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The dragon beckons – OPINION – The Hindu

http://www.thehindu.com/todays-paper/tp-opinion/the-dragon-beckons/article18380273.ece

    • India should ask China if it’s willing to address its concerns so as to enable participation at the BRI meet
    • United Nations Security Council adopted a resolution on security in Afghanistan. It includes a reference to regional development initiatives such as China’s Belt and Road Initiative (BRI).
    • China promptly announced that this reference (possibly inserted at its instance) reflected a global consensus on the BRI.
    • This is part of an intensifying campaign to mobilise high-level attendance at a summit — the Belt and Road Forum for International Cooperation (BRF) — being hosted by China in mid-May

  • The grand design

    • The Silk Road Economic Belt includes land corridors from China through Central Asia and Russia to Europe with spurs to West Asia and to Pakistan — the China-Pakistan Economic Corridor (CPEC).
    • The 21st century Maritime Silk Road links China’s east coast through major sea lanes to Europe in the west and the Pacific in the east.
    • Among Chinese objectives of the BRI are finding outlets for excess capacity of its manufacturing and construction industries, increasing economic activity in its relatively underdeveloped western region, and creating alternative energy supply routes to the choke points of the Straits of Hormuz and Malacca, through which almost all of China’s maritime oil imports pass.
    • The political subtext is strengthening China’s influence over swathes of Asia and Africa, buttressing its ambitions to be a maritime power, and developing financing structures parallel to (and eventually competing with) the Bretton Woods system.
    • It is a rich mix of economic, developmental, strategic and geopolitical motives. It is also the most ambitious global infrastructure project ever envisaged by one country.

  • Analysts have highlighted a number of potential issues:

  1. Chinese overcapacity may override host countries’ development priorities in project selection;
  2. political tensions between countries may prevail over considerations of economic benefit;
  3. local elites may corner the “spoils” from new projects, thereby exacerbating social tensions
  4. financing strategies may result in countries sleepwalking into a debt trap (the Hambantota development projects in Sri Lanka provide a telling example)

  • India and the mid-May meet

      • Officially, India says it cannot endorse the BRI in its present form, since it includes the CPEC, which runs through Indian territory under illegal Pakistani occupation (Gilgit-Baltistan).
      • Some analysts have argued for the more “pragmatic” approach of a partial endorsement: as the initiative rolls out in various countries, India can engage with them (and with China) to promote projects that would be of benefit.
      • China’s argument, that India would be “isolating” itself by staying out, is a pressure tactic: roads, ports and railways are public goods, which cannot be open to some and closed to others, based on nationality.

  • Scope for give and take

  • India should ask China whether it is willing to address its concerns in such a way as to enable high-level Indian participation.
  • The sovereignty issue needs to be addressed.
  • Chinese diplomat was more explicit, drawing attention to Article 6 of the 1963 China-Pakistan “boundary” agreement (in which Pakistan ceded the “Trans-Karakoram tract” to China), wherein the two sides agreed that after the J&K issue is resolved, China would renegotiate the boundary with the relevant sovereign country.
  • China argues that connectivity provided by the BRI would enhance economic cooperation and promote peace. Will it walk its altruistic talk and include the existing land corridor from India to Afghanistan, through Pakistan, in the BRI?
  • This corridor would intersect the CPEC and may therefore open new routes for Chinese goods to both India and Afghanistan, besides promoting India, Pakistan and Afghanistan trade. With its investment in the CPEC now estimated at over $60 billion, its increasing bilateral assistance to Pakistan and its growing military presence in that country, China is in a strong position to persuade Pakistan to recognise that this is in its best economic interest: it may even transform the CPEC into a commercially viable project.
  • The short point is that the strong Chinese interest for a high-level Indian presence at the BRF may provide New Delhi the opportunity to extract something of commensurate value in return.