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East Asia Integration – China’s Reservations On India Playing A Leading Role

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By D. S. Rajan

“China and India, two great nations that have gone through so many trials and tribulations, will, as always, remain vibrant, live up to the important mission bestowed by history, and work together for new glories of the Oriental civilization “ – Chinese Premier Wen Jiabao, Speech at the Indian Council of World Affairs, New Delhi, 15 December 2010.

It may be a folly to treat Wen’s words as empty, intended only to please the Indian audience; instead they deserve to be taken seriously as signifying the outcome of the fundamental transformation that has taken place in the Chinese thinking on ties with India ever since the People’s Republic of China (PRC) embarked on a ‘reforms and opening up’ policy in 1978. Importantly, Beijing now concurs with New Delhi that “there is enough space in the world for the development of both India and China and indeed, enough areas for the two to cooperate and that relations among them now go beyond their bilateral scope and have acquired global and strategic significance[1]”. Identifying East Asia as one such area, the PRC has joined India in supporting ‘multilateral cooperation mechanisms in Asia’ and viewing positively each other’s participation in the cross regional, regional and sub-regional cooperation processes in Asia. Specifically, China has agreed to broaden cooperation with India within the framework of the East Asia Summit (EAS), finding that they have a common view on EAS ‘ making a meaningful contribution to building an open, inclusive and transparent architecture in the Asia-Pacific region’[2]. Two main reasons have contributed to China’s current perception of relations with India – its realisation of the importance of a ‘peaceful periphery’ where India is located, for achieving the stated goal to fully modernise the country by 2050 and the necessity being felt by it to engage a ‘rising’ India in the interest of mutual benefits, as part of an approach to look at bilateral ties beyond contentious issues like the border.

What has been said above provides a definite context to a discussion on whether India is a factor in China’s approach towards East Asia region. It can be seen that theoretically, China has chosen a path of welcoming India without hesitation into the East Asian integration process. But what is happening in practice? Any conclusion in this regard may involve study of two questions – how China views India’s “Look East” policy being implemented since early nineties and whether there is any correlation between the current geo-political conditions in East Asia as perceived by China and the PRC’s emerging views on India’s participation in the regional integration process.

Prior to addressing the first question above, it may be worthwhile to look into the extent to which India’s “Look East” policy has progressed so far. Defining that policy, the Indian Prime Minister Dr Manmohan Singh said (Kuala Lumpur, 12 December 2005) that “India’s Look East policy is not merely an external economic policy, it also marks a strategic shift in India’s vision of the world and its place in the evolving global economy. Most of all, it is about reaching out to our civilizational neighbours in Southeast Asia and East Asia”.

Started as a much needed approach to respond to the initiation of economic reforms and liberalisation within the country and significant changes occurring in the world’s politics and economy, India’s Look East policy in the first phase of its implementation, targeted at establishment of linkages with the ASEAN, considering its economic, political and strategic importance in the Asia-Pacific region and potential to become a major trade and investment partner. In the second stage, the scope of the policy was extended to include the Far Eastern and Pacific regions, facilitating India’s enhanced links with a host of countries – China, Japan, Republic of Korea, Australia, New Zealand, Fiji, Papua New Guinea and Pacific island states.

The Look East policy is paying good dividends to India and its impact is being felt both on domestic economy and external economic relations. India was growing at over nine per cent before the global financial crisis hit the world and had a fall to 6.7% in 2008-09. The growth rate, however, improved to 7.4% in 2009-10 and a revertion to pre-crisis growth level of 9% is being expected for 2010-11 period[3].

Externally, India’s trade with ASEAN nations has steadily grown (from US$ 2.4 billion in 1990 to US $50.1 billion in 2010). The figure is likely to go up to US$ 70 billion by 2014 under the impact of the signed India-ASEAN Free Trade in Goods Agreement in September 2009.[4] A Similar agreement with ASEAN in services and investments may be concluded in 2011. India has become the seventh largest trading partner for ASEAN. Worth mentioning has been India’s ability to negotiate (with Thailand) or conclude (with ASEAN, Malaysia, Japan, Republic of Korea, Singapore and Indonesia), agreements of various types – on free trade and comprehensive economic cooperation. All ASEAN major powers are now connected to India through trade pacts.

New Delhi’s participation in the EAS process including in the Hanoi (Vietnam) Summit (October 2010) is adding momentum to India’s drive towards regional economic integration. The Bay of Bengal Initiative for Multi- Sectoral Technical and Economic Cooperation (BIMSTEC), established in 1997 as a bridge between South and Southeast Asia and the Mekong- Ganga Cooperation (MGC) are other building blocks of India’s Look East policy. India’s stated vision is to bring together such mutually beneficial partnerships under a web of a Pan-Asian Free Trade Agreement (PAFTA), as a driver of growth and economic integration in the entire region and a starting point for building an Asian Economic Community (AEC).

