SINGAPORE'S senior minister, Lee Kuan Yew, sees a real opening for progress in the long-deadlocked talks between China and Taiwan and says he hopes that the US administration of George W. Bush will not "precipitate a crisis over Taiwan."

In an interview with the International Herald Tribune, Mr Lee said that both China and Taiwan appeared to want to avoid conflict and that Beijing had recently taken some significant steps to make it easier for Taipei to respond and begin to talk.

Mr Lee said he expected that the Bush administration would need "6 to 18 months of testing" before it settled its China policy.

But he warned that if during this period the Bush administration pressed ahead with plans to build a missile defense shield, it would "change the fundamental balance between China and the US" and create a crisis that would make other Asian countries nervous.

Mr Lee, one of Asia's most experienced leaders, maintains close contacts with senior officials from both China and Taiwan.

"This is too critical an issue for China," he said, alluding to pressure from some Republicans who want the Bush administration to have closer ties with Taiwan, which Beijing regards as a rebel province.

"It's as if you tell the Russians that Chechnya has the right of self determination," he said. "Then you must be prepared for a massive row with the Russians."

Mr Lee, speaking Jan 6 as Thailand held its general election, repeated his long-held skepticism about whether democracy could solve Asia's basic economic and social problems.

He noted that Thaksin Shinawatra, the businessman turned-politican whose opposition party was emerging Sunday with a majority of seats in the Thai Parliament, had been accused by an anti-corruption agency of not fully disclosing his assets when he was a deputy prime minister in the previous Thai government.

Yet it had made "not the slightest difference to the poll figures" before the voting, nor to the final results, Mr Lee said.

He said the Philippine president, Joseph Estrada, who is being tried by the Philippine Senate on charges of corruption and abuse of power, might yet avoid impeachment.

"He can be acquitted if he can get eight senators to vote for him," Mr Lee pointed out.

"I am amazed when American officials tell me that the important factor is the democratic process, and with a free press, there will be good government," he said. "That has not happened. The best periods of Thailand's growth since the war were under two prime ministers, Prem Tinsulanond and Anand Panyarachun, both non-elected, but both honest and competent."

Mr Lee said that sometimes Americans got carried away by their messianic zeal.

"Before you can have a working democracy, you must have an educated population and a fair-sized middle class that will provide a ballast for society," he said. "Does Indonesia or Thailand have that? Have they got people with the means to understand the issues?"

Mr Lee warned that Southeast Asia was falling behind Northeast Asia in economic growth as well as in information technology, which is a critical area of future competitive advantage.

He said that since the regional financial crisis that started in Thailand in mid-1997, there had been a reversal in investor perceptions, with Northeast Asia now being seen as less xenophobic and more willing to reform than Southeast Asia.

"Southeast Asia, unfortunately, is slower in restructuring," Mr Lee said. "Pre-crisis, Southeast Asia was favored because it was not xenophobic; it was going with the tide. Now it is seen as slow to change. Until the Southeast Asian countries come to terms with the new situation, they will have slower growth rates as against Northeast Asia, which now offers more opportunities."

Mr Lee said Singapore and other export-oriented economies in Asia would be hit if the US economy slowed sharply.

"Let's hope that American consumer confidence, critical for a soft landing, does not evaporate too suddenly," he said, "If Americans stop buying, that's trouble."

Mr Lee said Singapore's officially projected growth rate of 5 percent to 7 percent for 2001 would be "out of reach" if there was a sudden drop in US consumer spending because the island-state's growth figure was based on US annual growth of 2.5 to 3 percent.

Mr Lee's upbeat view about the China-Taiwan dialogue was prompted in part by comments from China's deputy prime minister, Qian Qichen, in an interview with The Washington Post that was published Dec 5 in the non-Asian edition of the International Herald Tribune.

Mr Lee said Mr Qian had "moderated and modulated China's position to make it easier for Taiwan to respond and begin to talk."

But he said China would be a difficult issue for the Bush administration because of positions Republicans took in the eight years since they last held the presidency. "They can't do a quick U-turn and abandon their well-stated views," Mr Lee said. "But I am convinced that after 6 to 18 months of testing, they will discover, as the Democrats have, that there are certain basic factors which cannot be wished away, and that therefore it is best to continue the present position, and not precipitate a crisis over Taiwan."

He said that the difficulties might arise in 6 to 18 months as the Republicans "probe and test out the basic limits of China's position" and that "theater missile defense and national missile defense will complicate the issue because they can change the fundamental balance between China and the US."

Beijing fears that an effective US missile shield would not only render ineffective China's relatively small force of long-range missiles armed with nuclear warheads but also be used to protect Taiwan in a crisis.