A faltering economy brought on by the junta's mismanagement and the economic crises of 1997 and post-September 11 have tightened the links. As the threat of increased Western sanctions looms in a bid to force political reform and compliance with human rights demands, there seems little doubt that the dependence will increase.

The world is divided over Myanmar. China and Russia have supplied weapons and military hardware, and Asian nations have economically embraced it, although not as enthusiastically now as in the mid-1990s.

The Association of Southeast Asian Nations granted it membership in 1998 and Malaysia's Prime Minister, Mahathir Mohamad, is urging more aid and recognition, despite well-documented human rights violations. The United States and the European Union, meanwhile, urge tourists to stay away and companies not to sign contracts until democracy is restored.

Therein lies the dilemma. Since 1996-97, the US and the EU have had sanctions in place banning new investment, but these are having limited effect. American companies which were doing business before then can still operate, but Congress will shortly consider tougher measures which could sever US$400 million (HK$3.1 billion) of this trade. Such measures have failed against Iraq, Iran and Libya and it is debatable whether they will succeed in Myanmar.

Oxford University modern history lecturer Peter Carey believes Myanmar does not have a high enough priority among Western countries for them to consider taking tougher action. He says the situation is akin to the Baltic states and says it is not located strategically enough to be dealt with in the same way as Afghanistan.

'The priorities of Washington are not to pull the chestnuts out of the fire for Suu Kyi because it's not that important,' he said. 'Obviously, if the US did do something in Burma [Myanmar] it would immediately run up against China - and does it want to open a second front of tension with China? It has already got enough on its plate with Taiwan.'

But Dr Carey disagrees with suggestions that China has signed a blank cheque and will step in to help the generals. Other analysts say Beijing does not intend stepping back.

Myanmar-born academic Kyaw Yin Hlaing is unsure if China is involved in politics. The National University of Singapore professor thinks Beijing is only interested in strategic matters, but there is the possibility of behind-the-scenes involvement.

He believes the mainland has increasingly become an impediment to Myanmar's relations with the outside world. The regime's worry that it was becoming too dependent on China also prompted it to open relations with its western neighbours, India and Pakistan. India initiated the moves, fearful of China's threatening military presence through the setting up of four radar facilities along the Bay of Bengal and Andaman Sea, and its rumoured construction of naval bases on the Coco Islands and at Sittwa, close to India's biggest city, Calcutta.

China is also helping to build roads, most notably between its southern city of Kunming and Mandalay in central Myanmar.

To counter its rival's influence, India is building a road that will eventually link South and Southeast Asia and boost already burgeoning trade. India is also helping to exploit Myanmar's oil and gas reserves.

The regime's deputy leader, Maung Aye, opened diplomatic relations in October 2000 by going to New Delhi. Three months later, India's Foreign Minister Jaswant Singh became the first official from his country to visit Myanmar since the junta seized power.

Professor Kyaw has been monitoring his homeland since leaving for study at Cornell University in the US in 1994. He has returned regularly for research and last visited in December.

'The junta doesn't want to have any problem with China but, at the same time, they are not happy with the Chinese Government,' he said.

Distrust started in the late 1990s, when Thailand was given more favourable treatment on gifts of weapons and military equipment. China then pressured Myanmar to pay interest on loans which had originally been granted interest-free. Weapons it bought were judged to be of inferior quality and promised high-level military training was considered to be low-level.

Nonetheless, China remains Myanmar's staunchest ally.

'China wields a lot of influence on the Government and that's why these people, even though they are not happy with the Chinese, try to keep good relations,' Professor Kyaw said.

The doyen of American Myanmar-watchers, Josef Silverstein, sees China as a thorn in the side of the country's future. The long-time professor emeritus at Rutgers University, New Jersey, who joins Princeton University in the autumn, says that because of China's presence, the US is treading warily.

China's economic influence included extensive mining and timber interests, and Mandalay was taken over by mainland business people to the point that it resembled a mainland city.

'China has sold Myanmar more than US$1 billion in weapons since 1989,' Professor Silverstein said. 'There are not many countries in the world prepared to sell the regime arms on favourable terms. It has helped establish weapons factories . . . The Japanese vehicle company Mazda also set up a plant which can turn out trucks the military can use.'

Russia has sold Myanmar 10 MiG fighters and has received a down payment to build a nuclear power station.

Experts agree that Myanmar's key problem is its economy and that this is what Western powers should be taking advantage of when pushing for the restoration of democracy, snatched from Ms Suu Kyi's National League for Democracy by the military after she resoundingly won elections in 1990. Although the official exchange rate of the currency, the kyat, is six to US$1, it was trading last week on the black market at up to 1,000 to the dollar.

United Nations special envoy Razali Ismail is making gradual progress in negotiations between the junta and opposition. Dozens of the 1,500 political prisoners have been released since his mission began 18 months ago, although Ms Suu Kyi remains under house arrest. The former Malaysian diplomat said after his seventh visit last week that he believed there would be more developments soon, although he did not elaborate.

It is because of the state of the economy that Professor Kyaw believes the military opened talks with Ms Suu Kyi.

'The junta knows that the whole country has been going through economic difficulties . . . and they know that this will work against them, so this is one of the reasons why they decided to have dialogue,' he said.

Myanmar officials admit there are difficulties, but say their country's problems are no worse than elsewhere in the region. A consul at the Myanmar Consulate-General in Hong Kong said he did not believe his country was suffering unduly.

'Every country has its own ways and means to boost their economy and develop,' he said. 'Maybe you think our country is worse economically but for us, as Myanmar citizens, we try our best to develop our economy . . . It's not a wealthy economy,' he said. 'Every country after September 11 and the 1997 Asian crisis has been affected by an economic slowdown and downturn. Our country is only a developing one.'

Jeremy Woodrum, director of the Washington-based activist group the Free Burma Coalition, says the sanctions have little to do with the country's economic performance, which he puts down to the regime's poor management.

'If you look at the average education level of people in the regime, it's not surprising they don't know how to run a business,' he said.

But preventing foreign investment is difficult to enforce. The Free Burma Coalition's latest campaign is to force the US oil company Unical out, although it did get the oil giant Texaco to withdraw investment.

Observers such as Dr Carey see China hindering the West's efforts. They say the mainland's shadowy hand is evident and indirectly affecting events.

Peter Kammerer is the Post's Foreign Editor

China wields a lot of influence on the Government and that's why these people, even though they are not happy with the Chinese, try to keep good relations