The Look East policy has also facilitated dialogue from political and security perspectives between India and East Asian nations. India is taking part in the annual summits with ASEAN and the EAS meetings and also bilaterally, is playing a key role under a system providing for regular annual dialogue both at summit level and that of foreign ministers. On security matters, India is getting increasingly integrated with the ASEAN Regional Forum (ARF) to promote regional cooperation in matters like the maintenance of security of sea-lanes of communication. India’s goal has been stated as setting up a polycentric security order, based on the need for a cooperative approach, considering the East Asian diversity.

The question as to how the People’s Republic of China (PRC), a major East Asian power is reacting to India’s Look East policy, assumes great significance, for discerning Beijing’s practical approach towards India’s role in East Asia integration. While there has so far been no official PRC comment on India’s Look East policy, the country’s state-controlled media have given an indication to the thinking at higher levels. For example, the media have seen a military dimension in India’s Look East policy, alleging that it is geared to hedge against China through developing military relations with the PRC’s surrounding countries. In this connection, port calls by Indian naval vessels in countries like Vietnam and the Philippines have come under their criticism. [5]

Another write-up by an individual, but carried by the People’s Daily, the party mouthpiece, commenting on Indian Prime Minister’s visit to Japan in October 2010 criticised India for ‘encircling’ China through its Look East Policy and exploiting Beijing-Tokyo rift. It has observed [6] as follows: “History is a great teacher. India’s “Look East policy” was born out of failure—- the failure of India’s Cold War strategy of “playing both ends against the middle”, today, India is harping on the same string, but should wisely skip the out-of-tune piece. No matter what a strong temptation, it is at the idea of benefiting, from China and Japan playing off each other or killing the rival by another’s hand.”

Also, some Chinese think tanks have viewed that India’s Look East policy towards ASEAN has maritime implications and at the second stage of the policy, New Delhi will expand the scope into political and security realms and bring the India-East Asian cooperation on counter-terrorism, maritime security etc under its grand strategy aimed at controlling the Indian Ocean, particularly the Malacca Strait.[7] They have at the same time assessed that India, despite its Look East policy, will always have limitations in interfering in regional hotspots like Taiwan, South China Sea islands and North Korea and that as such, the countries in East Asia may see India as an Indian Ocean power only, rather than that of the Asia Pacific. [8]

Overall, it is apparent from the foregoing that what worries Beijing most is the strategic dimension of India’s Look East policy.

The second question above concerning links between China’s current perception of geo-political conditions in East Asia and its views on India’s regional role, is important to the subject under discussion. Firstly, the PRC now seems to believe that the US is back in Asia, after remaining preoccupied in the Middle East; its alliances with Japan and South Korea are being renewed, along with no change in the deployment of US missile systems in the region, weaponisation of outer space and nuclear proliferation. The PRC thinks that on key issues like maritime claims in East and South China Seas, Washington’s position is hurting China’s interests. Also, the US has come out in favour of India’s active role in East Asia (e.g President Obama’s statement in New Delhi, November 2010). Beijing also has a strategic view that the Indo-US civil nuclear cooperation agreement is against the interests of the international non-proliferation regime and that India’s nuclear programme is a security threat for China. It is also deeply suspicious of the anti-China directions of the contents of the developing India-Japan security relations.[9] Notably, the PRC also feels that the ASEAN nations are keen to balance their ties with a ‘rising’ China with support for US presence in Asia. China’s various official documents and pronouncements, identify the ‘still not properly solved territorial and maritime disputes, Taiwan issue, the ‘ three evils’ of terrorism, ethnic separatism and religious extremism and threats to sea lanes of communication, as security problems. The PRC appears to feel that its new ‘core interest-based’ foreign policy which disallows any compromise on issues relating to ‘sovereignty’ like Taiwan, Tibet and Xinjiang, can be a response to the emerging geo-political situation in East Asia. In particular, under this policy, Beijing has hardened its position on its border issue with India and introduced nuanced shifts in its Kashmir and Pakistan policies. In a nutshell, the emerging geo-political regional picture points to China’s undiminished fears of a US strategy to ‘contain’ China with the help of its allies like Japan and partners like India. Such thinking will definitely have a bearing on China’s position regarding its acceptance of India as a partner in the regional integration process. To enable reaching a conclusion in this regard, it may be useful to have a close look at the points of divergences in the regional approaches of India and China; what follows is an attempt in that direction.

