Dialogue  July-September  2007, Volume 9  No. 1


India’s Look East Policy and China’s Response

D.S. Rajan*                                                              

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 civilisational neighbours in South East Asia and East Asia” - Dr. Manmohan Singh, Prime Minister of India (Kuala Lumpur, 12 December, 2005)

India’s Look East policy, under implementation since early 1990s, has been in response to the initiation of economic reforms and liberalisation within the country and significant changes occurring in the world’s politics and economy. The ASEAN’s economic, political and strategic importance in the Asia-Pacific region and its potential to become a major trade and investment partner, have been particular motivating factors for India. The scope of the policy now stands 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. Under its impact no doubt, the country’s growth rate has been impressive ¯ average 9% in last three years, to quote the latest figure. Externally, trade with ASEAN nations are steadily growing (from US$ 2.4 billion in 1990 to US$ 23 billion in 2005). Similar has been the case with India’s trade with East Asia Summit (EAS) partner countries (from US$ 8 billion in 1990 to US$ 67.6 billion in 2005).1 Also, India has been able to achieve progress in terms of negotiating (with ASEAN, Malaysia, China, Japan, the Republic of Korea and Indonesia) or concluding (with Singapore and Thailand) agreements of various types ¯ on free trade, comprehensive economic cooperation and regional trading arrangement. New Delhi’s participation in the EAS process including in the Cebu (Philippines) Summit (January 2007), is adding momentum to India’s drive towards regional economic integration. 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 AEC, in India’s eyes, will be the third pole of the world economy after the European Union (EU) and North American Free Trade Agreement (NAFTA).

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.

How is the People’s Republic of China (PRC), a major East Asian power along with Japan, responding to India’s Look East policy and its emerging concepts on regional integration process? This question assumes great significance, as without any doubt, China’s response is going to be one of the major factors, crucial to determining the success or failure of the process.

From the policy statements at high levels coming from the two sides, it becomes clear that there are both convergences and divergences among China and India on the subject.

Views being shared by the two can be identified as follows:

          §    Both China and India agree that with ASEAN as driving force, a harmonious, peaceful and prosperous East Asia can be built and an East Asian Community can be formed.

          §    The two nations are in favour of non-East Asian countries taking part in the regional integration process. There is however a subtle difference between the viewpoints of China and India on this point. It is true that in early 2005, China was diplomatically active in dissuading nations in the region from lobbying for India’s membership; This received no support from any country except for Malaysia, which was interpreted as reflecting in general the keenness of regional powers to balance 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, described in the Chinese media as ‘outsiders’.2 China also quickly moved for Russian participation, in an effort to balance the presence of US allies in the EAS.

The same Chinese approach is visible even now, with Beijing still talking about “ promotion of the regional integration by the countries in the region, with characteristics of the region and suited to the needs of the region”, while simultaneously pleading for giving “full consideration to reasonable interests in the region of non-East Asian countries”.3 The term “ full consideration” implied a secondary status to the three EAS partners from outside the region. India, on other hand, makes no such distinction, standing for equal status to all-EAS member nations, spread over ‘from Himalayas to the Pacific’4. China’s approach, by inference, appears to be based on a premise that the presence of US allies in the EAS may not serve the purpose of the PRC to dominate the EAS process.

          §    On security order in East Asia, the formulae of India and China do not seem to contradict each other. New Delhi’s polycentric security concept is being matched by Beijing’s ‘regional security environment of mutual trust’ guaranteeing stability by bridging differences through dialogue on an equal footing. A common interest surfacing relates to the protection of the sea-lanes of communications.

In an overall sense however, China may find in India, a rival nation projecting its power not only in the PRC’s neighbourhood, but also extending it up to Pacific Asia. For the moment, India may appear to the PRC as confining its efforts to maintain a moderate military presence in the West Pacific, joining anti-terror and anti-piracy operations. But, as a Chinese scholar puts it, India’s Look East policy towards ASEAN has maritime implications and at the second stage of the policy, India will expand 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.5 China (and other East Asian powers) may also not be sure on how India’s security role in the region will be relevant on issues like Taiwan, South China Sea islands and North Korea. For these reasons, Chinese analysts predict that countries in East Asia may see India as an Indian Ocean power, rather than that of the Asia Pacific 6

The discernible perceptional differences between China and India on regional integration are as follows: -

          §    China’s is laying heavy emphasis on the role of ASEAN + 3 with the PRC providing ‘long term and strategic guidance’, 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 by India to a 10 + 6 (ASEAN plus 3 plus India, Australia and New Zealand) approach. Through its Look East policy, India has started playing a crucial role in Asia-Pacific where China is already a big player; this is giving rise to a Sino-Indian competition in the region.

          §    China has stated that ‘it supports open regionalism, has an open-minded approach to regional integration and opposes self-enclosed or exclusive East Asia cooperation or cooperation against any particular party. Cooperation should grow in a balanced way, bringing benefits to all and bridging differences through dialogue on an equal footing. Disputes should be resolved through holding friendly consultation and seeking common ground while shelving differences’. This stand exposes China’s apprehension about the future course regarding still unsolved regional issues (e.g. South China Sea islands, Sino-Japan conflict on gas exploration in East China sea, Taiwan etc) and desire to insure the PRC against targetting by external powers. In contrast, it is obvious that no such compulsions exist for India, which perceives East Asia as free of any conflict potential; this is despite India-China problems, which both the sides seek to solve bilaterally.

