THERE is a 50-50 chance of China falling apart after Deng Xiaoping's death, followed by a potential conflict with Taiwan and a crackdown in Hong Kong, according to a US Defence Department report. Under the disintegration scenario, a tough, nationalistic leader could assume the reins, the country could break up into regions or even collapse, the Pentagon's study warns. The study, China in the Near Term, was prepared by a group of experts after a request by the department's policy section. The study, which was only declassified last week, is designed to analyse changes in China which might destabilise the region and lead to possible conflicts with the US. Stating that 'China is the major uncertainty in Asia's future', the document also predicts that the kind of outcome the West wants to see - liberal and democratic reform - is the least likely. The report's existence, and the tough political analysis it contains, is evidence of a greater realisation in the US military of China's growing predominance in the region's affairs. One burning issue Washington will have to face, the report says, is to 'resolve US ambiguities on Taiwanese independence and arms sales'. Other recommendations the experts make are to retain the US-Japan military treaty, talk to China on economic and security matters without meddling in its affairs, and keep monitoring Beijing's actions, notably its 'goals for world-class military status'. The report adds: 'Prospects are that the US will deal with several different Chinas during the near term, and all may present unforeseen and largely unanticipated security threats.' But the document's most explosive conclusion states: 'The group believed there was a 50-50 chance that China would disintegrate under a post-Deng diffused leadership and internal conflict. Power in general will gravitate away from the centre. 'China is up for grabs once Deng passes away. There is no apparent internal balance of political forces and Deng's death will create a political vacuum for both conservatives and reformers to move in.' Under this break-up, the Pentagon's experts draw up several different scenarios, including the emergence of a hardline dictator, total collapse, a split into regions, or a democratic China. If the nationalistic strongman emerges, it would be with the People's Liberation Army's reluctance. The report argues that such a leader would create a militarily aggressive China, and would use force if Taiwan declared independence, possibility dragging America into the war. He would also be prepared to attack Vietnam over the Spratlys conflict, and impose 'hardline repression' on Hong Kong to prevent dissent there. If there were total collapse, because of divisions at the centre, there would be riots among peasants and migrant workers, economic chaos and a flight of foreign investment. This would lead to security worries for Japan and the US, but it would also mean China did nothing to prevent Taiwanese independence, and might even call into question resuming sovereignty over Hong Kong, the document predicts. Regionalism might come about if the centre was too weak to stop the growing independence of regional officials, and wanted to avoid a civil war. Again, this would lead to a weakening of China's military presence overseas, and would mean Hong Kong ruling itself without Bei-jing's interference, the study says. Triad gangs could also become a dominant force in regional leadership. Whatever happens in the medium term, the report argues that no one leader is likely to emerge for one or two years after Deng's demise, with the current collective leadership muddling along under the watchful eye of the military. What it terms the 'linear future' - the continuation of the current economic and communist-run political system - is only 30 per cent likely, it predicts. Under this scenario, China would continue its military modernisation and create a blue-water navy, becoming more aggressive. In Hong Kong, crackdowns on democratic forces would be expected. Throughout the report, Hong Kong emerges as a broad indicator to the outside world of Beijing's future conduct. The study says: 'The reversion of Hong Kong in 1997 and how that is managed politically will send a signal about China's long-term intentions.' While noting that China's leadership is paranoid about the break-up of the Soviet Union, it adds that there are few likely parallels between that event and China's future.