Getting Wen146;s attention

Widely seen as a threat to South East Asia until the early 1980s, China has emerged as the principal economic partner for the region, put its boundary disputes in the South China Sea on the backburner. It is trying to build security partnerships with key countries of the region.

Dr Singh will have his task cut out in convincing the region that India8217;s Look East policy has some juice left in it.

East is red

While the US sulks at being left out of the East Asia Summit process, and Japan chafes at being marginalised in Asia, China paints east and southeast Asia red.

The focus next week in the Philippines will be on building an Asian economic community. While China makes good on its promises to accelerate free-trade talks with ASEAN, India8217;s own efforts in that direction have stalled.

When it takes hold in 2010, the China-ASEAN Free Trade Agreement CAFTA would bring nearly 1.7 billion people together into a single market that is worth nearly 2 trillion. Beijing8217;s trade with ASEAN has multiplied 15-fold since 1991 and stood at 130 billion. It could reach 160 billion this year and 200 billion next year. China is all set to become ASEAN8217;s largest trading partner.

China has replaced the US as Japan8217;s largest trading partner. With its deepening economic presence in the Korean peninsula and the prospect of Beijing becoming the subcontinent8217;s largest trading partner, a Sino-centric Asia is now close to reality.

While Indian analysts, obsessed with the US, debate Asia in old terms, for much of the region China is the principal point of reference in economic and political domains.

India8217;s ASEAN crisis

India8217;s trade with ASEAN is also growing, but from a much lower base and at a slower pace. India and the ASEAN have set a target of 30 billion for bilateral trade by 2007. India8217;s immediate problem has less to do with numbers but the deepening crisis in the free trade talks with the ASEAN. At the last round of the meetings in December 2005 at Kuala Lumpur, ASEAN officials publicly ridiculed the long list of nearly 1400 items that the Indian Commerce Ministry proposed to exclude from free trade.

Dr Singh stepped in to assure ASEAN leaders that India is serious about free trade and promised to conclude the negotiations by end 2006. Internally, Dr Singh put enormous pressure on the system to demonstrate flexibility.

While India has brought down the negative list to about 500, it insists on dealing with palm oil, a major export item from ASEAN, separately. ASEAN wants India to reduce its negative list to about 170-odd items. With talks going nowhere, ASEAN has apparently threatened to increase its own negative list to about 1,000 items.

If last year8217;s meetings are any guide, the India-ASEAN trade differences will be out in the open and could cloud Dr Singh8217;s visit to the Philippines.

Strategic railways

It8217;s not just on trade, even on mega transport projects, like the trans-Asian Railways,China is way ahead of India. More than three years ago, Prime Minister Vajpayee talked about a rail link between New Delhi and Hanoi in Vietnam. All India needed to do was to build a missing link of about 315 km between India8217;s Northeast and Myanmar. While the Indian project is languishing, China is all set to complete the rail line between Singapore and Kunming, in the South Western Yunnan province, by 2015. While laying a new rail line towards the Yunnan border, China is also funding the construction of various missing links in South East Asia.

China is also offering transit facilities to South East Asian countries to export their goods overland to Russia and Europe through its own rail network. India is sitting it out.