OBOR Initiative

OBOR Initiative

Chancay Port Project in Peru

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Chancay Port Project, OBOR

Why in the News?

The Chancay Port was inaugurated in Peru by Chinese President Xi Jinping.

About Chancay Port Project:

  • The Chancay Port Project was inaugurated in Peru as part of a new land-sea corridor linking China with Latin America.
  • It is funded under Belt and Road Initiative (BRI), with a total cost of $3.6 billion.
  • The port can accommodate vessels up to 18,000 TEUs (twenty-foot equivalent unit), the largest shipping vessels in the world.
  • Ownership: 60% of the port is owned by China Ocean Shipping (Group) Company (COSCO), with the remaining stake held by a local company.
  • It is expected to generate $4.5 billion annually for Peru, equivalent to 1.8% of the country’s GDP.
  • Key Exports: The port will handle exports like copper, blueberries, soybeans, and lithium from the lithium triangle (Bolivia, Chile, and Argentina).

Geo-strategic Location:

  • Proximity to Lima: Located 78 km north of Lima, Peru’s capital, in the small fishing town of Chancay.
  • Natural Deep-Water Port: Chancay is a natural deep-water port, ideal for accommodating large vessels.
  • Trade Gateway: Positioned strategically to facilitate trade between South America and Asia, reducing transit time for goods between the two continents.
  • Alternative to North America: It eliminates the need for Latin American exports to transit through ports in North America, offering a more direct route to Asia.

Why it is a concern for USA?

  • Chinese Influence in Latin America: The US has traditionally viewed Latin America as its sphere of influence. The Chancay Port increases China’s economic and geopolitical presence in the region.
  • Strategic Gateway for China: The port strengthens China’s access to critical resources in South America, including lithium and copper, raising concerns about China’s growing dominance in the region.
  • US Trade Routes Disruption: The port reduces transportation time between Latin America and Asia, which could disrupt existing US trade routes and diminish its role as a trade facilitator.

PYQ:

[2017] What is the importance of developing Chabahar Port by India?

(a) India’s trade with African countries will enormously increase.

(b) India’s relations with oil-producing Arab countries will be strengthened.

(c) India will not depend on Pakistan for access to Afghanistan and Central Asia.

(d) Pakistan will facilitate and protect the installation of a gas pipeline between Iraq and India.

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OBOR Initiative

China’s ‘Anaconda Strategy’

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Anaconda Strategy

Why in the News?

Taiwanese authorities recently stated that the People’s Liberation Army (PLA) is using an ‘anaconda strategy’ to put pressure on Taiwan.

China’s Military Maneuvers around Taiwan

  • China has been steadily increasing its military activities around Taiwan, both by air and sea:
  1. Air incursions into the Taiwan Strait have increased significantly, from 36 incursions in January to 193 in September.
  2. Chinese ships operating around Taiwan has also risen, from 142 in early 2024 to 282 by August.
  • These maneuvers seem designed to wear down Taiwan’s navy and air force, creating constant pressure.

What is the Anaconda Strategy?

  • The ‘anaconda strategy’ involves a combination of military tactics, psychological pressure, and cyber warfare.
  • The goal is to weaken Taiwan’s defenses and force the island into submission without the need for a full-scale invasion.
  • China’s approach is one of relentless pressure.
  • It is trying to tire out Taiwan and force it into making mistakes, which could then be used as a pretext to launch a blockade.
  • Its ultimate goal appears to be to make Taiwan vulnerable without resorting to direct military conflict, keeping Taiwan’s forces on the defensive.

Other Unconventional Strategies used by China:

  • Wolf Warrior Diplomacy: A confrontational and assertive style of diplomacy used by Chinese officials, characterized by aggressive rhetoric and nationalistic stances, often aimed at defending China’s interests and countering foreign criticism.
  • Gray-Zone Tactics: A set of covert strategies that fall between war and peace, including actions like cyberattacks, propaganda, and incremental territorial gains, aimed at advancing a nation’s goals without triggering a full-scale military conflict.
  • Salami Slicing: A strategy where small, incremental actions are taken over time to achieve a larger goal without triggering a strong reaction. It is often used to gain control or advantage bit by bit, avoiding immediate confrontation.

 

PYQ:

[2021] The US is facing an existential threat in the form of a China that is much more challenging than the erstwhile Soviet Union. Explain.

[2017] “China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia”. In the light of this statement, discuss its impact on India as her neighbour.

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OBOR Initiative

China-Vietnam red diplomacy 

Note4Students

From UPSC perspective, the following things are important :

Mains level: China; South China Sea; Vietnam's importance for India;

Why in the News?

Vietnamese President’s recent trip to China seeks to rekindle the historical ties and camaraderie between Mao Zedong and Ho Chi Minh, to strengthen political trust in their bilateral relationship strategically.

Current Diplomatic Relationship between China and Vietnam:

  • Revived Political Trust: Vietnamese President to Lam’s visit to China sought to revive the historical comradeship between Mao Zedong and Ho Chi Minh.
    • This visit aimed to strategically strengthen political trust and enhance the comprehensive strategic cooperative partnership between the two communist nations.
  • Joint Statement on Cooperation: Both countries reaffirmed their commitment to advancing socialism and expressed their desire to build a “Vietnam-China community with a shared future.”
  • Economic and Strategic Agreements: The visit resulted in 14 agreements covering areas such as connectivity, infrastructure, healthcare, and media.
    • Trade between the two nations remains robust, with China being Vietnam’s largest import market and a significant investor. Bilateral trade in 2023 reached $171.9 billion.

How do recent events reflect the complexities of Vietnam’s foreign policy towards China?