Multilateralism

While China and rest of the regional powers including India, in varying degrees, favour evolving of a ‘multilateral’ regional mechanism, there appear to be some differences in their perceptions on this count. In the main, the PRC accepts ‘multilateralism’ concept as long as it does not hurt Chinese interests. For e.g, Beijing sees no place for ‘multilateral’ approach on solving the South China sea maritime disputes, saying that settlement to such problems should be reached bilaterally. To be seen in this context is the criticism of the Chinese Foreign Minister Yang Jiechi against a proposal of US Secretary of State Hillary Clinton providing for setting up of a multilateral ‘dispute resolution mechanism’ to address the disputes concerning South China sea islands, and his caution to the US against internationalising the issue. Similar is the case with China’s stand on Senkakus issue dividing it and Japan. Beijing wants to settle the issue bilaterally with Tokyo and opposes the US claims that the Article No.5 of the US-Japan Treaty of Mutual Cooperation and Security applies to Senkakus, which makes the issue a tripartite one.
EAS membership

Nations intending to enter the EAS are required to meet three conditions- join the ASEAN Treaty of Amity and Cooperation, establish ‘substantive’ relationship with ASEAN and acquire the status of an ASEAN dialogue partner. Both New Delhi and Beijing are supporting the membership of non- East Asian countries like India, Australia and New Zealand in the EAS, noting that they have fulfilled the three conditions. There is however a subtle difference between the standpoints of the two. As Chinese Premier Wen Jiabao feels, “ regional integration should be promoted by the countries in the region, with characteristics of the region and suited to the needs of the region”, while simultaneously giving “full consideration to reasonable interests in the region of non-East Asian countries”.[10] The term “ full consideration” implied a secondary status to the three EAS partners from outside the region. As early as early 2005, China was diplomatically active in dissuading nations in the region from lobbying for India’s membership; this received no support from regional nations, which was interpreted as reflecting in general the keenness of East Asian powers to have India as a balance against China’s growing profile in the region. Consequently, Beijing was forced to choose the next best option, by attempting to divide the EAS membership into two blocs- ‘Core’ states with China leading inside the 10 plus 3, as main channel for building ‘East Asia Community’ and the three peripheral states of India, Australia and New Zealand, being described by the Chinese as ‘outsiders’.[11]

Who will play central role in the EAS mechanism?

  • China and India recognise the ‘centrality’ of ASEAN in the process of East Asia cooperation. Beijing on its part adds a rider to this by saying that existing mechanisms like China-ASEAN summit (10+1), ASEAN-China-Japan-ROK (10+3) Summit, and the China-Japan-ROK Summit should play a role in the process[12]. It makes no mention of ASEAN plus 6, which includes India and lays heavy emphasis on the role of 10 + 3 mechanism with the PRC constituent providing ‘long term and strategic guidance’ and acting as the ‘main channel’ for East Asia cooperation. In Beijing’s view, China is a powerful promoter of and a pillar to such cooperation, which has the potentials to develop into an East Asian Commonwealth. This contrasts with the importance being given for regional cooperation by India to the ASEAN plus 6, not to ASEAN plus 3.

Security Order in East Asia

  • On the desirable security order in East Asia, the formulae of India and China are at variance. New Delhi’s prescription for a ‘polycentric’ security concept for East Asia would imply India’s opposition to any country (read China) dominating the regional security architecture when set up. Beijing, on the other hand, talks about a ‘regional security environment of mutual trust, guaranteeing stability by bridging differences through dialogue on an equal footing’. Also, India is against creation of any ‘ineffective sub-regional security arrangements’. China on the other hand prefers security mechanisms at different levels and in different areas, implying differences with India on this account.

Asian Economic Community (AEC)

  • The AEC, as the Indian Prime Minister visualizes, would mark the formation of an ‘arc of advantage’ spanning the distance from the Himalayas to Pacific Ocean and providing for large scale movements of peoples, ideas and connectivity. In Indian eyes, the AEC when formed will be the third pole of the world economy after the European Union (EU) and North American Free Trade Agreement (NAFTA). China on the other hand is maintaining a silence over India’s AEC proposal. In fact, so far no Chinese leader or document has ever mentioned about the AEC so far. The PRC’s state-controlled media have however given a negative connotation to India’s AEC proposal by observing “India’s AEC proposal is not being warmly responded to by any country, as each has its own considerations”.[13]

