The most eye-catching move in this process was the announcement, at the end of the Asean-plus-three meetings in Brunei last month, of a plan to create a free-trade area between China and the 10-member Asean within 10 years.

Sources of distrust between China and Asean have included multilateral territorial disputes, especially on the Spratly Islands in the South China Sea; China's historic support for Southeast Asia's communist parties; and China's growing economic and military capabilities.

But China's admission to the World Trade Organisation last month provided a compelling reason for Asean to engage Beijing quickly, as many countries fear being inundated with cheap Chinese goods and agricultural produce. Foreign investment and trade that used to flow Asean's way is likely to be diverted to China. More economic co-operation with China would also help to compensate in part for the export loss caused by the global downturn.

The Sino-Asean free-trade area decision, which would provide Asean with preferential access to China's growing market, is Beijing's strategic move to pacify Asean's economic worries in the short run and to boost regional leaders' dialogue in the longer term to ensure stability in China's Southeast Asian backyard.

The proposal makes economic sense for China, as it does not have the supply of commodities needed to continue to fuel its growth. A bigger regional market for its goods could also act as a buffer against the trade and political demands of the US.

According to a study by the Singapore government, Asean's inter-regional trade contributed to a third of its total trade volume in the 1980s. The share surged to beyond 50 per cent in the 1990s. The study revealed that the surge was not due to increased trade between Asean and Japan but increased trade with China.

Premier Zhu Rongji signalled the importance China attached to Asean by proposing in 1998 that the Asean plus-three meetings be expanded to include financial ministers and central bank governors in the region.

Negotiations over a code of conduct in the South China Sea between China and Asean over the disputed territories have been slow. But a member of an expert group at the Asean plus-three meetings, Shi Chunlai, said he expected the code to be signed next year. "There are conflicts of interest between China and Asean but the two also have a huge area of mutual interest," said Mr Shi, a senior researcher with the International Relations Research Institute of the Foreign Ministry.

"If the dispute among nations over the Spratly Islands cannot be resolved, China is committed to jointly develop the archipelago with concerned Asean countries instead."

China hopes the summit with Asean, Japan and South Korean leaders will lead to conventional regional security co-operation.

"Last month's Asean plus-three summit has started the co-operation on non-conventional regional security issues. Leaders condemned 'in the strongest terms' the September 11 attacks on the United States and pledged to co-operate in the war against terrorism," Mr Shi said.

China hopes such developments will lead to more in-depth regional security co-operation on curbing drug trafficking, pirates, arms smuggling and illegal immigrants. The mainland also hopes co-operation will bring conventional regional security ties such as regular exchanges of military and national security officials.

But the region's leaders were sceptical of a proposal to expand the Asean-plus-three summit to include all East Asian countries. They were equally reluctant to build a mega-regional trade bloc to cover all East Asian counterparts.

While strengthening ties with China, Japan and Korea last month, Asean leaders rejected the "East Asia summit" proposal, fearing it would dilute Asean's leading role in the regional summit. The insistence that the venue of each Asean-plus-three meeting be held in Asean countries demonstrated the bloc's caution against expansion of influence by other Asian countries, including China.

Meanwhile, China also did not agree on a proposal to consider setting up a China-Japan-South Korea free-trade area due to the development gap between China and Japan.