Without doubt, the so-called hawkish elements in the United States would seize the opportunity to advance their view of China as a strategic competitor to the US interests in the Asia-Pacific.

China watchers throughout the world will closely watch how Beijing will play its hand in the coming weeks

Beijing has been angered a recent chain of events over Taiwan, which appeared to have stretched its patience. Those events include the landmark visit to the US by Taiwan Defence Minister Tang Yiau-ming and his meetings with top US officials; reports of US government intention to issue visas to more Taiwan military officials and former Taiwan President Lee Teng-hui, and a leaked Pentagon report which said Washington could use nuclear weapons at mainland should a war break out across the Taiwan Strait.

Despite its palpable anger through increasing media attacks at Washington, Beijing has largely been posturing so far. Analysts have speculated that Vice-President Hu Jintao's forthcoming visit to US, scheduled in late April or early May, could be affected if no signs of improvements on Sino-US relations are made in the future. But government officials in Beijing have given no indication whatsoever that this could be a possibility.

However, there are also signs that anti-US sentiment is gaining strength within the Beijing leadership over the so-called blatant support for Taiwan by the US government. Sources said some senior mainland officials have expressed that they had lost faith in the US President George W Bush and blamed his administration for encouraging Taiwan's pro-independent forces and planning to sell more arms to the island.

Beijing could be forced to react strongly if backed into a corner. That is partly because mainland is facing a very important election year this year. In October, the Chinese Communist Party will elect a new leadership at its 16th congress. The jockeying and jostling for positions have shifted into high gear and nobody in the game likes to be seen as weak in dealing with the United States.

Although Beijing's options are limited, it is still capable of embarrassing Washington. One option is to stall the bilateral talks on weapon controls - an area where the US claimed there had been significant progress.

But the clearest barometer indicator on Sino-US relations would be whether Mr Hu would go ahead with its US trip or not. The trip is seen as very low priority for Mr Hu who is widely expected to play a vital in the new leadership line-up. If the trip is either delayed or cancelled, it will mean that Sino-US relations are in serious trouble. Otherwise, the current row is just one of many in the bumpy relations between the two giant countries.

On the domestic front, China watchers will cast a keen eye on how the authorities are going to end the demonstrations in the northeastern Liaoning and Heilongjiang provinces.

So far, the authorities in those two provinces have been very low-key and moderate in handling the daily protests which has been going on for weeks.

The authorities would find it very hard to crack down on those demonstrations, where workers are merely calling for unpaid wages and pension funds.

In a year that social stability is paramount, the government has deliberately allowed workers some room to vent their anger.

It is most likely that the local authorities, with the help of the central government, will soon hand out some emergency payouts to quell to the disturbances.

But more demonstrations will definitely occur again in the future as the bloated state sector will have to shed its excess to compete with the foreign firms and the private sector following mainland's entry into the World Trade Organisation.

So the trade off is that Beijing will probably slow down its state sector policy and other reforms for this year to ensure a favourable environment for the important power transition at the party in October and at the government level in 2003.

Wang Xiangwei is the Post's China editor.