BACKDOOR DRUG TALKS LIKELY

Thailand and China may take matters into their own hands and hold talks with
the United Wa State Army about drug smuggling from Burma and the Golden
Triangle.

Beijing officials who accompanied Vice-President Hu Jintao to Rangoon last
week were pessimistic about the chances of dealing with the problem through
diplomatic channels.

Chinese and Thai experts discussed a number of options including the
possibility that the Wa might discuss a deal which did not include Rangoon,
diplomats said.

Foreign sources were unclear whether the Wa has actually approached China
but recent reports suggested Wa leaders might hold policy talks with foreign
diplomats in Thailand.

Southern China has been hit almost as hard as Thailand by the massive drug
movements. Organised crime, drug addiction and Aids have risen from
virtually nothing in less than a decade.

The huge rise in crime and social problems took China by surprise, prompting
Beijing to execute hundreds of drug dealers and other criminals.

Diplomatic sources said Mr Hu was shocked last week by the lack of urgency
and co-operation from Rangoon in dealing with the drug problem.

When he offered "significant" Chinese aid to fund crop substitution
programmes in northern Burma the military junta reportedly accepted the aid
but could not guarantee a reduction in opium or heroin output.

"China would like to keep this quiet and deal with Rangoon, but the
(military) junta won't co-operate," said one foreign source.