to have to work a lot harder. The Chinese are a big player."

In Australia, where until a few years ago China was regarded with distrust, Beijing has made strides, economically and diplomatically, that are even more remarkable, especially given the hardy alliance between the conservative Australian prime minister, John Howard, and President George W. Bush.

The enduring economic boom in Australia is almost solely due to the export of natural resources to China: huge amounts of iron ore, alumina and soon natural gas and uranium. In the latest move, the Australian government is expected to sign a deal next month to sell uranium to China for use in its nuclear power plants.

Australia, which holds about 30 percent of the world's uranium deposits, has said it will sell uranium to China because Beijing is a signatory to the Nuclea