US Participation

  • China has welcomed the participation of Russia and the United States in the East Asia Summit with the hope that the two countries would play a constructive role[14]. Noting US entry, Chinese academic circles have demanded that Washington, as an EAS member nation, should “ provide more public good such as anti-terrorism and disaster relief, rather than provocative behaviour in stirring up disputes”. They have at the same time warned that the ASEAN may risk losing its leading role if the US is to get deeply involved. [15] Russia and the US are to become formal EAS members from 2011. China’s nod to US participation marks a departure from its earlier position of resisting Washington’s entry. It is possible that Beijing’s changed stand has been due to the necessity being felt by it to go along with the positions of the ASEAN nations, favouring the US participation. Already statements are being made in China to justify the change in stand. “Though China’s East Asia strategy and the US-Asia Pacific strategy have differences, the two sides will continue to keep a balance despite all the conflicts and disputes”, say US experts in the PRC.[16] US Secretary of State, Hillary Clinton, has also indicated (EAS Summit, Hanoi, October 2010) that Washington and Beijing are willing to use the EAS to eradicate tensions. Nevertheless, China’s welcome to the US looks only conditional; it still does not want any deeper role for the US in the region. This needs to be understood in the context of China’s possible realisation that Washington is already becoming closer to ASEAN, on issues sensitive to China like the territorial disputes in the South China Sea. In particular, it may be concerned with the remarks of the US Secretary of State Hillary Clinton considering these disputes as a ‘pivot’ of regional security[17] and the call (already covered in the earlier paragraph of this paper), for a dispute resolution mechanism with respect to territorial issues, as build up on the 2002 Declaration on the conduct of parties in the South China Sea signed by ASEAN and China. The PRC Foreign Minister Yang Jiechi has warned the US that South China Sea territorial disputes, which are bilateral in character, should not be converted as multilateral issues in this way.[18] Also, Beijing may be suspecting the US motives in recognising India as an East Asian power [19]; specifically it may be wary of President Obama’s intentions when he called upon India during his visit to New Delhi, to ‘engage’ East Asia. [20] The PRC may feel that any idea of the US and India acting together in East Asia may have strategic implications for it. At the same time, the PRC may feel encouraged over Russia’s admission creating a balance in the EAS in China’s favour.

East Asia FTA

  • China is giving emphasis to the leadership of ASEAN plus 3 grouping which includes the PRC, in realising the target of a Free Trade Area (FTA) for East Asia. It has asked for a dialogue between the concerned nations. There are no indications that Beijing is for involving ASEAN plus 6 grouping, which includes India in this matter.[21]

ASEAN Community

  • ASEAN nations have adopted a roadmap to form an ASEAN Community by 2015 based on three pillars – political and security community, economic community and socio-cultural community. In the plan of action formulated by ASEAN Secretariat, the ASEAN-India dialogue partnership has been viewed positively in the matter. China has expressed its full support to this plan. What are China’s views on ASEAN plus 6, which includes India, playing a role in formation of ASEAN Community? There is no clear answer at the moment.

Conclusion

The process of building an East Asian regional order is going to be complex and time consuming, due to following reasons- (i) the EAS mechanism tasked to create such an order, functions in reality only as an appendage of ASEAN, which is the ‘driving force’ for setting up EAS, and thus enjoys no independent identity of its own. Thinking that once East Asian Architecture is set up, the ASEAN’s regional importance may get diluted, the ASEAN may like to keep the EAS only as a forum for discussions. The same logic may also apply to the case of China, which would like to put the ASEAN plus 3 mechanism above the rest in the matter of regional integration, thinking that only then it could be in a firm position to protect its geo-strategic interests, (ii) the EAS nations follow diverse economic and political systems and suffer from deep religious and cultural divides, (iii) East Asia is a region of serious territorial conflicts and competition among leading powers and (iv) the EAS charter is based on the vague concept of ‘shared interests’ of the member nations. In these circumstances, many view the ongoing EAS summits as talk shops. In contrast, there is a clear vision with regard to building of ASEAN Community, to come up by 2015 under the ASEAN legal and institutional framework.

From the China-India divergences listed above, it can be seen, rather without doubt, that Beijing has reservations on giving leading roles in the East Asia integration process to ‘outsiders’ like India, Australia and New Zealand. Regarding the US participation, all evidences suggest that though Beijing has relented on Washington’s presence in the EAS albeit without any deeper role, it still considers the US as principal security challenger to the PRC in the region. The bottom line is that in Beijing’s perceptions, only a regional order dominated by it, will serve its strategic interests.

