It is April. The handover is still more than two months away. Yet the Royal Navy's White Ensign has already been lowered over HMS Tamar and the first People's Liberation Army servicemen have settled into their new quarters at Stonecutters Island. The Royal Navy has not quite shut up shop yet: a frigate, HMS Chatham, and the landing ship Sir Percivale will be in the harbour on June 30 alongside the royal yacht Britannia, demonstrating sovereignty to the last. But with the closure of its last permanent base in Asia, it would be easy to imagine the British fleet quietly sailing out of the region for good once the ceremony is over. However, 'Flying Fish 97', the 13-day air and naval exercise which ends off the Malaysian island of Tioman in the South China Sea today tells a different story. The war game, involving 12,000 soldiers, sailors and airmen, 160 fighter jets and 39 ships from Britain, Malaysia, Singapore, Australia and New Zealand is the most lavish joint exercise by the Five Power Defence Arrangement (FPDA) since its establishment in 1971. Britain is supplying much of the muscle, with the aircraft carrier HMS Illustrious, a nuclear-powered submarine, a guided-missile destroyer, an assault ship, frigates and other warships at the centre of the action. All are part of Task Group 327.01, better known as Ocean Wave 97, the largest Royal Navy force since the Gulf War and its most powerful since the Falklands War of 1982. In its seven-month deployment, the group will also take part in an amphibious exercise with the Royal Brunei Armed Forces, join 24 other exercises round the region, and visit 34 countries. In comparison, the despatch of HMS Chatham and Sir Percivale to Hong Kong seems almost like an afterthought. It is hardly that. The whole deployment is timed to coincide with the British departure from the territory. As specialist writers Richard Scott and Kathleen Bunten of Jane's Navy International put it: 'The UK Government has played down the significance of the task group's presence in the Far East in late June when Hong Kong reverts to Chinese rule . . . However, it is tacitly acknowledged that the Ocean Wave group would be able to respond to any emergent contingency if called upon.' In other words, this is not the time for gunboat diplomacy. Nor is any military planner expecting to intervene. But it is the job of navies to plan for contingencies in regions their governments regard as vital to their national interests. The Royal Navy's presence in such force in East Asia at such a critical time sends a powerful message that Britain intends to continue to play a security role in East Asia. 'The deployment demonstrates our continuing commitment, through the FDPA, to contribute to regional security,' said Group Captain Jonathan Collier, Defence adviser at the British High Commission in Singapore. Although the loss of Hong Kong could symbolise Britain's eclipse as an imperial power, that security role is still one the Royal Navy feels it is equipped to fulfil. As naval commanders happily point out, the service is one of only two navies capable of mounting a deployment on such a scale east of the Suez. The United States can do it. Britain can do it, though clearly not on a scale to compete with the Americans. Neither the Russians nor the French have the capability. University of Hong Kong regional security specialist Elfed Roberts adds that Britain is still in the top league of active navies, despite recent cuts. Japan's navy can be counted with Britain and the US, he says. But despite its ideal regional position it is bound by its constitution to a purely defensive role in its home waters - and it is not trusted by other countries to provide Asian-wide defence. However, without a Hong Kong base, Britain has to find new ways to express that power. In part, changing naval doctrine and a smaller navy make that less of a problem than it may seem. It has been many years since the navy has had more than a small coastal anti-smuggling operation in Hong Kong. Increasingly, analysts say, the navy is moving to an 'expeditionary doctrine' rather than stationing large numbers of ships permanently in sensitive regions. Task groups are sent out as they are needed. Ocean Wave is a model for the new mode of operation. But expeditionary forces still need access to port facilities. Joint exercises, upgraded co-operation agreements with FPDA countries and being able to work under a common command and with compatible communications with other regional allies are part of that. As Malaysian Defence Minister Syed Hamid explained after a meeting with his FPDA counterparts this month, foreign naval bases had become a sensitive issue in many countries. 'You have to find new approaches, new ways of having access,' he said. 'At the end of the day you cannot sustain bases so you have to be able to access places more quickly. As an FPDA member country, the British can use our military base and facilities if the need arises. 'I am also sure that the other member countries will not have any qualms in letting the British use their facilities.' A few days earlier, to underscore the point, Britain had signed a Memorandum of Understanding with Singapore aboard the Illustrious, facilitating greater exchange of naval training and expertise. That Britain wants to continue projecting its power so far from home, despite massive downsizing of the fleet and a cut in naval manpower from 63,000 in 1990 to 46,700 today, is still as much about international politics as it is about trade. A Malaysian-inspired change in the FPDA's official role from 'coming to the defence' of Malaysia and Singapore to 'assisting' in their defence, attests to the fact that both countries have made huge strides economically and in defence capabilities since the 1970s. But both countries have endorsed an FPDA statement that both British and American forces are needed in the region, with the implicit recognition that instability in the Korean peninsula, tensions in the Taiwan Strait, and Chinese ambitions in the South China Sea are a cause for concern. As Mr Hamid explained: 'We looked at our perceptions of the security environment or framework of the area. We see the need of the continued US presence . . . 'We [also] appreciate the British undertaking that they will deploy on a more frequent basis their naval forces.' At the same time, however, there is a feeling in Asia that increased European interest in defence co-operation will both encourage the US to continue to guarantee security (by silencing US critics who claim neither Europe nor Asia are contributing enough to their own defence), and make American projection of power more 'manageable'. Nobody expects European navies to come into conflict with their Washington allies. On the contrary, Britain sees backing the US in East Asia as part of the global role which justifies its seat on the United Nations Security Council. But as Gerald Segal, of the London-based International Institute of Strategic Studies, put it recently in Singapore's Straits Times newspaper: 'While it is true that the US is the only superpower, it is also true that Europeans and Asians do have reasons to talk about the best way to encourage Washington to act in a more amenable and multilateral fashion on security and other issues.' European and particularly British and French co-operation through regional alliances, and the security aspects of the Asia-Europe Meeting (ASEM) and the Asian Regional Forum could be part of the effort to stop Washington throwing its weight about. Underlying British interests in the region, however, is still the old imperial imperative of keeping the sea-lanes and the markets open to trade - especially the arms trade. Speaking in Hong Kong last December before his retirement as Chief of Defence Staff, Sir Peter Inge said: 'We have recognised that as a major trading country we have clear world-wide interests and those interests will remain important.' And defence analysts agree that with arms sales an important part of Britain's relationship with several countries in the region, defence co-operation works very much as a kind of nationally-guaranteed after-sales service. To quote Mr Segal again, sales of weapons systems nowadays include training packages and 'in many cases also include implicit and sometimes explicit transfers of intelligence information'. With East Asia's share of world arms imports rising from 11.7 per cent in 1988 to 24.2 per cent of a much smaller market in 1995, the kind of intelligence and in-service testing Britain can provide through joint exercises with its richest customers, gives added value to its products as the world's second largest arms supplier.