One Belt One Road

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Facts:
  • Iran linked to China via train (29/01/2016)
 
What is OBOR?
The ‘One Belt’ and ‘One Road’ refer to China’s proposed ‘Silk Road Economic Belt’ and ‘Maritime Silk Road’.
Connectivity covers five major areas of interest: policy coordination, infrastructure construction (including railways and highways), unimpeded trade, financial integration and people-to-people ties. Among these, infrastructure construction is the dominant feature of the New Silk Road.
 
The essence of OBOR is to promote regional and cross-continental connectivity between China and Eurasia. It represents the first major attempt by China to design and implement a cross-continental mercantile strategy and will surely have significant global and geopolitical consequences
 
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Why should India join OBOR?
India should join OBOR:
  • Pakistan may use India’s absence against us
  • Pakistan providing route to Indian Ocean
  • India’s masterstroke: provide alternate route to BoB and Indian Ocean through India. Will also lead to investment and an insurance against China’s misadventure in future.
  • India extended fast security clearances for Chinese investments in the country.
  • Push for greater cooperation from China on counter-terrorism, including pressuring Pakistan to act on LeT
 
What’s China’s strategy?
  • South Asia is the least integrated region in the world, and that is not in line with global trends. The new initiative aims to integrate the region.
  • The Initiative, seen more as a policy indicator than a set of projects, will link three continents – Asia, Europe and Africa.
  • China has cash and deposits in Renminbi equivalent to USD 21 trillion, or two times its GDP, and expects that the massive overseas investment in the OROB will speed-up the internationalization of the Renminbi.
  • It is also seen as a strategic response to the military ‘re-balancing’ of the United States to Asia.
 
 

What is India’s and West’s stance on OBOR?
  • 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
  • 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)
  • 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
 
Critically examine the objectives and reasons behind the proposal of creating a “One-Belt-One-Road” (OBOR) project by the Chinese despite already having cheap and reliable trade routes in the oceans. Should India join hands with China in this initiative? Examine the costs and benefits of such a move. (200 Words)
 
The One-Belt-One-Road (OBOR) project by China consists of two elements.
  1. Silk Road Economic Belt (SERB), which aims to establish a Eurasian land corridor extending from the Pacific coast to the Baltic Sea.
  1. And a 21st century Maritime Silk Road (MSR) which aims to develop ports across the Indian Ocean.
 
Analysts believe that the OBOR initiative will impact 4.4 billion people and has the potential to generate USD 2.5 trillion in 10 years.
 
Reasons behind OBOR Initiative
  1. Vast Forex Reserves – China has forex reserves exceeding USD 3 Trillion. It is now trying to utilize them for fuelling economic growth.
  1. China is trying to leverage its economic strength to emerge as the next superpower. The OBOR initiative will help China to reach out to a lot of countries and integrate their economies with its own.
  2. China is also trying to diversify its trade routes. As excessive dependence on a single route is a strategic vulnerability.
  3. Safer, economical and faster alternative medium of connectivity to oil rich Central and West Asia besides connecting European markets for its finished goods.
  4. It’s considered as China’s response to U.S’s Pivot to Asia re-balancing act (strategic counter) and TPP (economic counter).
  5. It will help China emerge as a global power in a multi polar world by influencing/inviting countries to join this initiative
  6. It will also help China in using its industries’ excess capacities especially in the wake of a global slowdown and have its influence in strategically important and U.S dominated Indian Ocean waters.
  7. Will improving connectivity between its underdeveloped southern and western provinces, its richer coast, and the countries along its periphery
 
The OBOR initiative has specific risks and opportunities for India. India needs to particularly study these before committing to any course of action as it can have grave strategic consequences.
  1. The west, particularly the US is banking on India to counter a growing China with their pivot to Asia. In case, India accepts the OBOR initiative, it might lose its strategic autonomy.
  2. While India cannot compete with China economically, it has cultural as well as reputational advantages over China. Thus, a similar initiative by India dubbed Project Mausam could suffer if India were to join hands with China.
  3. A stronger China is a strategic risk for India given the fact India has 4078 km of disputed border with China and China claims a large portion of Indian territory (nearly 80,000 sq km).
  4. But, India isn’t included in the US-led Trans-Pacific Strategic Economic Partnership and the Transatlantic Trade and Investment Partnership, leaving the ambitious nation feeling marginalized on the world economic stage. Consequently, joining “One Belt and One Road” constitutes a helpful alternative
  5. India can be benefited by having better connectivity to landlocked oil rich Central Asia for its energy needs. Also, it can be used by India to improve its infrastructure significantly. This initiative can also be seen by India as an alternative to TPP.
 
