Environmental pollution is seen as one of the graver consequences of China’s rapid development. The countryside, and with it arable land, is fast diminishing. More and more cities are springing up. The plan is to, move 400 million people to the cities in the next 25 years, creating a need for new roads, housing and other infrastructure on a truly massive scale. China now imports grain and also huge quantities of other resources. It is the world’s largest consumer of copper, aluminium and cement and the second biggest importer of oil. It has already become the world’s second biggest generator of carbon dioxide emissions and could overtake the United States as the biggest source of greenhouse gases in three decades. Coal already supplies 75 per cent of the country’s energy needs, and more coal plants are being built, raising the prospect of ever more coal dust and acid rain. As car ownership has been doubling every few years, if per capita ownership were to reach United States levels China would have to find room for 600 million cars — more than exists today in the entire world. But despite the scale of the challenges China now faces all is not gloomy. There seems to be a new public awareness building of the dangers of destroying the resources on which China’s long term health and prosperity depend.

Most importantly, the Chinese leadership is fully aware of the dangers of an, overheated economy and is taking timely remedial measures. Premier Wen Jia Bao issued a sobering warning to the nation early this year. He said that unhealthy banks (China’s banks are technically insolvent, according to Standard and Poor, with bad debts making up 45 per cent of their loans), over invested industries and an increasingly unwieldy economy posed the biggest challenge to China since the SARS epidemic. He told a press conference at the end of the National People’s Congress that the economy had reached" a critical juncture — deep seated problems and imbalances in the economy over the years have not been fundamentally reversed, and new problems and imbalances keep cropping up in the process of rapid development".

The Prime Minister said that "excessive investment, shortages in energy, transport capacity and important raw materials: a decrease in grain output in recent years, and an obvious trend of rising prices were challenging the government". "Macro control is more difficult than ever", he admitted. "If we adjust well, we may be able to keep the ship of the Chinese economy steady at a relatively fast clip. If we don’t, it will be difficult to avoid setbacks". Using a colourful analogy in a speech delivered in Europe, the Prime Minister compared himself to "the driver of a speeding car, trying to avoid an emergency stop. We cannot slam the brakes, we have to press the brakes gently", he said.

The question on the world, particularly other Asian countries, asks themselves is no longer whether China will rise but in what way it will rise, and what level its rise will reach. The core issue seems to be whether China will rise peacefully or whether it will go the way that historically other world or regional powers have gone, namely, expanding their influence and interests by military means. China’s relations with its neighbouring countries have markedly improved in recent times and the peripheral environment is relatively stable. The general situation is conducive to China’s realisation of the strategic goal of building an affluent society through concentration on sustainable economic growth and all-round development of the social sector, thus blazing a trail for a peaceful rise which is diametrically different from the ways other major powers rose in history.

After the founding of the Peoples’ Republic the issue of national security was for a long time considered the dominant question involving the fundamental national interest of China, making the country unable to concentrate on developing the national economy. This was due to both the objective environment and subjective mistakes. In the 50s and 60s China faced military threats and economic blockage from the two super powers of the time — the United States and the Soviet Union. In such a hostile environment China had to de-emphasize economic construction in favour of enhancing national security. The spread of the ultra "left" ideology at home and the inappropriate linking of threats emanating from the international situation with domestic political struggles, coupled with the inherent drawback of restraints arising from the planned, economy, severely hindered China’s economic and social development. However, since the plenary session of the 11th Central Committee of the Communist Party of China priority has been restored to domestic economic construction thus laying the foundation for great achievements on the economic front. It would lack good sense and be totally unnecessary for China to seek military expansion and international hegemony to advance its economic interests. In my view, such a course of action would be inconceivable. As Deng Xiao Ping has said " Interventionist military powers cannot be the cornerstone of any peace loving country. National capabilities come out of the broadest possible development of people in the country. The process of development is not purely political. It is a process of all-inclusive reforms, reconstruction and modernization which induces economic growth".

We know that prevailing perceptions are as important as current reality in assessing an international situation. It is, therefore, necessary to examine some of the perceptions that the rest of the world has of Chinas ongoing ascendancy.

Let me refer to China and South Asia. Long-standing tensions with India were progressively dealt with through a series of consultations preceding Prime Minister Vajpayee’s is visit to China last June. On that occasion Chinese Premier Wen Jia Bao, said: Asia is an important part of Asia, and China welcomes equal treatment and peaceful co-existence among South Asian nations. China hopes to see further relaxation of relations between India and Pakistan and supports efforts to ease tensions and safeguard peace between the two countries. China would never seek to push its private interests in South Asian affairs and the friendly cooperation established among China and South Asian countries would never target any other country. China would continue its role as a constructive player in promoting peace and development in South Asia".

The June 2003 visit of Prime Minister Vajpayee to China with a 40-member business delegation proves that economic ties could be strengthened. Trade between India and China has increased from US dollars 338 million in 1992 to nearly US dollars 5 billion in 2002. The Declaration on Basic Principles for Bilateral Relationship and Comprehensive Cooperation was signed during this visit as well as ten separate bilateral agreements on education, culture, border trade and quarantine issues. China takes great pains to explain that the improved relationship with India does not in any way affect its long-standing relations with Pakistan. Sikkim is no, longer on the Chinese Foreign Ministry’s web site as an independent country. India accepts Tibet as part of China.

