When Mr Vajpayee triumphantly returned from Lahore, China's friends in India struck. Mr Harkrishan Singh Surjeet persuaded Mrs Sonia Gandhi, Ms Jayalalitha and Dr Subramaniam Swamy to cooperate in toppling the government by one vote. But, contrary to plan, Mrs Sonia Gandhi failed to become PM. A mid-term poll followed. That was when General Musharraf struck, backed by China: the Kargil attack was launched. One week before the Kargil invasion Pakistan's top generals visited Beijing. A taped conversation between the Generals which found its way into the media revealed that Prime Minister Nawaz Sharif was being kept in the dark about the invasion plans. During the invasion Indian intelligence revealed that Chinese army officers in Skardu monitored supplies to the Pakistani army on the front. On July 1, 1999, the Chinese army crossed the line of control in Ladakh to divert the Indian army and help the beleaguered Pakistanis. Indian officials also confirmed that along with PLA, Osama bin Laden helped Pakistan in Kargil. After India's Kargil victory there was an attempt by sections among the politicians and media to denigrate the army's performance. The propaganda did not work. The NDA government won the election.

But then General Musharraf struck again. The ISI chief, General Ziauddin, had just returned from the US. Pakistan's Prime Minster Nawaz Sharif ordered all Jihadi extremists to be disarmed. The army refused to act. Mr Sharif sacked the army chief and appointed General Ziauddin to replace him. Within 48 hours General Musharraf staged a coup and eventually took over Pakistan. After that Mr Vajpayee could talk peace only with the author of Kargil. More importantly, he could talk only with a General fiercely loyal to China.

The Vajpayee-Musharraf peace talks differed significantly from the Vajpayee-Sharif peace talks. In silent mode the dialogue became China-centric. Indeed, during the recent Dhaka SAARC conference Pakistan and Bangladesh actually lobbied for China's entry as a full member. The Iran gas pipeline was expected to bond Iran, Pakistan, India and China through energy. Iran in the nineties helped the PLA set up Islamist terrorist networks in Southeast Asia. It also received Chinese nuclear know-how courtesy Dr A. Q. Khan of Pakistan.

Meanwhile, President Bush's second term brought about an important change. The American security establishment started asserting itself against corporate America which had up to then called the shots. In this new paradigm Iran's nuclear programme became top priority. America became a strident opponent of the Iran gas pipeline. But has anything developed behind the curtain between America and China?

China had proclaimed it was one nation with two systems. It also followed two agendas. On the one hand, it displayed dazzling corporate capitalism. On the other, it supported insurgencies, terrorism, drugs and nuclear proliferation. The Chinese government took care of the economy. The PLA looked after subversion. The PLA is a government within a government. It liberated China and set up its government. It owns 15000 commercial firms. Thanks to profit-driven corporate America, China succeeded in creating a five-to-one trade balance with America by exporting low-tech items manufactured by PLA firms. The profits helped modernize the Chinese army.

Today, America has serious security concerns. China is developing its own concerns. The PLA mindset is revealed by its publication, Unrestricted Warfare, authored by two Chinese colonels. It describes subversive techniques in various fields to subjugate the West. Meanwhile, PLA officers and Chinese Communist Party officials thrive on corruption. China's banking system is a mess. The state owned banks give bad loans to losing state owned enterprises in order to keep them afloat. These government enterprises employ 60 per cent of China's urban population. Closing them down would create a horrendous political crisis. Corrupt officials confiscate land and pay little or no compensation to farmers. The land is given to industry which shares profit and ownership with officials. This has provoked riots. In 2004 China admitted that 74,000 anti-government demonstrations had taken place. One of the more violent ones occurred recently in Shanwei. However, the government cannot attack corruption without at the same time attacking its own infrastructure.

The PLA emerged as a law unto itself. Neither Mr Jiang nor his successor President Hu Jintao served in the PLA. How much authority did they wield over the PLA, wedded as it was to its warlord culture? Some years ago President Jiang ordered the PLA to give up business activity. The PLA ignored him. Some months ago General Zhu Chenghui threatened America with a nuclear attack if it interfered in Taiwan. Subsequently, he was mildly pulled up by the government. Now, President Hu faces an agonizing choice. China is set on the road to a leading global role. To continue on that road Beijing must defuse internal problems. Domestic corruption and external criminality practiced by PLA and party officials endanger China's emerging global role. Can President Hu successfully curb them?

All this suggests why China's decision to join other IAEA members on the Iran issue could be a crucial sign. IAEA inspections in Iran could expose Dr Khan's global nuclear bazaar. That in turn could expose the PLA as its fountainhead. If President Hu really is containing the PLA, it could denote a major policy shift. China would then presumably stop patronizing Osama bin Laden, the Jihadis and Pakistan army elements. Along with America it would change course and opt for a constructive international role.

To return to Musharraf's Pakistan: recent skirmishes between US forces and Pakistan-inspired Taliban on the Pakistan-Afghanistan border are getting uglier. Scathing editorials against President Musharraf have appeared in Washington Post and New York Times. There are, two other developments that should engage President Musharraf's attention.

The Saudi King recently toured the region. He is the largest energy provider to China, supplying 14 per cent of its energy requirement. He spoke against terrorism. He opposed Iran's nuclear ambitions. He offered to meet all the energy needs of India. That would seem to diminish the importance of Iran. In this year's Haj the Grand Mufti Sheikh Abdul Aziz Al-Asheikh gave an impassioned call to Muslims to steer clear of terrorism. So, will the Saudi government continue to fund madrassas that divert money to terrorism?

Against this over-all background, Pakistan Premier Shaukat Aziz pleaded recently with President Bush in Washington to back the Iran pipeline for enhancing Indo-Pakistan cooperation. Clearly, he was missing the large picture! If the emerging Big Power consensus on Iran is any indication, the direction of the Great Game is changing.

The world speculates about hostilities in Iran. But if Pakistan doesn't act fast, given Big Power consensus the next strike could very well be against Osama in Pakistan. If President Musharraf thinks China might prevent this, he could be misleading himself into gross miscalculation.