Prime Minister Manmohan Singh first envisioned an Asian Economic Community (AEC) stretching from the Himalayas to the Pacific and constituting an 'arc of advantage'. The same idea has now been articulated by the External Affairs Minister, Pranab Mukherji in the Manila meeting of the foreign ministers during the East Asian Summit (EAS). Most of the community building exercises in Asia have come through ASEAN's initiatives; hence the AEC's prospects depend on the coming together of the two major stakeholders, India and China.

Together, the two countries account for three-fourths of the population of Asia and share between them 63 percent of the region's GDP in terms of purchasing power parity (PPP). They are two of the fastest growing economies in the region with a reasonable record on poverty alleviation. The two are also linked to the other Asian countries through a web of relations. The proposed AEC can become a reality only when the people in these two countries enjoy relative prosperity.

While India has been marketing the AEC in several gatherings, China sees itself as the nucleus of these initiatives. It has been hosting the annual Boao Forum for Asia since 2002 to gain a leadership position. When India proposed a pan-Asia Free Trade Area (FTA) to facilitate large scale movement of people, capital, ideas and innovations and to enhance a communitarian approach in the continent, China was busy engaging many of its neighbours through skillfully negotiated FTAs. These can be seen as indicators of both the countries' support for the proposed AEC.

The enthusiasm about AEC apart, many believe it to be a distant and a difficult milestone. Most analyses foresee success between 2015 and 2020. Partly, this is because Asia displays different levels of development, differences in political culture, ethnic composition and huge asymmetries in geographical size and population. Infrastructural development and linkages across the region are woefully low, and so is the level of intra-regional trade, as compared to the European Union and the NAFTA.

However, the fundamental reason for delay is the lack of enough trade linkages between India and China. Bilateral trade is very low in comparison to China's trade with other countries. The prospects of a Sino-Indian FTA are bleak in the near future. Sub-regional cooperation's, in particular the Kunming initiative, have been a non-starter. The two countries, despite an improvement in their political relations, have been competing for resources in different parts of Asia and Africa.

Recognizing the importance of regional integration in the emerging international economic order, the two countries agreed to expand cooperation within regional organizations and to explore closer regional cooperation in Asia during President Hu Jintao's visit to New Delhi in November 2006. Both have supported each other's participation in the Asian inter-regional, regional and sub-regional cooperation processes, including progress towards the setting up of the East Asian community. It is pragmatism that has brought the two countries into joining regional gatherings like the Shanghai Cooperation Organization (SCO), South Asian Association for Regional Cooperation (SAARC) and the Asia-Europe Meeting (ASEM).

However, if India and China are serious about the AEC, they must be more forthcoming. It is surprising that the 2.5 billion populations of the two countries do not have proper communication links to facilitate swift movement of people, goods, ideas and innovations. While commuting throughout Europe is becoming increasingly hassle free, a Mumbai-Shanghai super fast train remains an elusive dream. Even the Stillwell Road connecting India's northeast to China's Yunnan Province has not been opened; let alone the old silk route. If properly linked and optimized, border trade is bound to reach new heights and promote development in the border regions.

Community building exercises involve overcoming developmental disparities, political and cultural differences and require huge political and economic assistance. All futuristic analyses indicate that India and China will be the lead political, economic and military players in Asia and, therefore, the onus for driving the continent towards the AEC rests on them. Sino-Indian economic integration will have a spillover effect and help an early integration of Asia.

For much of the Cold War period and thereafter, Sino-Indian relations contained elements of competition and rivalry. The AEC has presented India and China with an opportunity to act as 'bridges' and 'linkages' to forge Asian unity. The two countries can make a beginning by investing in several sub-regional cooperation ventures beneficial to both of them, and work towards a mutually beneficial FTA in the long term. In this light, the proposed AEC promises to ensure the 'greatest happiness of the greatest number'.

Note: The views expressed herein are those of the author and do not necessarily reflect those of the Government.