Having said that, India shall need to ensure that its strategic maritime interests in Indian Ocean are not compromised by Chinese presence. Also, given long festering boundary issue with China and its recent CPEC initiative in PoK despite India’s reservations make it a fit case for closer scrutiny by India before taking a final decision.
 
 
Critically analyse how the Belt and the Road project of China benefits India. (200 Words)
 
China has proposed the Belt and Road initiative and enough progress has been taken on the project so far. The project is a foreign policy initiative with economic, geopolitical and strategic implications. The project aims to reinvigorate the old silk route of China connecting its eastern coast to Europe, Africa and South Asia. It aims to do this through both land and sea route by enhancing road connectivity and building ports in different countries.
 
According to China, India is also a key part in this initiative. But India so far has not made any commitment or taken part. An analysis of the benefits of this project to India are :
  1. Economic – The project will enhance India’s connectivity with other countries especially Central Asia through China since the Pakistan route is not available for now. Connectivity to Russia and Eurasia and even Europe can also be achieved. Better connectivity increases trade and people to people movement and ties. Something which is at a nascent stage with these nations now. India could even use Chinese ports in Africa and South East Asia to enhance its relations with these nations and trade. Since India is looking to diversify its trade and improve its export potential, this could favour India and help our  Make in India initiative.
  1. Political – Better economic relations improves political relocations and mutual trust. Being part of the initiative will improve India – China relations and also with Central Asian nations predominantly.
  2. Strategic – Pakistan and China relations are on a high since the China Pakistan economic corridor being launched. India through this project can retain the balance of power in South Asia.
 
These benefits though come with the risk of opening up the economy to China which is inimical to our domestic manufacturing through dumping of Chinese goods. Moreover, the security angle of China gaining access to Indian Ocean has security implications. Relations with USA may get hampered. These disadvantages must be considered before joining the project. The government has taken the right approach of waiting and watching Chinese moves before taking any decision.
 
 
Do you think both Asian Infrastructure Investment Bank and “Belt and Road” projects of China are complimentary? Substantiate and examine the implications for the Asian region of both these projects. (200 Words)
 
AIIB or Asian Infrastructure and Investment Bank was originally conceived by china as a multilateral institution for financing the infrastructure needs of the Asian region. The AoA has been signed by 50 countries including India and 7 more are supposed to sign by year end.
 
‘Belt and road’ initiative is again the Chinese conception of modern version of the historical silk route, that once existed between China and Europe. Under this initiative china will be building a maritime link and a road link with Europe, Africa and Asian countries.
 
The financing needs for infrastructure like road construction and ports construction, customs clearance houses etc. will be invariably financed from institutions like AIIB and NDB (Brics Bank).
 
Thus the 2 projects are complementary to each other. However there are certain differences and contradictions:
  1. AIIB seems more benign whereas countries are wary of B&R. Example being India.
  2. AIIB seeks to involve other stakeholders whereas B&R is implementation of Chinese plans
 
Positive implications for Asia:
  1. The infrastructure needs of the region will get adequate funding.
  2. The region will be less dependent on European and American markets.
  3. This will put pressure on the troika of WB, IMF and ADB to be more efficient in its lending priorities.
  4. With initiatives of road corridors like Kolkata to Kunming initiatives, the positive economic effects of the belt might help develop the erstwhile underdeveloped regions and thus put an end to militancy, terrorism in countries like Myanmar and Pakistan.
 
Negative implications for Asia
  1. Though promised to be more democratic and transparent in its initiatives, almost one third shareholder in still china. Possibility of arm twisting by china in future cannot be ruled out.
  2. Substantial Chinese presence in countries of Asia, while executing the projects in these countries, may alter the geopolitical landscape of the region.
  3. Cheap and subsidised Chinese product may flood the region, as china is already having excess industrial capacity, thus giving final blow to the indigenous industries of the region.
 
