By Andrew Quinn
DILI (Reuters) - U.S. Secretary of State Hillary Clinton made a short visit to East Timor on Thursday, throwing her considerable diplomatic weight behind a fledgling government trying to bring Asia's newest country closer to its booming Southeast Asian neighbors.
Clinton met President Taur Matan Ruak and Prime Minister Xanana Gusmao during a brief visit to the capital, Dili, after a day of talks in China. She was due to leave for Brunei later on Thursday.
U.S. officials said the visit -- the first by a U.S. secretary of state since East Timor won independence from Indonesia in 2002 -- was an effort to help stability and growth.
"Strong democracies, we know from long practice, make more stable neighbors and capable partners," Clinton told a news conference with Gusmao.
Clinton did not bring much new financial assistance. She was set to announce just $6.5 million in funding for scholarships to help East Timorese students study in the United States.
U.S. officials hope her visit will send a signal to East Timor's neighbors, some of which have resisted suggestions it join the Association of Southeast Asian Nations (ASEAN) because it lags too far behind in political and economic development.
"Timor is still plagued with substantial violence ... they have a long way to go," a senior U.S. official told reporters.
U.S. officials say East Timor is still weak after more than 400 years of Portuguese colonization and a 24-year fight against Indonesian occupation, and see closer ties with ASEAN as a way to bring stability.
Gusmao won parliamentary elections in April but fell short of a majority, forcing the formation of a coalition government.
Still lacking much basic infrastructure, East Timor began receiving oil and gas revenues from fields it shares with Australia in 2005 and boasts a special oil fund with assets of more than $10 billion.
Clinton toured a USAID-funded coffee finishing plant. Coffee is East Timor's second-largest export, with U.S. giant Starbucks a major customer.
CHINA LOOMS LARGE
She also took stock of growing Chinese aid and investment, part of Beijing's push to accelerate influence in the region.
"We are not here against any other country, we are here on behalf of our partnerships and relationships with countries in the region," Clinton said, when asked if U.S. engagement in the region was aimed at China.
" ...certainly I am not going to shy away from standing up for our strategic interests and expressing clearly where we differ," she said.
China has built a number of major government buildings in East Timor. It has also signaled it is willing to partner with the United States in development projects to help East Timorese, 40 percent of whom live on less than a dollar a day.
U.S. officials said Washington hoped to step up cooperative development work with China, citing East Timor as one region in Asia where the two Pacific powers' interests could converge.
"The Chinese don't view the stakes as particularly high," the official said, although he noted that, even in cooperative ventures, China shields much of the details of development work.
Clinton said the United States would work with East Timor on concerns such as human trafficking and the victims of conflict.
The United States supported autocratic Indonesian ruler Suharto when Indonesia invaded East Timor, occupying half an island at the eastern end of the Indonesian archipelago in 1975. East Timor finally won independence after a U.N.-sponsored referendum.
Gusmao was conciliatory, noting 70 percent of East Timor's trade was with Indonesia, Southeast Asia's largest economy.
(Additional reporting by Tito Belo in Dili; Editing by Neil Chatterjee and Paul Tait)