The Telegraph
Friday , August 22 , 2014
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Mission Hanoi to woo China irritants

Pham Binh Minh and Sushma Swaraj

New Delhi, Aug. 21: India is refining its two-decade-old Look East policy to try and wean away investments in China by countries locked in disputes with Beijing, the move coming days ahead of meetings between Prime Minister Narendra Modi and top Asia Pacific region leaders.

Foreign minister Sushma Swaraj will meet all Indian ambassadors to Southeast Asian nations in Hanoi on August 26 to outline plans to build on economic and strategic opportunities opened up by the regional tensions, senior government officials said.

A day before that, on August 25, Sushma will meet Vietnam foreign minister Pham Binh Minh to identify potential investments Hanoi may want to shift to India from China, the officials said. President Pranab Mukherjee, too, is visiting Hanoi next month — with the same message.

“Many of these countries have indicated to us they would like to reduce their investments in China because of tensions with Beijing, and are looking at India as an alternative destination,” an official said. “The visits to Vietnam and the meetings will, we hope, help us pull some of those investments to India.”

The escalating tensions between China and neighbours like Japan, South Korea, Vietnam and the Philippines over the past two years have already made many of these nations lunge towards India as a regional strategic counterbalance against Beijing.

A wary China is edgily watching for signals of India joining any grand strategic alliance against it consisting of the US, Japan and possibly Australia, along with smaller nations.

India has consistently maintained that it has no intentions of joining any effort to contain China, and officials insisted Sushma’s meetings in Hanoi too aren’t aimed at any strategic containment of Beijing. India, they point out, is after all also seeking massive investments from China.

But the focus on using China’s tensions in its neighbourhood to try and win investments by these nations for India — and not just a few oil and gas blocks that Vietnam has offered in contested waters — represents a subtle shift that matches Modi’s emphasis on economic diplomacy.

This approach — just ahead of Modi’s meeting with Japanese Prime Minister Shinzo Abe in Tokyo on September 1, with Australian Premier Tony Abbott in New Delhi on September 4 and with Chinese President Xi Jinping likely in mid-September — also represents a rare role reversal for India.

“Far too often, we’ve been at the receiving end of China’s economic diplomacy in our neighbourhood,” another official said. “In a sense, we’re trying to pay them back in their own coin.”

Over the past decade, China seized on virtually every opportunity to use India’s frayed ties with its South Asian neighbours to emerge a leading trade partner with these nations.

But while China’s investments in South Asia far exceed those by these countries in China, the opposite is true with key countries in Southeast Asia like Indonesia, the Philippines and Thailand.

The three nations have over the past decade together invested more in China — $8 billion (Rs 48,000cr) — than the $6 billion (Rs 36,000cr) that the world’s second-largest economy has invested in them.