Beijing has shown restraint in India's involvement in South China Sea oil exploration, according to a scholar who also said China had kept a low profile on the Kashmir issue to avoid stoking tensions. Dr Li Li, deputy director of the Institute of South and Southeast Asian and Oceanian Studies at the China Institutes of Contemporary International Relations, said China was trying to persuade India to steer clear of the South China Sea to avoid further problems in the disputed waters. 'China doesn't want India to work with Vietnam on oil exploration in the South China Sea ... because the South China Sea itself is a very complicated issue,' she said yesterday at the First Academic Summit on China-India Co-operation in Hong Kong, noting that 'a lot of mistrust exists between China and India'. Li said Beijing was concerned that India's state-run explorer, the Oil and Natural Gas Corp, which last month signed a three-year deal with PetroVietnam to co-operate in the oil sector, would suffer losses if an oil project in the South China Sea was halted or called off because of Chinese opposition. In response to the deal with Vietnam, a commentary by China Energy News, published by party mouthpiece People's Daily, on October 16 said: 'India's energy strategy is slipping into an extremely dangerous whirlpool.' Referring to the commentary, Li said: 'Beijing just advised the Indian company to reconsider and pull out of their investment in the South China Sea, and warned India it would lose much more from broken ties with China. 'Even Indian media have questioned their oil company about whether it's worth taking the risk of investing in the disputed South China Sea.' As for Kashmir, a region claimed by both India and Pakistan where insurgents waged a bloody battle for independence in the early 1990s, Dr Rajeswari P. Rajagopalan, a senior fellow of the Mumbai-based Observer Research Foundation, a public-policy think tank, accused China of changing its policy of neutrality. 'China, in fact, follows a policy of double standards in regional conflicts ... [It] is extremely sensitive about the South China Sea issue, where it does not want any external intervention, but the Chinese policy on Kashmir today is that of intervention,' she said, referring to China's recognition of Pakistan's sovereign claim to part of Kashmir and the two countries' co-operation in nuclear and missile development. But Li said Beijing had actually kept a low profile on the Kashmir issue since the Shanghai Co-operation Organisation (SCO) summit in June. She said China has been encouraging dialogue between Pakistan and India and kept them both as observers of the SCO, despite both countries seeking full membership in the organisation. Iran and Mongolia are also observers. She also said that China had to co-operate with India over security because the PLA Navy did not want to challenge India's navy in the Indian Ocean. 'PLA Navy forces have been deployed in the South China Sea, where China has territorial disputes with many countries in Southeast Asia, so it's impossible for the Chinese navy to stage a war with the Indian navy,' she said. Chinese and Indian scholars generally agree that the two countries need to enhance co-operation in trade and economics, and they have suggested that the nations learn more about each other's economic systems by opening up more sectors to each other for exchanges.