Japan omits China, asks Asian democracies to unite

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Japanese Prime Minister Shinzo Abe called on Wednesday for a broader Asia partnership of democracies that would include India, the United States and Australia but leave out the region's superpower, China.

Abe's comments came in an address to a joint session of India's parliament, at the start of a high-profile visit that aims to boost trade between Asia's largest and third largest economies and counter China's growing strength.

About 200 businessmen are accompanying Abe on the visit.

This partnership is an association in which we share fundamental values such as freedom, democracy and respect for basic human rights as well as strategic interests, Abe told lawmakers and diplomats in a speech that did not name China.

By Japan and India coming together in this way, this 'broader Asia' will evolve into an immense network spanning the entirety of the Pacific Ocean, incorporating the United States of America and Australia.

While Abe has improved ties with China, which had frayed under his predecessor, he has also stressed the need to forge closer links with democracies in what analysts have said was a tacit criticism of Beijing.

Tokyo has sought to build closer security ties with the United States, Australia and India, and its navy is due to take part for the first time in joint U.S.-India exercises to be held in the Bay of Bengal next month.

But in a sign that New Delhi was keen not to upset China -- which is likely to soon be its biggest trade partner -- Indian Foreign Secretary Shiv Shankar Menon warned on Monday against a zero sum game with Beijing.

The trip, however, was not just about politics.

India was using the visit to woo much-needed investment to build infrastructure projects from transport to nuclear power.

The sheer size of the Japanese business delegation -- outstripping a recent Abe trip to the Middle East -- testified to the importance of business ties.

INDIAN BOTTLENECKS

India's poor transport network and frequent power shortages are seen as the Achilles' heel of India's fast-growing economy that hinders its ability to compete with its major global competitor, China.

The visit came just as Prime Minister Manmohan Singh faces a huge political crisis as leftist allies try to block a civilian nuclear deal with the United States that the government and many business leaders say is crucial for India's economy.

Singh was expected to seek Japan's support for the energy deal, but Abe was likely to remain non-committal, given the sensitivity of the issue in Japan, the only country to suffer an atomic bombing.

Critics argue the India-U.S. pact could undermine efforts to stem nuclear proliferation by allowing India to pursue nuclear energy without adhering to non-proliferation obligations.

Japan is one of the biggest suppliers of the best nuclear reactors in the world critical to process industries, Reliance Industries Chairman Mukesh Ambani, one of India's most important businessmen, told a Japanese business forum.

This will help Indian aspirations to become energy sufficient.

Tokyo is considering offering low-interest loans to help build a high-speed freight rail link between New Delhi and Mumbai as well as funds for a $90 billion industrial corridor between the two cities, Japanese officials said.

The aim is to boost Indian manufacturing by helping make use of its cheap workforce while solving its poor infrastructure and transportation problems.

These projects are critical to India's aspirations of wresting the manufacturing space that at present is dominated by China, said a report prepared by KPMG consultancy group and the Federation of Indian Chambers of Commerce and Industry

Abe also pledged to double bilateral trade to $20 billion by 2010. Japan is only India's 10th-largest trade partner, as Japanese firms have focused on China and Southeast Asia.

India is also aiming to seal an economic partnership agreement -- expected to include a free-trade accord -- by the end of this year, Indian Trade Minister Kamal Nath said.

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