 
 
Critically analyse the objectives and intent of the Chinese Silk Road Economic Belt project and its implications for India. (200 Words)
 
The “Silk Road Economic Belt” is a Chinese initiative to integrate economies of Asia and Europe along the Eurasian corridor with Chinese economy; through the development of transport infrastructure and communication networks involving railways, roads & fiber optics highways that would connect South Asia, South East Asia, Central Asia and Europe along an integrated land corridor.
Intent:
 
  1. Realize Chinese aspirations of playing an enhanced role at regional and global levels.
  2. First step towards establishing Chinese hegemony at regional and global levels; instead of US $ or Euro, the local currencies & Renminbi to be dominant means of economic deals.
Objectives:
 
  1. Development: of Chinese hinterland particularly Xinjiang province which is seeing a lot of ethnic violence arising out of social problems like poverty, unemployment, backwardness etc.
  2. Economic Growth: Enhanced connectivity will boost China’s trade with entire Eurasian continent; Chinese overcapacity in construction materials will be utilized; efficiency improves.
  3. Enhanced Regional & Global clout: China hopes to gain closer cultural and political ties with countries along the silk Road.
  4. Counter US: Policy of “Pivot of Asia” and its trans-pacific partnership agreement which try to contain China and consolidate American hegemony.
  5. Soft Power: Showcase a softer side of China & gain an upper hand over regional powers such as India & Japan.
Implications for India:
 
Security:
  1. Chinese influence in Indian neighbors such as Nepal, Bhutan may increase.
  2. Encircling India via land corridor just like string of pearls in Indian Ocean.

Political:
  1. India’s clout at regional level might be reduced.

Economic: if India participates in the initiative then
  1. Its trade might be boosted with Eurasian economies.
  2. China may fund infrastructure development in India too.

Conclusion: The need for India is to balance security concerns with economic benefits to be derived; particularly in the context of Chinese assertiveness.
 
 
Discuss if the China’s Road and Belt project has the potential to improve relationship of India with Tibet Autonomous Region and Pakistan. (200 Words)
 
The China’s Road and Belt project will possibly have mixed effects on the relationship of India with the Tibet Autonomous Region and Pakistan as summarized below:-
 
With respect to Tibet Autonomous region :-
  1. The proposed extension of Lhasa-Shigatse rail link to Yadong and then to Sikkim through Nathu La Pass which connects Tibet with Sikkim, would boost the high potential tourism industry , bring investment and trade connectivity, between India’s north east regions and China. Would improve the poor states of infrastructure and connectivity in the regions.
  2. The extensions of the Lhasa-Shigatse rail link to Kathmandu and then to Bihar would not only boost the Buddhist tourism to sacred sites of Bodh Gaya but also give impetus to the trans-national trade in the region along with deep cultural and people to people contacts.
 
With respect to the Gwadar-Kashgar economic corridor between Pakistan and China:-
  1. Since the proposed corridor passes through the disputed territory of Pakistan occupied Kashmir, it is no way acceptable to India from any perspective. Construction of any infrastructure and transport linkages in seriously disputed territory based on bilateral cooperation would mean disregard to the India territorial boundary and interference on its sovereignty.
  2. The corridor possesses deep security threat to India too. In the event of confrontations with Pakistan or two front wars with Pakistan and China, the corridor would facilitate close military cooperation, movement of forces and exchange or transfer of military aids and equipment between the two countries ,which would put India in a serious disadvantaged position militarily .
 
Thus, as a part of a China’s Road and Belt Project , the rail connectivity between the Tibetan Autonomous Region and India’s north east and eastern state of Bihar through Kathmandu will give big boost to the trade and tourism while the same can’t be said in case of economic corridor between Pakistan and China passing through PoK
 
 
Why is China‘s Silk Route project compared to the Marshall Plan of post Second World War? Critically examine. (200 Words)
 
Marshall plan by US was made to attain its foreign policy objectives in the suit of economic interest which later on helped US in rising as global power, similarly, china’s silk route plans are considered to be aimed at attaining its agenda to become global power while fulfilling its domestic economic needs.
The reasons of this similarity can be pinned to following points:
  1. Both plans aims at exporting their country‘s capital, technology, and capacity to others who need them badly.
  2. Both plans aimed at pursuing strategic plans in the mask of aids.
  3. Both plans created doubts of interest and security apprehensions for some nation, as in this case India has fear of being overshadowed by it.
  4. Both the plans were formed while being economically superfluous to master over other nations.
Arguments which support that china’s initiative isn’t a marshal plan are:
  1. Unlike the Marshall Plan, which excluded communist countries, China‘s ―one belt, one road‖initiative is open to all countries who are interested in development, regardless of their regime types.
  2. While implementing Marshall Plan US already had a global hegemony whereas china is still a developing nation facing many challenges and distrust.
  3. China’s “one belt, one road“ initiative is far more ambitious than the Marshall Plan.
China‘s initiative aims at the whole world, and thus could have a greater global impact whereas US aimed only at European region under marshal plan.

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