The past century has seen so many false dawns for Russia in the East, that the latest drum-rolls over the epoch-making meetings in Shanghai and Beijing must be regarded with a dose of healthy scepticism. Yet even if President Boris Yeltsin's only achievement in office were to be to bring about Russia's re-emergence as a power in East Asia, he would deserve re-election. After all, the dreams of so many occupants of the Kremlin have been transformed into encrusted battleships fathoms deep beneath the waters of the Pacific. First there was the Imperial Fleet destroyed by the newly-modernised Japanese navy at Lushun (now Dalian) in 1904, and then a second fleet sent from the other side of the world. More recently, the massive Pacific fleet which the Soviets built up after World War II, has fared little better. Most of it now rusts in Vladivostock harbour and, for the rest, Russia is trying to arrange a suitable burial for the useless but still radioactive hulks of its nuclear submarines. It is strange to remember that in the 1970s, the seemingly relentless build-up of Russia's military and naval strength in East Asia had caused American admirals sleepless nights. With America's defeat in Vietnam, the Soviet navy obtained its first foreign naval base in Asia at Cam Ranh Bay. Add Moscow's strong alliance with India and its client states in Cambodia and Laos, and there was such a threat of further gains that it seemed the Soviets could challenge American dominance. It was these fears which helped propel Richard Nixon into a strategic alliance with China which culminated in Washington's formal recognition of China at another historic meeting in Shanghai in 1979. The Kremlin's failure to transform its military strength in East Asia into a more solid power is all the more extraordinary when one considers the opportunities opened by its role in creating both the KMT and the communists. After the collapse of first the Chinese, and then the Russian empires, Russian revolutionaries exerted the greatest formative influence over both the founders of the KMT and Communist Parties. Chiang Kai-shek's son, Chiang Ching-kuo spent years in the Soviet Union and most of the Communist Party leadership was educated there. Even Jiang Zemin trained in a Moscow car plant in the 1950s. And for decades, it was Russians who controlled Manchuria, building its first railways and the port at Dalian. Stalin relinquished all claims over these rich regions and yet, despite having played a negligible role in Japan's defeat, the Soviet Union emerged triumphant. While America had poured vast resources into China, Mao's victory in 1949 brought China into the Kremlin's orbit which, in turn, paved the way for fresh communist victories in Korea and Southeast Asia. All these gains were thrown away by Stalin's successors. Mao went to Moscow in 1957 and another 30 years were to pass before another Chinese leader, Jiang Zemin, attended a summit there in 1991. Yet the past decade has been one slow retreat as Moscow withdrew from Indo-China and Mongolia, scaled down and withdrew its 1.2 million troops arrayed along its eastern borders and junked its battleships. Such is the decline that now Moscow is even asked to participate in the negotiations over its former satellite, North Korea. It seems laughable to recall that in 1989 when Gorbachev was in Beijing, the final communique committed Moscow to forswearing its 'claims to hegemony in the Asia-Pacific region'. The Soviet Union's last leader was, however, far-sighted enough to recognise that Moscow must take part in the economic growth of East Asia to remain a global power. Mr Yeltsin is now trying to do the same and if he succeeds in making a start, it will have wide repercussions. East Asia now accounts for a quarter of the global economy and Russia, still geographically the biggest country in the world, is all but excluded. Its trade with Japan is so small it barely registers on Japan's statistics, while the value of two-way trade with China amounted to less than 1.9 per cent of China's total in 1995. Moscow is now faced with the daunting task of transforming a centuries-old policy of military expansion into one of peaceful commercial exchange. This psychological switch is not made any easier by an inbred Russian racist contempt for Orientals. Nor by the fact that its likely role will humiliatingly resemble that of a Third World nation - offering raw materials like timber or oil and gas in exchange for the manufactured goods of Japan, South Korea and China. Most of Siberia and the Russian Far East has little else to offer. Its vast lands were conquered by bands of plundering Cossacks and later developed by the communists who carelessly ransacked its natural wealth. An entrepreneurial spirit is bound to be absent from a population which even in Tsarist days was drawn from convicts who arrived in chains and their guards. It is a region run as a penal-military complex and what factories there are exist on parts shipped thousands of kilometres. When, after 1979, Deng Xiaoping set about trying to restore relations and to build economic ties with Moscow, progress was hampered by atavistic fears of Tartars and the nationalistic impulses of the descendants of the original Cossacks. These pressures combined to stop Mr Yeltsin from giving back the four insignificant Kurile Islands captured from Japan in 1945. For a nation which happily sold all of Alaska for a few million dollars, it was not a rational calculation. As a result, Japan is not providing much in the way of loans and investment apart from an unsuccessful effort to explore for oil off Sakhalin Island. Similarly, Mr Yeltsin's rapprochement with Beijing was almost derailed by opposition to the handover of a few marsh islands in the Amur River which forms the border. On the way here, Mr Yeltsin even had to stop off in Khabarovsk, the regional capital, after the provincial governor resigned, saying he could not countenance the handing over of an inch of sacred territory. At the turn of the century, Western travellers going by steamer down the long and navigable Amur River, were inspired to dream of what great future lay in store for this rich and unpopulated land. Some thought that Khabarovsk might become another Shanghai and Blagoveschensk, another port on the river, could rival Manhattan. Yet, seven years after Mr Gorbachev's visit, there are still barges going down the river and the Russians and Chinese have yet to realise a plan to build a bridge at Blagoveschensk. A 1993 agreement to build nuclear power stations in Liaoning province has also made little progress. The reason is always the same - neither side has the capital to invest in such giant projects. To finance the sort of grand projects which would allow Russia to bring its vast natural wealth to the markets of East Asia, Moscow has to become a full member of such organisations as APEC. Jiang Zemin has now said that he is ready to back Russian membership in regional forums, but Mr Yeltsin, if he is re-elected, will still have to obtain Tokyo's support. Should he lose and the Kremlin is occupied by ultra-nationalists or neo-communists, such men are even less likely to return the Kiril Islands and Japan will say no. So the Chinese, who once condemned Mr Yeltsin as a traitor to the cause of communism, now back him. Both he and Jiang Zemin promised to support each other against American criticism of their respective handling of NATO, Chechnya, Taiwan and Tibet. These empty and cost-free gestures involve no sacrifices on either side but have raised fears that a new Beijing-Moscow axis is in the making. Washington has responded calmly, and with good reason. Since so many Russians, especially in military circles, would rather hang on to a few worthless islands than forge vital relationships with two of the world's great economic powers, they are hardly likely to believe it is in Russia's interests to boost China's military strength. Besides, the Americans would also prefer Mr Yeltsin stayed in power since the alternatives could be so much worse. Yet the pact signed in Shanghai is of great symbolic importance. It formally draws the curtain on an era in Asia when Russia's massive potential military threat dominated strategic thinking.