China’s Belt and Road Initiative

Hello Doston!!

Today’s article is concerned with a Geo-Political topic  which is currently a buzz in world of diplomacy. Its a bit lengthy as compared  to my general write ups, but the gravity of the subject prompted me to write long. Hope you would enjoy reading.

In past quarter century, if one thing which has  caught the imagination of the world, it would surely be the phenomenal rise of China. For almost 30 years double digit growth, China’s incremental jump in the economic dimension has reshaped the world order and now we are moving towards a multi-polar world, where America or Russia is not the sole dominant power.

With the rise of China comes its desire to influence the world order. There are several tools to influence it. Such as by showing technological advancement, increasing the influence on other countries, by enhancing the infrastructural aspects, by increasing trade with other nations etc. So in 2013, its president came up with an ambitious project called One Belt One Road (OBOR) initiative, which China claims that it is one of the most ambitious project of 21st century and it is having potential to reshape the world.

Recently China has organized a summit called Belt and Road Initiative(BRI), in which high level participants from more than 120 countries arrived, including nearly 30 head of the states. India was a conspicuous absentee, even though China, on multiple occasions, requested India to be a participant of this initiative. Since we are witnessing a potential watershed event in the world history, hence I thought of bringing some details about it.

What is Belt and Road Initiative?

This initiative is brought to fore by Chinese President Xi Jinping in 2013. From the inspiration of Old Silk Route, Belt and Road Initiative or One Belt One Road initiative is a connectivity project which aims to connect  mainland China to the parts of Asia, Europe and some parts of Africa as well. There are 60 countries through which this project will run. China is willing to finance these infrastructural project as a loan to the host nation. Once these areas will be connected, a whole new wave of globalization can emerge. It will have a positive impact on trade, commerce, integration of economy, cultural connectivity, integration of the least connected area, increasing the living standards of millions etc.

BRI
Red Line Indicates the Land Connectivity, where as Blue Line Indicates Maritime connectivity. Image Credit: Internet

 

This initiative is having two limbs; one is connecting the Land Area through rail and road and the other is maritime connectivity by building ports and supplementary infrastructures.

Land connectivity scheme is known as Silk Road Economic Belt and Maritime connectivity project is known as 21st Century Maritime Silk Road.

Plausible intentions of China Behind this project:

  1. By implementing this, China will emerge as a dominant player in the world order as this project will cover the 63% of the world population, 30% of the current world GDP, and 35% of the trade happens in these area.
  2. China has vast cash reserve in Renminbi (Chinese currency) which is equivalent to US $ 21 trillion approx twice its GDP. So by financing these infrastructural projects these cash deposits, which is presently lying ideal, can bring revenues through interests. It will also help in internationalization of its currency.
  3. China is having strategic leverage over manufacturing sector, so by integrating the Eurasian regions it will enhance its market where it can sell its product.
  4. It can win few allies, which it lacks as compare to its rival US by financing infrastructure.
  5. It will have a strategic and military advantage as compare to US, which also sees these regions very significant in terms of Geo Politics.
  6. It will help China to bring its least developed Western Provinces in direct contact with the other nations through infrastructure, which in turn, will benefit its balanced regional growth.

India did not take part in this initiative, which is criticized by many both at home and in China. They argue, India which is struggling in infrastructures should have embraced Chinese proposal as it will help via financing. By remaining out India is secluding itself from the new world order which is emerging. It will have a deleterious impact in the  to its economy in long term. The Indian subcontinent which is least integrated can get an impetus from the Chinese sponsored scheme and will be win-win situation for all.

However, Indian government firmly articulated its reservations to this project.

India’s concerns:

  • Infringing Sovereignty: One part of the project, China Pakistan Economic Corridor, passes through Gilgit Baltistan, which lies in Pakistan Occupied Kashmir, amd claimed by India. Since it is a disputed region and China did not had a deliberations with India with this respect, India thinks it as a infringement on its sovereignty.
  • Since the details of the project are not in the public domain, India is skeptic about it.
  • India does not see it as a mere economic initiative, as nearly 30,000 security personnel will be deployed to protect the infrastructure. Hence it sees a threat to its security.
  • India sees the high interest rates to finance the project as a Chinese “web trap”.
  • Along with this the assessment of project cost is not transparent, in the absence of transparency India is unwilling to be a part of this project.
  • China recently has behaved as an obstructionists in two cases which was concerned with India one in NSG and other in declaring Jash-e-Mohamed leader Mashod Azhar as a terrorists. So India gave the Chinese the taste of its own medicine. And gave a strong signal that India is not going to be an easy ride if its concerned is ignored.

Conclusion: In my view India rightly opted out from the Belt and Road Initiative as infringement upon sovereignty is a very serious concern. Along with this the benefit which China tries to put is not as clear as of the investment. But India should work in the field of regional connectivity firstly by focusing on its internal infrastructure and then after the infrastructure of the South East region.

 

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16 thoughts on “China’s Belt and Road Initiative

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  1. I think BRI and OBOR are good initiatives. But it is heavily tilted in favor of China. Chinese banks will pour money. They will also recover money. In case of a default Chinese business will take control over investment. Chinese army will ensure that. Most far eastern powers love to work with their own team of people. So employment gain will be for China. RW material will be Chinese. So everything is designed to Kickstart Chinese economy that is showing sign of slowing down. For India, CPEC is important. Hauling oil by road from Gwador to Xinjiang does not make economic sense under normal condition. For the project that to be successful some element of Indian participation is imperative. Because India has a bigger market. Indian must use this leverage to drive a hard begin.

    Liked by 2 people

    1. Very well summarized Sir! It’s an old saying that trade is the tool of colonialism. I am always being skeptic to the Chinese narratives and my skepticism is substantiated when The Dawn, a Pak newspaper, leaked the detailed motive behind the project. In my view India has done well to give a clear message to China. After that EU has also backed off. Recently heard some narrative that with the help of US India is also mulling is this direction.

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      1. Actual condition of the agreement is not disclosed in Pakistani public domain. What has come out is a leaked document. I read projects are gold plated to benefit Pakistani generals and important politicians. Even chief of Pakistani central bank is not privy to the document. As per people who are knowledgeable, Pakistan may have to pay almost 70% of its GDP as interest. Chinese have done the same in Africa and Sri Lanka. Hambantota port Sri Lanka is being forced to sell to a Chinese company. Due to public pressure government is not able to do so. In their blind hatred for India, Pak army generals have signed this agreement with China which may have long term consequence. On the brighter side, China may dismantle terrorist factory in Pakistan to protect her own interest. This may be good for India.

        Liked by 1 person

    2. And one more thing to add, its not just the Chinese Bank, but multilateral banks such as AIIB, of which India is thr the second largest shareholder, is also financing the project.

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      1. India is relatively more pragmatic. China is putting pressure on India to join. Because of Indian market. With our high unemployment, if we sign agreement on infrastructure development with China, our workers may not get job. Because Chinese do not tolerate dissent. Chinese managers do not speak good English. Chinese think Indian workers are inefficient and ill trained. I also read, China is encouraging loan from Chinese financial institutions. So it will be good for China.

        Liked by 1 person

  2. Informative post.Thanks for sharing.
    I am glad that India did not join this initiative on account of security and sovereignty reasons.Moreover China although has raised plans for taking loans yet still it is unclear about debt redemption and the heavy burden that would be created on the member nations joining in.

    Liked by 1 person

  3. very nice post . China has long history of belligerence towards India and in my view India has rightly kept away from the crowd. China intends to further its designs of expansionism and thus exert influence on Asian countries.
    REGARDS

    BRIJ KAUL

    Like

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