(FORTUNE Magazine) – Remember Ping-Pong diplomacy? Thirty years ago a series of international table-tennis matches helped smooth the way for Richard Nixon to open diplomatic relations with China. Now, in the wake of the spy plane crash off Hainan Island, continued tension over Taiwan, and the forthcoming fights over missile defense, it may be time for some hoops diplomacy.

The National Basketball Association is only too happy to oblige in the name of international harmony and big bucks. Professional basketball's popularity is surging in China, the world's most populous country. The NBA, which has long targeted Asia as a potentially huge growth market, is now reaping the benefits of its efforts to get its games televised. This year Chinese basketball fans are able to catch up to five games a week on national television. Ratings for the games aren't available, says Michael Denzel, vice president and managing director for the NBA in Asia, but there's still plenty of data to show how popular the sport has become. Ninety percent of China's young males, particularly those in major cities, report "awareness of" and "interest in" the NBA. Not even soccer, traditionally thought of as the country's favorite sport, has such high numbers.

Basketball's popularity is helped by the 7-foot Wang Zhizhi, who became the first Chinese player in the NBA when he joined the Dallas Mavericks last month. (Given China's population of 1.3 billion, the team may have suddenly become the most popular professional sports franchise on earth.) Every game that the Mavericks play in the post-season is a boon for the league and its partners in promotion--most prominently Nike, Coca-Cola, and McDonald's, which together spend millions in basketball-related advertising and marketing in China each year. And get ready for the first wave of hoops diplomacy: This summer the NBA will bring Wang and another Mav or two over to China to conduct some clinics. The Mavs' strength and conditioning coach will also work with the Chinese national team.

China has its own professional basketball league, and soon its current biggest star--7-foot 5-inch Yao Ming, center for the Shanghai Sharks--may also decide to leave for the NBA if he gets permission from China's sports authorities. Chinese basketball officials love the idea of their twin towers' getting experience against the world's best players. After all, the prospect of a 2008 Olympics in Beijing, with Yao and Wang leading the national team against the NBA All-Stars, would be great for the sport's reputation in China.

This is where the story gets a little tricky from the NBA's point of view. A Chinese gold medal could make basketball the country's most popular sport for generations to come. But it would be a national catastrophe as far as American hoops fans are concerned. "It'd be great if [China] at least could win a medal if they get the games here," Denzel says. Does that mean that he wants the team to go all the way? "Hey, I didn't say it would be nice if they won gold," he adds.

Now, that's hoops diplomacy.