India appears to be aware of the existing limitations to the regional integration. Thus, while remaining keen to nourish economic partnership at regional levels, it is also moving ahead with strengthening cooperation with East Asian nations bilaterally. India’s conclusion of several FTAs and promotion of trade ties with individual regional nations may prove this point. Most important is that India’s such bilateral engagements are no longer economic and they are gradually becoming multi-dimensional encompassing political and military aspects. It is this point, which is causing worries to China. India is still not in a position to match China’s deeper bilateral engagements with regional nations. But New Delhi is forging ahead to fill the gap and as a result, rivalry and competition between China and India as they spread their influence regionally, are likely to intensify in the coming years.

Separately, relations with China have become strategically important for India, which is making efforts to strengthen confidence building with the PRC, despite the fact that there is yet no solution to the strategic issues dividing them. New Delhi is simultaneously working towards building partnership with the US, besides getting closer to other regional powers with clout, like Japan, ASEAN etc, while taking care that it is not seen as belonging to any anti-China grouping. Nevertheless, it cannot be denied that notwithstanding assurances from New Delhi, Beijing continues to suspect India as tilting towards the US. New Delhi needs to take further imaginative steps to draw Beijing firmly into the bilateral economic and trade web. No doubt, the trade ties are on the upswing, but the process towards signing a Comprehensive Economic cooperation agreement with China should be speeded up by India. In this way, China would willy- nilly become prepared for offering quid pro quo to India in the matter of consolidating its connectivity to East Asia. New Delhi should also take advantage of the sentiments of countries like Singapore, Thailand and Japan, which may like to leverage friendship with India to balance a ‘rising’ China. More the support India gets from the ASEAN, China’s surrounding nations and Japan, stronger will be the position of India to neutralise China’s apparent doubts on India’s Look East policy. It is a good sign that India has of late started moving along these directions.

(The writer, Mr.D.S. Rajan, is Director, Chennai Centre for China Studies, Chennai, India. This formed the basis for a presentation by the writer at an International Conference on “India in Emerging Asia-Pacific: Challenges and Opportunities in the New Decade”, organised by the Pondicherry University on 9-11 March 2011. Email: [email protected])

[1] Joint Communiqué issued by India and China after talks between Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao at New Delhi on 16 December 2010.
[2] -ibid-
[3] ‘India returning to high growth path’, says Finance Minister, PTI, 10 January 2011
[4] Statement of Joint Secretary, Ministry of Commerce and Industry, New Delhi, 22 February 2011
[5] China Institute of International Studies website (Chinese), 9 march 2007
[6] ‘India’s Look East policy means look to encircle China’, Li Hongmei, People’s Daily online, 27 October 2010
[7] Testimony before US-China Economic and Security Review Commission, by Professor James Holmes, US Naval War College, 14 June 2007.
[8] Professor Zhao Gancheng, Director of South Asia Studies, Shanghai Institute of International Studies, Shanghai (Paper at SIIS-Brookings Conference on Regionalism in Asia, Shanghai, 11-12 December 2006)
[9] “Japan and India forge military alliance to attack China from both front and rear”, China Radio International, World News (Chinese), 30 October 2008
[10] Premier Wen Jiaobao’s speech at the East Asia Summit (Kuala Lumpur, 14 December 2005)
[11] People’s Daily, 7 December 2005
[12] ‘Premier Wen Jiabao attends the fifth East Asia summit’, www.mfa.gov.cn/eng/zxxx/t765870.htm dated 30.october 2010.
[13] People’s Daily, 7 December 2005
[14] Premier Wen Jiabao, no. 9
[15] “Wen to US; Be Constructive”, China Daily , 31 October 2010, quoring Professor Jin Canrong , People’s University, Beijing.
[16] ‘East Asian Unity will survive rocky waters’, Professor Su Hao, Director of the Asia Pacific Research Centre, China Foreign Affairs University, Global Times, 25 October 2010
17. ‘The US, ASEAN and China: Emergence of new alignment’, www.eastasiaforum.org/2010/08/28
[18] ‘A tale of bilateralism and secrecy in the South China Sea’, www.eastasiaforum.org/2010/08/03
[19] ‘US eyes India’s bigger role in Asia’, Wang Zhaokun, Global Times, 27 October 2010
[20] ‘United States willing to assist China-India relations’, www.2point6billion.com/news/2011/02/03/united-states-willing-to-assist-china-india-relations-8552.html
[21] ‘China proposes immediate start of East Asia FTA talks’, People’s Daily online, 2 March 2011

SAAG

SAAG

SAAG is the South Asia Analysis Group, a non-profit, non-commercial think tank. The objective of SAAG is to advance strategic analysis and contribute to the expansion of knowledge of Indian and International security and promote public understanding.

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