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Business ties to take centre stage at Asean meet

Jyoti Malhotra  |  New Delhi 

External Affairs Minister S M Krishna will represent India at the 10th anniversary of the India-Asean meeting as well as the 19th Asean Regional Forum (ARF) in the coming week in Phnom Penh, Cambodia. But it is the deliberate effort of the major powers, China and the US, to pull back from their rising rhetoric of mutual confrontation in the region that is at the centre of interest in Southeast Asia these days.

US secretary of state Hillary Clinton and Chinese foreign minister Yang Jiechi will rub shoulders in Phnom Penh on the occasion of the ARF meeting — along with Krishna and others — and Indian analysts say that both will use the forum to build bridges so as not to polarise the 10 Asean nations even further.

The US — which first reached out to Southeast Asia in the 1950s to prevent them from coming under Chinese influence, thereby reinventing partnerships with Asean nations such as Thailand and the Philippines — wants to up its trade balance with the region (which currently stands at $192 billion). The Chinese, leaning towards Myanmar, Malaysia and Laos — Singapore has close ties with China and the US as well as a close partnership with India — has overtaken the Americans in trading with its neighbour, with trade in the region of $293 billion annually.

As for India, with trade figures touching around $70 billion annually since the India-Asean free trade area came into being in January 2010, the effort remains to keep the region stable and improve relationships so that Southeast Asia reminds itself that it was once also called Indochina.

If India has been recently seen to be close to the Americans — such as by participating in military exercises with the US last month — to the extent that China had begun to perceive it as an US ally, officials feel the time has come to come to reassure Beijing that healthy economic competition is not the same thing as a strategy for containment.

India wants to host the 20th anniversary of its relationship with the Asean this December and is keenly aware of the fact that this is one region that has successfully faced up to the recession in the last four years.

Talk of participating in a pan-Asian free trade area, which includes both China and Australia, has also been heard, although the failure to sign off on a regional cooperation agreement between India and China means that this regional trading pact will have limited scope.

As for Asean, which hopes it can develop into a single economic activity by 2015, the anxiety over the perceived confrontation between China and the US, such as over the South China sea dispute, is only rising.

More than ever in Southeast Asia, trade is replacing weaponry as the choice instrument of influence. At a speech at the Asia Society in Hong Kong last week, Chinese vice foreign minister Cui Tiankai pointed out that “China is the biggest trading partner of Asean, Japan, Korea, India and Australia and the biggest source of investment”.

The Chinese, keenly aware that none other than Barack Obama has reiterated that the US is an Asia-Pacific power, rubbed it home. “As an Asian country located on the Pacific coast, (this) is our home and our roots,” Ciu said.

For the moment at least, the Americans are holding their peace. Kurt Campbell, the US point person for East Asia, stated recently that “too often in the Asean there is a concern... of dangerous strategic competition between the US and China. It is our strong determination to make clear we want to work with China.”

But Hillary Clinton will attend the biggest meeting in decades of US businessmen in Asean in Cambodia this week, giving notice to the Chinese that it is not an Asian “pivot” for nothing.

Certainly, Indian analysts, like Srikant Kondapalli, a China scholar at the Jawaharlal Nehru University, point out that India doesn’t want to be caught in the middle of the US-China rivalry in Southeast Asia.

“Defence minister A K Antony’s refusal to ally with his US counterpart, Leon Panetta, last month on China’s dispute with the Philippines and his insistence that this was a bilateral matter between the US and China has gone down well with Beijing,” Kondapalli said.

He pointed out that Beijing must realise that India, with whom trade figures are also touching $70 billion, is not following the US blindly in this part of the world.

“India’s strategy in the Asean region is expand economically, but not antagonise any other power as it does so. Actually that is very much a traditional Chinese strategy,” Kondapalli said.

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First Published: Mon, July 09 2012. 01:04 IST