It is significant that the company Panama chose to run many of the Panama Canal operations is based in Hong Kong. It is, therefore, like all companies operating from the People's Republic of China, subject to the influence and control of the communist Chinese leadership in Beijing. In an armed conflict, this could bode ill for the United States and its allies.

The last few years have seen China make considerable gains at U.S. and British expense. The American withdrawal from Philippine bases early in the 1990s left China in a dominant position in the region. Britain's return of Hong Kong to China in 1997 elevated the country to the status of second-richest country in the world in terms of its gold and foreign-currency reserves. This freed China to spend much more on military projects. The Portuguese turnover of Macao to China on the same day as the Panama Canal handover freed China to concentrate its efforts on taking back Taiwan—a move that, if successful, would make China the richest nation on earth in terms of its monetary reserves.

The possible dismemberment of Indonesia would also leave China stronger. Any decline in the power of Indonesia would naturally result in a comparative strengthening of Chinese power and influence. India is a potential rival, but presently it is too occupied with its rival Pakistan to get too involved in any struggle with China.

China benefits, too, from the commercial domination of many nations in the region by its Chinese diaspora—Chinese people who have settled throughout the area. Ironically, the former British sea base of Singapore is populated mostly by Chinese people whose ancestors moved there during colonial times. Their nation is a thriving city-state whose people are richer than many in the Western democracies.

Any perceived threat from Beijing is likely to cause Japan and Russia to build up the size of their military forces. Now, with the relinquishing of the Panama Canal, Chinese influence may extend into Central and South America.

Trade agreements that will likely lead to the admission of China into the World Trade Organization (WTO) will probably give another boost to the nation's rapidly growing economy. However, there is also concern that agreements opening China to more foreign competition could lead to internal unrest as hundreds of thousands of Chinese people lose their jobs during the restructuring that will take place. China is an awakening giant. An unstable giant could destabilize the region.

A century ago, at the dawn of the 1900s, Britain's period of domination was drawing to a close, with the United States already on the horizon as the new superpower. We see history repeating itself, this time with the United States dealing with the realities of imperial overreach while China and others seek to expand their influence. GN