SPECIAL REPORT-Obama plays China card, but who holds the ace?

TENSIONS COOLING WITH TAIWAN

Taiwan is still the one issue that could trigger war between China, which claims sovereignty over the self-ruled island, and the United States, which is committed by U.S. law to provide weapons for Taiwan's defense.

But Obama's tenure has coincided with a cooling of tensions between Beijing and Taipei thanks to the 2008 election of Taiwan President Ma Ying-jeou, who has sought better ties with China. But potential friction over U.S. arms sales remains.

The Obama administration has angered some for appearing to play down human rights in the interest of gaining Chinese cooperation in combating the financial crisis.

Obama broke with presidential tradition and did not meet the Dalai Lama when the exiled Tibetan spiritual leader visited Washington last month. But U.S. officials reject the idea that Obama snubbed the Dalai Lama and tell critics to judge the policies by their results.

Other foreign policy disputes stem from China's scorching economic growth. China's need for energy and raw materials to fuel its growth has led it to deepen ties with countries which have troubled relations with the United States or face international condemnation for their human rights records or pursuit of banned weapons.

China's oil investments in Sudan drew calls for a boycott of the 2008 Beijing Olympics by critics who said China abetted the perpetrators of atrocities in Darfur. China's energy trade with Iran is seen as helping Tehran withstand Western economic sanctions over its nuclear ambitions.

Drew Thompson, director of China Studies at the Nixon Center in Washington, said the United States has started to take into account how Chinese "resource needs and self-perceived insecurities" influence its foreign policy.

"The more we address those insecurities and resolve them as much as possible, the more we will get from China in terms of shaping the behavior of other nations, such as Iran, Sudan and Zimbabwe," he said.