[Burning Issue] Belt and Road Initiative

What is Belt and Road Initiative?

  1. The Belt and Road Initiative is a Chinese foreign policy initiative launched by President Xi Jinping in 2013.
  2. It consists of two projects named Silk Road Economic Belt (SREB) and Maritime Silk Road (MSR).
  3. The objective is to build a trade, investment, and infrastructure network linking Asia with Europe and Africa along the ancient trade routes.
  4. China has incorporated Belt and Road Initiative into its constitution.

The significance of BRI for China

  1. It makes China an important maritime power in the South China Sea and the Indian Ocean and its littoral countries.
  2. It promotes China-led financial institutions such as the Asian Infrastructure Investment Bank (AIIB).
  3. Development of Western Provinces:  It will develop poorer western provinces of China, particularly Xinjiang. Xinjiang has had ethnic tensions and is considered to be a vulnerable area for China. The Chinese government made Xinjiang Uighur Autonomous Region as ‘Core zone of Silk Road Economic belt’. The government has been providing incentives to attract manufacturers and real estate developers.
  4. Transportation links provide better access to rich European markets and boost trade.
  5. Creation of an energy route between the Middle East and Africa will act as a safety valve against any possible prohibition at points like Hormuz and the Malacca Strait.
  6. Development of railways, ports, pipelines, and highways across Asia and the Indian Ocean will help China utilize its excess capacity in steel, cement, and infrastructural engineering. This will result in the development of its manufacturing sector further.
  7. It will enable China to compete with Transatlantic Trade and Investment Partnership (TTIP) and Trans-Pacific Partnership (TPP) or any other future mechanisms that aim at establishing new trading norms.

Challenges to BRI

  • Poor governance and instability in Countries along BRI
  1. The varying levels of development and the poor governance conditions of countries along the BRI may hinder infrastructure development, trade, and investment.
  2. Furthermore, the political instability in a growing number of countries such as Yemen, Syria etc. along BRI poses serious security concerns for BRI
  • Separatist movements and Ethnic Tensions
  1. Separatist movements and ethnic tensions especially in Xinjiang proves to be a major challenge for the development of BRI and its linking with neighbouring countries.
  • Cooperation from neighboring countries:
  1. China has raised several sovereignty-related disputes with neighbouring countries including India which makes them not cooperate with the development of BRI.
  2. Moreover, the Potential ecological and environmental consequences, especially in developing countries along the BRI, renders the project undesirable for many countries including India.
  • Transparency issues in tenders and deal conditions
  1. There are many instances of countries such as Nepal and Pakistan abandoning the deal with China to build the infrastructure project because of the closed tender process and strict deal conditions.

India’s stance

  1. India has opposed the BRI and did not attend the 2017 BRI Summit held in Beijing.
  2. It mentioned issues of sovereignty, transparency and unilateral decision making.

Why is India reluctant in joining the initiative?

China-Pakistan Economic Corridor (CPEC)

  1. CPEC is a flagship programme of the BRI and the main reason for India opposition to the initiative.
  2. It is because CPEC passes through Pakistan-Occupied Kashmir (Gilgit-Baltistan) which is a disputed territory between India and Pakistan.
  3. Thus CPEC undermines India’s strategic interests and territorial integrity.
  4. More importantly, with CPEC, China will get access to the western Indian Ocean through Gwadar port. This will help China in controlling maritime trade and would affect the freedom of navigation and trade-energy security of India.

Unilateral Decision

  1. India has alleged that China has taken unilateral decisions. There has been a lack of consultations with India before the launch of BRI.

Concern over China’s expanding presence in neighbouring countries and the Indian Ocean

  1. China’s port development projects in the Indian Ocean raises security concerns for India.
  2. Increasing Chinese presence in Nepal, Pakistan, Sri Lanka, and Myanmar has raised concerns for India. For India, BRI seems driven by large geopolitical aims.

Transparency issues

  1. India has highlighted the importance of openness and transparency
  2. According to India, mutual agreements on infrastructure projects should be transparent and debt repayments should be made easier for recipient countries

Why should India join BRI?

  1. Economic benefits, Boost to trade, investment, and business engagement
  2. It provides direct access to Afghanistan and Central Asia
  3. Energy: BRI is expected to normalize India-Pakistan ties. This would remove the obstacles to the implementation of two major energy cooperation projects: the Iran-Pakistan-India gas pipeline and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. This is crucial for India’s energy security.
  4. Improve Indo-China ties; India and China may cooperate at many global fronts.
  5. Security: Development in Gilgit- Baltistan area would help to curb security threats
  6. All neighbouring countries (except Bhutan) and other countries from South-East Asia, Central Asia has joined BRI. Thus, not joining BRI may lead to the isolation of India
  7. Many geopolitical issues and differences can be resolved through economic integration.

Way forward

  1. More than 65 countries- nearly every country in Asia (except few like Bhutan, Japan), East and Central Europe have joined BRI
  2. BRI is particularly significant in times of rising protectionism across the world.
  3. The success of BRI largely depends on how China manages its debt since 23 countries that joined BRI are in debt distress.
  4. More importantly, the regional cooperation and political stability in countries along BRI is crucial for BRI’s success

Practice questions

  1. Give a brief account of Belt and Road initiative and its significance for China vis-à-vis India. Also, identify the key challenges in the implementation of BRI.
  2. Do you think that it is in the best interest for India to join the Belt and Road initiative? Critically analyse.
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