Asian crisis threatens stability

Asian crisis threatens stability

CANBERRA (Reuters): Asia's financial crisis could undermine regional stability by affecting the military strength of Asia's middle and smaller powers, Australian Foreign Minister Alexander Downer said on Tuesday.

Downer said Australia did not see any immediate threat of military conflict in the region because of the crisis, but the full implications would not be seen for some time.

"We don't think it will have a significant impact on strategic relativities between the major regional powers of the United States, China and Japan," Downer told a foreign investor conference in Canberra.

"But there may be some impact on the relative power of middle and smaller powers and changed economic relativities might undermine the cohesiveness the region had been able to achieve."

His comments come at a time of heightened tension in parts of the region. Japan said it had identified two rogue ships which fled after violating its territorial waters last week as North Korean spy ships. North Korea on Monday accused Japan of faking the incident.

Diplomatic ties between China and the United States have been strained after Washington decided to sponsor a United Nations resolution to censure Beijing over human rights abuses.

Relations were already sour over several disputes, including the alleged theft by China of U.S. nuclear technology.

"The implications of the economic crisis for regional security will take some time to become fully apparent, and will in any case depend on how long the crisis lasts and how heavy an impact it has on different countries," Downer said.

"The least we can say is that our strategic environment is now less certain and much more complex," he said.