WORLD NEWS TOMORROW -U.S. Secretary of State Hillary Clinton’s visit to Southeast Asia this week was expected to put a spotlight on territorial disputes in the South China Sea, as well as the growing significance of a relatively new actor in the region’s power plays: tiny, landlocked Laos.

Mrs. Clinton was scheduled to spend Tuesday in Hanoi after stops in Tokyo and Mongolia, with plans to discuss the growing commercial and political ties between the U.S. and Vietnam. Washington and Hanoi have grown especially close over the past few years as Vietnam has grown more wary of efforts by China, its northern neighbor, to project influence across Southeast Asia, especially in the resource-rich South China Sea, parts of which are jointly claimed by China, Vietnam, the Philippines and other countries.

Mrs. Clinton is scheduled to arrive Wednesday in the Laotian capital of Vientiane, the first such trip by a U.S. Secretary of State in 57 years. Laos’s political profile has risen as it has moved deeper into China’s orbit. Her trip to Laos will be followed by a visit to Cambodia, where she will attend a regional forum of the Association of Southeast Asian Nations and meet with U.S. businesses.

The trip to Laos is drawing especially close attention, not least because political analysts have long seen the country as too small, and politically insignificant, to generate much interest from Washington. The entire country has fewer residents than New York City, with a population of fewer than seven million. It also has the smallest economy in Southeast Asia, with annual economic output of about $7 billion, versus about $125 billion for Vietnam.

But Laos has significant untapped mineral resources and a growing consumer market that are of interest to both American and Chinese companies.

It also represents another voice in the increasingly tense debates over territorial rights in the South China Sea, as well as other regional issues linked to China’s expanding influence. Most immediately, regional leaders are expected to debate a contentious code of conduct to govern behavior for China and other rival claimants in the South China Sea later this week at the Asean summit in Cambodia, despite China’s longstanding position that it prefers to discuss sea claims on a bilateral, rather than multilateral, basis.

Analysts have warned it will be difficult to obtain a consensus on the matter, in large part because the Southeast Asian nations themselves haven’t been able to agree on the best course of action. Most maritime states—notably Vietnam and the Philippines—want to take a hard line against China to limit its activities in the South China Sea, but many mainland Asean nations, including Thailand and Cambodia, have resisted steps that would embarrass Chinese leaders. Those divisions are enhancing the clout of countries like Myanmar and Laos, which share borders with China and enjoy significant Chinese investment—but are increasingly eyed by Washington as potential allies in limiting China’s reach.

“I think the U.S. is worried it doesn’t have enough clout within Asean and East Asia as China becomes so significantly important, and so I think they feel a vote is a vote—whether you’re the size of Indonesia or the size of Laos, you’re still a vote in the Asean environment,” said Christopher Bruton, an analyst at Dataconsult Ltd. in Bangkok.

State Department officials said Mrs. Clinton would meet with Prime Minister Thongsing Thammavong and other senior government officials to discuss regional issues, including efforts to more closely integrate Southeast Asia’s economy and promote a U.S.-led project known as the Lower Mekong Initiative. Mrs. Clinton launched the initiative in 2009 to boost development in areas such as education, infrastructure and the environment in countries through which the Mekong flows, though analysts say it also has the benefit of boosting American influence there.

The environmental health of the Mekong is itself a key issue. Laos has sought to develop a controversial $3.5 billion dam project as part of a wider strategy to become a hydroelectric power hub for Southeast Asia. Countries downriver—notably Cambodia and Vietnam—have said the Thailand-financed project could block crucial river flows, with potentially devastating effects on fish and other food supplies.

Scientists from the U.S. Geological Survey have also raised concerns about the environmental impact of dams on the Mekong River, adding to speculation that U.S. officials would seek to broker some kind of compromise lest the issue further divide the region at a time when Washington wants to see more cooperation in Southeast Asia, in part so it can become more unified in dealing with China.

Laos officials said recently they were putting the project on hold while more studies are done, though it has indicated it hopes to proceed eventually.

Laos isn’t a natural ally of the U.S. It is one of the last remaining Communist outposts in the world, and bilateral relations have been strained for years. U.S. bombers decimated much of the countryside during the Vietnam War, leaving many areas honeycombed with unexploded ordnance. Trade between the U.S. and Laos was just $71 million in 2010.

Vietnam and China, by contrast, have exercised far more influence over Laos in recent decades, with China increasingly beating out Vietnamese investors to launch new mining and plantation projects there, diplomats say. The projects also include a $7 billion Chinese high-speed rail link through the country which has been under development, though people familiar with the matter say the project has bogged down over the past year amid discussions over land rights and other issues.

Laos has introduced a number of market reforms over the years, though, indicating a growing willingness to diversify its economy beyond over-reliance on China and Vietnam.

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