China makes the headlines nowadays, and the world is fascinated by the rise of China. Beijing has long been one of the five UN security council permanent members and a prominent nuclear power. Twice in the past two years Chinese astronauts riding divine vessels have been sent into space, symbolizing the middle kingdom's ascending global status. After 25 years of rapid economic growth at nearly 10 percent annually, China ranks as the world's fourth largest economy, the third largest trading power, and the largest holder of foreign reserves. It is emerging as a world factory, a huge market for all goods and services, a military power, and a major leader in world affairs.1 Many see Beijing as the only potential rival to the global hegemony of the United States. At the same time, China is also a huge source of pollution and environment degradation, the second largest contributor to the earth's greenhouse effect, a land of increasing disparity and social unrest, and full of uncertainties about its own future.Thus the world asks: Will China be a responsible power? Will it rise peacefully as it daims, or will it go to war with others? How do we engage China? How will it behave in world affairs when it is as powerful as the United States in a few decades time? Or, as one of the sub-themes of this volume puts it in the regional context: How has China managed the sensitive issues of territorial unification and engaged its neighbours? How capable is China in leading the region while implementing a new form of governance at home? Although most of the world sees a prosperous China as a benefit to global commerce and well-being, others see the rising dragon as a menace.In the following pages, I will focus on China's regional diplomacy and examine the foreign policy preferences and performances of China's new leadership in the past three-four years. In the process, I will argue that first, China is joining the world, changing it, and being changed by its contacts with the outside, all at the same time; second, China's interaction with the world is based on an ongoing assessment of its own position in the international system through a complex mixture of different strategies; third, China's engagement with the world, its emerging global status, and its leadership potential all begin with its neighbouring countries, so a closer look at China's regional role is critical in understanding China's overall international behaviour; and finally, although it is difficult to make a certain correlation between China's domestic regional policies (in such places as Xinjiang, Tibet, Inner Mongolia, Hong Kong, and Taiwan) and its foreign policy toward other countries, some linkages can be established between Bering's domestic and foreign policy concerns.NEW CHINESE LEADERSHIP TAKES CENTRAL STAGE IN ASIA PACIFIC DIPLOMACYChina's leadership change began over four years ago, and, as their predecessors did, President Hu Jintao, Premier Wen Jiabao, and other top leaders have maintained a very active agenda in foreign affairs with frequent visits to other countries, especially China's close neighbours. The new leaders are younger, much more energetic, and have so far pushed China's international position to a higher level.In southeast Asia, take President Hu and Premier Wen's 2003 visits to the region as an example. Wen first was in Bali, Indonesia in October for the Association of Southeast Asian Nations' (ASEAN) 10 plus one (China) and ASEAN 10 plus three (China, Japan, and South Korea) meetings. In his 44-hour visit, Wen attended 20 meetings, put forward 29 collaborative proposals, and signed a range of diplomatic documents.2 The result was some unprecedented achievements for China's relations with ASEAN:* Beijing became the first strategic partner of the regional group by signing the treaty of amity and cooperation in southeast Asia with ASEAN, denouncing the use efforce and calling for greater political consultation, economic cooperation, and peaceful coexistence. …