Hu finds right approach in regional diplomacy

China's rising power, reach and ambition pose a dilemma for Southeast Asia. Nations are clamouring for the economic and trade benefits from their relations with China, yet there is wariness about its intentions. A military misstep, poorly thought-out remark by a leader or disregard for accepted principles could easily raise tensions. President Hu Jintao seems to have found the right formula; the careful diplomacy on show during his visit to Malaysia and Singapore this week is precisely what is needed.

Malaysia and China are rivals for the gas and oil reserves believed to be around the contested Spratly Islands in the South China Sea. Singapore's close military ties with the United States rankle Beijing. At an official level, these went unmentioned by Hu and his delegation. In their place were agreements and friendly gestures.

Deals were struck with Malaysia on a rail project and co-operation on banking, education and infrastructure development. China plans to increase demand for palm oil and timber. Hu ended his visit by symbolically touring Melaka, a historic port with centuries-old Chinese links. The mix of business and soft power is the best way to overcome differences and broach tougher issues.

Beijing's relations with Singapore are touted by both sides as strong, but occasional flaws appear. Founding father Lee Kuan Yew publicly voiced concern about China's military build-up during a visit to the US last month. His son, Prime Minister Lee Hsien Loong, outraged Beijing in 2004 when, as deputy prime minister, he made a private visit to Taiwan. The torch for the Beijing Olympics went through Malaysia and Indonesia, but bypassed the island nation. Whatever the cracks in relations, Hu papered them over on Wednesday night when he announced at a banquet that China was lending Singapore two rare giant pandas.

Each Asian country has, to varying degrees, cause for concern about China's emergence. Border disputes, conflict over resources and concerns about command of economies abound. Beijing makes no secret of its desire to reassert its traditional dominant role in the region. It has a deep sense of historical grievance; the US military presence irritates and Japan's occupation has not been forgiven.

There has been a resurgence of ties between Chinese communities in Asia and China since the 1980s. In 1991, Beijing consciously began to build relations through the Association of Southeast Asian Nations. The China-Asean relationship has become the key nexus around which the rest of East Asian integration is taking place. Through the grouping, regular high-level meetings are taking place and partnerships being built in the region. Economics and trade are centre stage, but China is increasingly using soft power. Given the fears and doubts, this makes good sense. Through cultural and sporting ties, trust and understanding will grow.

An engaged, sensitive, responsive diplomacy is required. Hu's visit to Southeast Asia would seem to point towards such a strategy. It does not serve China's interests to cause alarm, after all: about 70 per cent of China's population will live in urban areas in the next 20 years. Friendly ties with other countries are essential to provide the resources and materials for that transformation.

China is on a steep learning curve with international relations. The occasional stumble is to be expected. As it becomes more engaged and comfortable with the wider world, a much more positive China will emerge. The sensible diplomacy increasingly on display in Asia is the right approach.