VICE-PREMIER Zhu Rongji's apparent attempt to calm fears about possible military action against Taiwan is a further sign that important voices within the political leadership in Beijing now recognise that even the threat of hostilities may jeopardise China's economic development. In dismissing the idea of an invasion as a 'question you don't even have to ask', Mr Zhu seems to be firmly aligning himself with President Jiang Zemin, who has privately warned any such action would put Hong Kong's prosperity at risk and frighten foreign investors. As China's economic czar, it is scarcely surprising Mr Zhu should do so. Yet they still face intense opposition from some hawkish People's Liberation Army generals, who believe their forces would triumph in any cross-strait battle, and are continuing to make preparations in the so-called Nanjing War Zone. This enthusiasm for military action could be shared by Politburo Standing Committee members who are opposed to Mr Jiang. But Mr Zhu's remarks, coupled with the recent leaking of President Jiang's cautionary comments, hopefully signal the start of a counter-offensiveby economic realists within the leadership, aimed at halting the drift towards war before it becomes irreversible. Which faction prevails will depend on developments over the next few months. As Mr Zhu makes clear, there is intense personal hostility towards Taiwanese President Lee Teng-hui. So much so that if Mr Lee tries to use his expected re-election next month as a platform for further overseas visits, this may be enough to tip the balance in the generals' favour. But Mr Lee already had indicated he did not plan to visit the United States in the near future. US intentions are also a critical factor. So far the signs are Washington, while it may talk tough, did not show unequivocally that it would intervene if it came to an invasion. Officials will only say an attack would be taken 'extremely seriously'. But that could change, if China becomes an issue during the coming US Presidential election campaign. Beijing's own self-interest may be a far more potent consideration. If foreign investors begin to hesitate over signing joint venture contracts, or war jitters take their toll on the Hong Kong and Shanghai stock exchanges, then Mr Zhu and Mr Jiang may find willing listeners for their warnings about the potential costs of hostilities. Sadly, self-inflicted economic damage may ultimately prove their strongest card in pressing the case against military action.