          §    At least for now, China is showing hesitancy in accepting India’s goal to create a Pan-Asian FTA as starting point for an Asian Economic Community (AEC). Allaying concerns about the inherent regional character of the AEC, India is arguing that there is nothing wrong in such regionalism, as already the EU and NAFTA have come together and what is going to happen is the integration of all the three groups.7

While no Chinese leader seems to have spoken on PAFTA and the AEC in ASEAN/EAS gatherings, the PRC’s State-controlled media have come out with a stand that “India’s AEC proposal is not being warmly responded to by any country, as each has its own considerations”.8 India had already expressed its support to Japan’s proposal (August 2006) for a Pan Asian trade bloc, consisting of ASEAN plus 6 nations. Through its media, Beijing had strongly attacked Japan for aiming to ‘maintain its dominant position in the East Asian economic order, contain China and South Korea and restricting ASEAN’.9 Beijing’s attitude could reflect its suspicions that such expanded trade bloc may lead to a shift in balance of power in the region and pour cold water on its intentions to play a domineering role in the East Asian Community.

          §    In trade, India is keen to catch up with China in the region. A competition between the two in capturing the lucrative ASEAN markets is likely. China-ASEAN trade remained robust (more than USD 100 billion in 2006). India is trying to augment its trade level with ASEAN (below USD 20 billion in 2006). India is also losing no time in responding to China-ASEAN FTA, with quick steps to sign a similar FTA with ASEAN.

          §    India’s is getting closer to Thailand, Cambodia, Laos, Myanmar and Vietnam in the fields of economy and politics and security. China, particularly through the media, has alleged that India’s Look East policy is also geared to hedge against China through developing military relations with China’s surrounding countries. Particular accusation has been that India is following a three-pronged strategy to monitor China’s missile systems including in the border areas – CARTOSAT 2A satellite programme, radar station in Mongolia (to monitor space activities in Gansu, south of Mongolia), and cooperation with US, Japan, Australia and even Taiwan (in the field of signal intelligence).10 Reference to India-Taiwan collusion marks a new trend. The media is also pointing out towards the port calls by Indian naval vessels in Vietnam, Philippines and the expected visit of India’s aircraft carrier to Malacca Straits and the Pacific, subsequent to the Bay of Bengal Joint Naval Exercise starting from September 4, 2007.11

    A key question will be as to what extent China’s perceptional differences on the Look East policy will affect Sino-Indian relations? Certainly, Beijing views the policy as a challenge to its intention to play a central role in the Asia-Pacific region. Its fears have assumed wider connotations in the recent period, centering round a doubt whether India is on the way to becoming a part of Western alliance. Chinese State-controlled media have criticised what they called the common wish of the US and India 12, to balance the forces in Asia through their nuclear and defence cooperation as well as India’s endorsement of Japanese Premier Abe’s proposal for a quadrilateral democracy initiative involving New Delhi, Canberra, Washington and Tokyo, allegedly targetting the PRC. They have also focussed attention on the India-Japan-US military exercise held recently off Japanese coast and the five-nation (India, US, Japan, Australia and Singapore) Naval drill in the Bay of Bengal to start on September 4, 2007. China has other external priorities too and its main attention is going to be on Taiwan, a potential flash point impacting on relations with the US, most important for the country’s foreign policy. Based on such factors, the PRC is moving closer to Russia to use the latter as counter-weight and a strong security and military component is emerging in their ties.

China is watching its relations with India from the overall perspective given above. It may not miss the fact that India is still a weak player in terms of trade and security in East Asia and it would take a long time for New Delhi to consolidate its position in East Asia. Beijing at the same time is aware that bilateral ties with India would continue to be important for China, against the basic requirement of a peaceful periphery for the country’s modernisation. What can be expected is that China may keep a close watch for some more time on the emerging contours of India’s ties with the West and Japan. It may not mind the effect coming from competing with India and prefer to avoid any confrontation with India in the region at this stage. One cannot rule out a beginning of Sino-Indian strategic rivalry in East Asia at some point in future, if and when India, through its Look East Policy, is able to complete its integration in East Asia. For New Delhi, that job is not going to be easy.


1 Prime Minister Manmohan Singh ’s speech at Fifth India-ASEAN Summit (14 January, 2007)

2 People’s Daily, 7 December 2005

3 Premier Wen Jiao Bao speech at the East Asia Summit (Kuala Lumpur, 14 December 2005)

4 Secretary East, Ministry of External Affairs, India (Kuala Lumpur, 14 December 2005)

5 Testimony before US-China Economic and Security Review Commission, by Professor James Holmes, US Naval War College, 14 June 2007.

6 Professor Zhao Gancheng, Director of South Asia Studies, Shaghai Insitute of International Studies, Shanghai (Paper at SIIS-Brookings Conference on Regionalism in Asia, Shanghai, 11-12 December 2006)

7 Prime Minister Manmohan Singh, media briefing, (Kuala Lumpur, 4 December 2005)

8 People’s Daily, 7 December 2005

9 People’s Daily, 26 August, 2006.

10 International Herald Monitor, (Chinese), Xinhua affiliated journal, 22 August 2007 and China Defence Daily, 20 August 2007

11 China Institute of International Studies website (Chinese), 9 march 2007

             12 People’s Daily, 30 August 2007.


Dialogue (A quarterly journal of Astha Bharati)

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