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SINGAPORE, April 21 (AFP) - India is perceived as the most vulnerable country in Asia in terms of external threats, while Australia, Hong Kong, Malaysia, China and Vietnam are the least exposed, a regional survey showed.

Hong Kong, benefiting from its association with a stable mainland China, got a better score than regional rival Singapore, which is near Indonesia -- one of Asia's most volatile countries, the Political and Economic Risk Consultancy (PERC) said.

The US-backed fight against Islamic extremists in the southern Philippines bears watching because its success or failure could shape Washington's role in Asia in the medium term, PERC said in its latest Asian Intelligence survey and analysis.

The Hong Kong-based PERC surveyed more than 1,000 foreign businessmen in 13 Asian countries asking them how they perceived external threats to affect the business environment in their places of operations.

"The most notable feature of the overall scores was that India was the only country where such risks were perceived to be very high," it said.

"It was vulnerable to fallout from social instability in other countries (Sri Lanka, Pakistan and Afghanistan) and its diplomatic relations with neighbouring countries (notably Pakistan) were very strained at the time of the survey."

PERC also noted that both India and Pakistan have nuclear weapons.

On a scale of zero to 10, with 10 the worst possible grade, India scored 8.22. Taiwan, which faces a military threat from China, was in distant second with a score of 5.19.

The Philippines came in third with 4.96, trailed by Indonesia with 4.67.

PERC said businessmen in Indonesia and the Philippines were more concerned with domestic instability rather than external risks posed by links between local Islamic militants and Osama bin Laden's al-Qaeda terror network.

South Korea, locked in a standoff with the Stalinist North, was in fifth place with a grade of 4.33, followed by Japan 4.28, Thailand 4.26 and Singapore 3.74.

China and Vietnam tied for ninth place at 3.44, followed by Malaysia 3.38 and Hong Kong 2.34.

Australia was deemed the least vulnerable to external risks with a score of 2.26, which is benchmarked against a grade of 1.51 for the United States.

"One of the more interesting features of our survey is how little expatriates in China worried about external risks. China is so large and, in many ways, so self-contained that they do not think the country faces many outside military threats," PERC said.

China's chink in its armour lies in economic ties with the United States, as it needs the giant US market to underpin its economic growth, the report added.

There is much greater awareness of Singapore's vulnerability to external threats after the September 11 terrorist attacks in the United States, especially after the detention of 13 suspected Islamic militants in the city-state, PERC said.

"Singapore's actual external risks are probably higher than expatriates working in the country indicated in our survey," it noted.

Vietnam has been relatively unaffected by the war against terrorism, but still faces a "serious external threat" from neighbour China with which it shares land borders.

Thailand's situation is "better than in most of Southeast Asia," PERC said, noting it was surprised that expatriates graded the country's exposure to external threat "harshly".

With US military forces in the Philippines limited only to training and advice, Washington risked getting bogged down in the campaign against the Abu Sayyaf kidnap group in the southern island of Basilan.

US military presence could also prompt Islamic militant groups abroad to increase financial and other aid to their local allies who could target the American soldiers, leading to an escalation of the conflict, it warned.

Manila's move to seek American help and a possible offer by Singapore to provide increased logistical support to US forces could put into question the neutrality policy of the Association of Southeast Asian Nations (ASEAN), PERC said. 

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