President Bacharuddin Habibie's landmark speech at the weekend may have opened the way for a new era in traditionally fragile Sino-Indonesian relations, diplomats and analysts said yesterday. His use of the old Indonesian word Tionghoa for ethnic Chinese instead of the derogatory Cina in an olive branch to riot victims cuts to the heart of a long-standing dispute. The words officially changed in 1967 shortly after ex-president Suharto's rise to power as part of a package of measures outlawing Chinese language and culture - many of which remain today. 'We have known for a long time that the ethnic Chinese hate to be called Cina,' Chinese Embassy counsellor Duan Zengoi said. 'We have raised the issue many times but both sides have failed to agree.' Emotions ran so high between Beijing and Jakarta that they almost derailed normalisation talks in 1990. The word row meant that normalisation documents were signed only in English, with disagreements surfacing over both the Chinese and Indonesian versions. Chinese officials confirmed the subject remained on the agenda of continuing talks. 'We want peaceful co-existence . . . but the dialogue will depend on the development of the situation here,' Mr Duan said. 'We know that the Government is looking at the May riots and the Chinese Government will be keeping a close eye on these moves.'