OBOR Initiative

Status of China’s Belt and Road Initiative in South Asia

Note4Students

From UPSC perspective, the following things are important :

Prelims level : BRI

Mains level : Chinese BRI and its progress

China has felt a need to re-visit the various projects under the BRI in different South Asian countries.

Why in news?

  • At the recently concluded summit of G-7 leaders in Germany, US and his allies unveiled their $600 billion plan called the Partnership for Global Infrastructure and Intelligence.
  • This is being seen as a counter to China’s Belt and Road Initiative (BRI), valued at a trillion U.S. dollars by some experts.

What is China’s Belt and Road Initiative?

  • In 2013, Chinese President Xi Jinping, during his visits to Kazakhstan and Indonesia, expressed his vision to build a Silk Road Economic Belt and a 21st Century Maritime Silk Road.
  • He then aimed to break the “bottleneck” in Asian connectivity. This vision led to the birth of the BRI.
  • The initiative envisioned a Chinese-led investment of over $1 trillion in partner countries by 2025.
  • More than 60 countries have now joined BRI agreements with China, with infrastructure projects under the initiative being planned or under construction in Asia, Africa, Europe, and Latin America.

How does BRI work?

  • To finance BRI projects, China offers huge loans at commercial interest rates that countries have to pay within a fixed number of years.
  • The west has accused China of debt-trapping by extending “predatory loans” that force countries to cede key assets to China.
  • However, research indicates that low and middle-income countries are often the ones to approach China after not being able to secure loans from elsewhere.
  • In recent years, the BRI seems to have experienced a slowing down as annual Chinese lending to countries slimmed from its peak of $125 billion in 2015 to around $50 to 55 billion in 2021.

What have been the BRI’s investments in Pakistan?

  • On his 2015 visit to Pakistan, Xi unveiled the BRI’s flagship project and its biggest one in a single country — the China Pakistan Economic Corridor (CPEC).
  • The CPEC envisioned multiple projects involving energy, transport and communication systems.
  • At the centre of the CPEC was the $700 million development of the city of Gwadar into a smart port city that would become the “Singapore of Pakistan”.
  • Other major projects are the orange line metro, coal power plants to tackle energy shortages and the Main Line 1 rail project from Peshawar to Karachi.

Pace of progress in Pakistan

  • Multiple reports have shown that shipping activities at the Gwadar Port is almost negligible so far, with only some trade to Afghanistan.
  • Gwadar residents have also protested against the large security force deployed to protect Chinese nationals involved in projects.
  • Chinese nations has also became the target of multiple deadly attacks by Baloch freedom fighters.
  • Coal plants were set up and managed by Chinese firms to improve the power situation in Pakistan.
  • Chinese power firms closing down their operations as the latter did not pay dues worth 300 billion in Pakistani rupees (approximately $1.5 billion).

What about Sri Lanka?

  • In Sri Lanka, multiple infrastructure projects that were being financed by China came under the fold of the BRI after it was launched in 2013.
  • In 2021, Colombo ejected India and Japan out of a deal to develop the East Container Terminal at the Colombo port and got China to take up the project.
  • Some BRI projects in Sri Lanka have been described as white elephants — such as the Hambantota port.
  • The port had always been secondary to the busy Colombo port until the latter ran out of capacity.
  • Other key projects under BRI include the development of the Colombo International Container Terminal, the Central Expressway and the Hambantota International Airport among others.

Projects in Afghanistan

  • Afghanistan has not comprehensively been brought into the BRI, despite a MoU being signed with China in 2016.
  • China had promised investments worth $100 million in Afghanistan which is small in comparison to what it shelled out in other South Asian countries.
  • The projects have not materialised so far and uncertainties have deepened after the Taliban takeover last year.

Projects in Maldives

  • Situated in the middle of the Indian Ocean, Maldives comprises two hundred islands, and both India and China have strategic interests there.
  • One of the most prominent BRI projects undertaken in the Maldives is the two km long China-Maldives Friendship Bridge — a $200 million four lane bridge.
  • Most of China’s investment in the Maldives happened under former President Abdullah Yameen, seen as pro-China.

Projects in Bangladesh

  • Bangladesh, which joined the BRI in 2016, has been promised the second-highest investment (about $40 billion) in South Asia after Pakistan.
  • It has been able to benefit from the BRI while maintaining diplomatic and strategic ties with both India and China.
  • It has managed to not upset India by getting India to build infrastructure projects similar to BRI in the country.
  • BRI projects include Friendship Bridges, special economic zones, the $689.35 million-Karnaphuli River tunnel project, upgradation of the Chittagong port, and a rail line between the port and China’s Yunnan province.
  • However, multiple projects have been delayed owing to the slow release of funds by China.

 

 

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