The Age

East Timor's big, rich Beijing buddy

Lindsay Murdoch, Dili March 3, 2007

STREET gangsters have a favourite place on Dili's waterfront. Just past the fortified Australian embassy residential compound, they run to hide behind a high fence on a building site with an unending supply of rocks.

Most people driving along the beach road are too busy looking out for rocks coming their way to notice a sprawling complex being built on the site overlooking the waters of the Wetar Strait.

The architect's plans on a billboard at the front of the complex look like a luxury resort hotel in Bali, with coconut palms, fountains and garden walkways.

But the building due for completion by September will be the home of East Timor's Foreign Ministry, one of the country's most impressive buildings and the first of three to be built as part of a "charm offensive" by China.

As the fledgling Government in Dili has struggled to recover from violent upheaval last year, which left dozens dead and almost 3000 buildings destroyed, China has pushed ahead with Dili's biggest-ever construction projects.

Dili-based diplomats are watching curiously how the country with the world's biggest population is spending many millions of dollars to establish an economic, diplomatic and strategic foothold in one of the smallest nations on Australia's doorstep.

They say China is looking to East Timor for a source of raw materials and energy supplies and wants to develop close ties with Dili as part of a strategy to expand Beijing's influence in South-East Asia.

Diplomats say China is also keen to use close ties with Dili to limit Taiwan's ambitions in the region.

As well as the Foreign Ministry, China plans to build a new presidential palace and its own embassy, all overseen by Chinese engineers and built by Chinese and Timorese workers.

China has wooed East Timor's leaders with all-expenses-paid trips to China, established tentative relations with East Timor's army, including donating equipment such as tents and uniforms, and has paid for at least six army officers to be trained in China.

While China is a small donor compared to Western countries such as Australia, last year it sent 500 tonnes of rice and 50 tonnes of cooking oil to Dili at a time when it was desperately needed.

China has also agreed to build houses for East Timor's soldier veterans on Dili's outskirts.

The building of a presidential palace on a former heliport in central Dili is embarrassing for Australia, which has just spent millions of dollars building a warehouse complex on the site for its 800 soldiers deployed in the country.

Australia has been asked to move the building several hundred metres to make way for China to a build a palace for whoever wins presidential elections due on April 9. Prime Minister Jose Ramos Horta said the land had been allocated previously for presidential accommodation.

Work is set to start soon on a grand new Chinese embassy on another waterfront site. The building will dwarf most other diplomatic missions in East Timor, with space for more than 150 staff. China has also given East Timor an embassy building in Beijing.

Australian academic Kate Reid-Smith has raised the possibly that East Timor could eventually become China's newest satellite state in South-East Asia, noting a "remarkable philanthropic shift" in China's involvement in South-East Asia.

Ms Reid, a Chinese linguist who has researched China's role in East Timor, said that the two countries' emerging relationship seriously undermined the sphere of influence of long-time neighbouring maritime powers Australia and Indonesia.

Australia, she said, had continued to take the status quo for granted while China had been "quietly building its rapport" in the region.

Ms Reid said that East Timor was "more than aware of its geographical bargaining chip".

If China secured working control of East Timor's sea lanes, the capacity to isolate Australian and Indonesian territorial and military assets, considered strategic threats to Chinese interests, would open a regional Pandora's box, Ms Reid said.

But Mr Ramos Horta said that despite concerns among Western countries that China was emerging as a world power, Beijing should not be feared.

"I do not see how China should be seen as a rival," he said. "Demographics dictate that the Chinese have to create jobs for their millions of workers who come on to the market every year. That means continuing to expand their economy, and expanding their economy means stability in the world … China needs stability in the region and the world for its own economic expansion."

China's ambassador in Dili, Su Jian, agreed to be interviewed for this article, but had to leave the country before a meeting could be arranged.

An official at the embassy said China wanted to encourage Chinese companies to invest in East Timor.

"Chinese companies are not familiar with Timor Leste (East Timor)," the official said. "The opportunities here are good but the infrastructure is not."

PetroChina, one of China's largest state-owned energy companies, has financed a seismic study for oil and gas across East Timor.

The official said China had focused on buildings to help East Timor "because that is what we are good at".

China moved quickly to woo Dili, becoming the first country to establish diplomatic ties the day after East Timor formally gained independence in 2002.

But the communist giant has moved with equal speed to expand its political, economic and security linkages throughout the world, including small African and Pacific nations, creating a shift in the international balance of power, experts say.

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