China’s relations with other South Asian countries — Bangladesh, Nepal and Sri Lanka — are in good order. South Asian countries have benefited in different ways from China’s generous assistance. The bilateral trade volume with Bangladesh in 2003 was US dollars 1.2 billion, although imports reached only us dollars 32 million. The total trade volume between China and Sri Lanka is currently US dollars 330 million. The balance of trade between the two countries has been heavily in favour of China. The unfavourable balance of trade reached peak level of US dollars 247 million in 2003. Pakistan’s total imports from China amounted to US dollars 575 million and total exports amounted to US dollars 228 million. These figures help to underline the close economic links between China and the South Asia.

Comparing South Asia taken collectively with China the average per capita annual income is US dollars 440 as against US dollars 780, exports are US dollars 15.1 billion against US dollars 249 billion, imports are US dollars 18.3 billion against US dollars 217 billion, foreign direct investments are US dollars 3.1 billion against US dollars 40 billion and internet users are 5.4 million against 8.9 million. China has evinced interest in establishing a link with the South Asian Association for Regional Cooperation (SAARC). At the SAARC Summit in Male in 1997 Sri Lanka proposed that SAARC should establish a link with China. The proposal received only a lukewarm response from the other countries. Although the matter could not be pursued at the Colombo Summit of 1998 because relations between Pakistan and India were considerably strained at that time, Sri Lanka informed China bilaterally that in its individual capacity it believed that SAARC should establish a link with China. At the Islamabad Summit in 2004 a statement was read out from the Prime Minister of China wishing the Summit success. Shortly after the Summit the Chinese Ambassador to Nepal made a formal proposal to the Secretary General of SAARC for establishing a linkage between China and SAARC. The Secretary General has sought the views of member States on this proposal. The matter will come up at the next Summit in Dhaka in January 2005. Subject to the observations of the Secretary General on the views of other member States Sri Lanka would consider the proposal with favour.

Sri Lanka’s view of China’s place in the modern world is conditioned by many factors.

First, the role of history and the influence of Buddhism. Sri Lanka’s earliest contacts with China date back to 206 BC during the Han Dynasty in the reign of Emperor Wing. Thirteen missions were sent to China by the kings of Sri Lanka, between 13 and 989 AC. In 401 AC, a Chinese monk, Fa Hsien of the Eastern Jin Dynasty, came to Sri Lanka to study the Buddhist scriptures. He wrote a book titled "Accounts of Buddhist Kingdoms In 1990, to commemorate the visit of Fa Hsien to Sri Lanka, the Government of China granted three million Yuan to construct the "Fa Hsien — Mahasen Complex" at one of our ancient archaeological sites. In 428 AC a Sri Lankan King sent a model of the Sacred Tooth Relic shrine to the Chinese emperor. In 527 AC another King sent an Ambassador to the Chinese emperor’s court. During the Tang Dynasty 618 to 907 AC several Chinese monks visited Sri Lanka to learn Theravada Buddhism. Fragments of Chinese bowls and coins unearthed in Sri Lanka which were analyzed in 1925 show that most of the coins belong to the Tang dynasty. After the 8th century AC two-way missions decreased due to the, persecution of Buddhists in China. During the Ming dynasty 1368 to 1644 AC the island was visited twice by Admiral Cheng Ho. An inscription regarding his visit presently lies in the National Museum in Colombo. One of the greatest emperors of the Southern Kingdoms Of China, Liang Wu Ti of the Liang dynasty, was a Buddhist. It is evident that religious contacts played an important role in developing these ancient ties between the peoples of the two countries. The establishment of links with China in those distant times was a significant initiative on the part of the rulers of Sri Lanka, one of the first countries in Asia to undertake such initiatives. It could be said that through Buddhism Sri Lanka made an impact on diplomacy. As the repository of the Theravada doctrine, Sri Lanka attracted pilgrims and scholars from other countries.

Second, prompt recognition of the People’s Republic of China. Ceylon regained its independence in 1948 after nearly 450 years of foreign rule. A new chapter in bilateral relations with China was opened with the founding of the People’s Republic in October 1949. Soon after the People’s Republic was proclaimed, Ceylon ordered the closure of the Kuo Ming Tang consulate in Colombo in December 1949. By January 1950, Ceylon had extended diplomatic recognition to the new People’s Republic of China.

Third, the historic rubber- rice pact of 1951. In less-than one-year from the date of the Chinese Peoples’ Liberation, when war broke out on the Korean Peninsula, the fledgling government of China dispatched a million volunteers under Marshal Peng to assist North Korea. The Western block and its allies, 17 in all, who fought the Korean war under the United Nations banner, blocked the export of raw materials and commodities which in their perception were considered to be strategic, to the newly founded People’s Republic of China. Rubber was one such commodity. It was against this backdrop that Ceylon negotiated with China in December 1951, against strong opposition from the West, a barter pact which would facilitate the exchange of Ceylonese rubber for Chinese rice. This historic, barter pact was extremely beneficial to both countries given their urgent needs at that time.