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The BBC's Rob Watson in Washington
"Beijing is concerned that Mr Bush will take a harder line towards China"
 real 28k

Wednesday, 7 March, 2001, 00:24 GMT
US wary of Chinese military build-up
Chinese military officials arrive at the national party conference in Beijing, March 2001
China's military is getting the funds it wants
The United States has said it will keep a close eye on a planned Chinese military build-up after Beijing announced it would increase its defence budget to about $17bn.

US Secretary of State Colin Powell
Mr Powell said China and the US are not enemies
US Secretary of State Colin Powell said on Tuesday the US would "see how they spend this money, see if it in any way is threatening to our interests in the region or whether it's just modernisation".

Mr Powell said the US did not see China as an enemy, but as a trading partner and "a regional competitor from time to time".

But the US and China may be heading towards a showdown over Taiwan, which Washington is bound by treaty to sell arms to.

Chinese warning

Beijing warned the Americans on Tuesday not to go ahead with the planned sale of sophisticated weapons to Taiwan, which China regards as a renegade province.

China said the sale would cause "serious dangers".

The warning came after Finance Minister Xiang Huaicheng told parliament the military budget would rise this year by 17.7% to about $17bn.

US destroyer
Taiwan wants to buy US destroyers
He said the increase, which is set to continue for the next five years, would go towards higher pay and new equipment.

Taiwan immediately warned that the boost in spending was a threat to the island and neighbouring countries.

China's foreign minister denied the spending increase was directed at Taiwan.

'Not partners'

US President George W Bush has already made it clear that - unlike Bill Clinton - he does not regard China as a "strategic partner".

Chinese Vice-Premier Qian Qichen is due to visit Washington from 18 to 24 March, making him the highest-ranking Chinese official to come to the US since Mr Bush took office.

Washington is due to decide in April what new weapons to sell to Taiwan.

Under the Taiwan Relations Act the US is required to make available sufficient arms to allow the island to defend itself.

Chen Shui-bian
President Chen's election may have prompted China to boost spending
Taiwan is understood to want to purchase Aegis destroyers and PAC-3 anti-missile systems, a follow-on of the Patriot missile used in the 1991 Gulf War.

But the Chinese foreign minister said such sales would send "a very wrong signal to the Taiwan authorities".

The island's president, Chen Shui-bian, who was elected last year, was a firm supporter of Taiwanese independence in the past, but China has threatened invasion should Taiwan move in that direction.

The Chinese military has been reduced from about 4.2 million personnel to about 2.5 million over the last two decades.

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