  • Bamboo Diplomacy: Vietnam’s foreign policy, known as “Bamboo Diplomacy,” is based on flexibility and resilience.
    • It aims to maintain strong ties with multiple global powers, including China, while also hedging its bets with the U.S., India, Russia, and Japan to counterbalance Chinese dominance.
  • Economic Dependence vs. Strategic Hedging: Vietnam’s growing economic interdependence with China, reflected in trade and investment, contrasts with its efforts to hedge against over-reliance by fostering ties with other global players. This balancing act illustrates Vietnam’s pragmatic approach to foreign policy.

Challenges Vietnam Faces in Maintaining Sovereignty Amid Growing Chinese Influence:

  • Territorial Disputes: The ongoing territorial contestation over the Paracel Islands in the South China Sea poses a significant challenge for Vietnam.
  • Economic Dependence: While Vietnam benefits from economic ties with China, the growing trade deficit and increased Chinese investments create a dependency that could challenge Vietnam’s autonomy in decision-making, especially in strategic areas like infrastructure and connectivity.
  • Strategic Hedging and Sovereignty: Vietnam’s efforts to hedge against Chinese influence through partnerships with the U.S., Japan, and India.

Note: Hedging refers to a strategic approach taken by a country to safeguard its interests and security in a complex and uncertain environment.

Way forward:

  • Enhance Bilateral Engagement: India should deepen its strategic partnership with Vietnam through increased economic cooperation, cultural exchanges, and joint defense initiatives.
  • Support Regional Multilateralism: India should actively participate in regional forums and initiatives that promote multilateral cooperation, such as the Quad and ASEAN-led dialogues.

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OBOR Initiative

Dealings at a China-Africa forum that India must track

Note4Students

From UPSC perspective, the following things are important :

Prelims level: China-Africa Cooperation (FOCAC);

Mains level: India-Africa relation;

Why in the News?

The 9th edition of the Forum on China-Africa Cooperation (FOCAC) is scheduled to be held in Beijing from 4th to 6th September, 2024.

About the China-Africa Cooperation (FOCAC)

The Forum on China-Africa Cooperation (FOCAC) was established in 2000 to enhance the strategic partnership between China and African nations. It serves as a platform for collective dialogue and cooperation in various sectors, including trade, investment, and development.

Challenges of China-Africa Debt:

  • Chinese loans to African countries amounted to approximately $170 billion from 2000 to 2022. However, Chinese lenders represent only about 12% of Africa’s total public and private debt, indicating that China is not the primary creditor.
  • A significant portion of Chinese loans is not disclosed in sovereign debt records, complicating the understanding of Africa’s overall debt levels. This lack of transparency raises concerns about the sustainability of these debts.
  • Despite concerns over “debt trap diplomacy,” China is unlikely to forgive or cancel debts but may consider writing off smaller, interest-free loans.

African Priorities at FOCAC 2024

  • Economic Goals: African nations are focusing on enhancing trade relations with China, with a modest goal of $300 billion in imports from Africa between 2022-2024. As of mid-2024, trade has reached $167 billion, primarily dominated by raw materials.
  • Agricultural Development: There is a pressing need to develop a sustainable agricultural industry in Africa. This includes improving the processing of agricultural commodities and leveraging the expertise of countries like China and India to enhance crop resilience and productivity.
  • Green Energy and Industrialization: African countries are advocating for the establishment of refining and processing hubs to increase the value added from their raw materials.

What are the learnings that India can have?

  • Continuity in Engagement: India should emphasize consistent engagement with Africa, particularly by organizing the India-Africa Forum Summit (IAFS-IV) to capitalize on recent momentum, especially after the African Union’s inclusion in the G-20.
  • Support for Industrialization: Indian companies are encouraged to invest in higher value-added sectors in Africa, such as agriculture and pharmaceuticals, to foster local employment and market development.
  • Private Sector Participation: Greater involvement of the Indian private sector is essential, along with innovative financing solutions like public-private partnerships to support projects in Africa.
  • Digital and Financial Connectivity: Utilizing India’s digital stack and establishing rupee-based financial transactions can enhance connectivity and reduce forex risks for African nations.

Conclusion: India should deepen its strategic partnerships with African nations by expanding bilateral and multilateral engagements, focusing on key sectors like healthcare, digital infrastructure, and renewable energy. Leveraging India’s experience in these areas can help address African development needs while enhancing India’s influence on the continent.

Mains PYQ:

Q Increasing interest of India in Africa has its pros and cons. Critically Examine. (UPSC IAS/2015)

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OBOR Initiative

Niger struggles with Security, Economic Crises

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Niger, Niger Benin Export Pipeline

Why in the News?

  • The China-backed Niger-Benin Export Pipeline that would make Niger an oil-exporting country is being threatened by an internal security crisis and a diplomatic dispute with neighboring Benin.
    • These issues arose after last year’s coup that toppled Niger’s democratic government.

About Niger

  • Niger, located in West Africa, is a landlocked country known for its vast desert landscapes and significant cultural heritage.
  • The northern region of Niger is dominated by the Sahara Desert, comprising more than half of the country.
  • The central part of Niger is characterized by the Sahel, a semi-arid transition zone between the Sahara
  • The Aïr Mountains, located in the northern central part are a significant mountain range with the highest peak, Mont Idoukal-n-Taghès (2,022 m).
  • The Niger River is the country’s primary water source.
  • Lake Chad is a significant body of water shared with Nigeria, Chad, and Cameroon. Its size keep on fluctuating.

About Niger Benin Export Pipeline

  • The 1,930-kilometer pipeline runs from Niger’s Chinese-built Agadem oil field to the port of Cotonou in Benin.
  • It was designed to help Niger achieve an almost 5x increase in oil production through a $400 million deal with China’s state-run national petroleum company.
  • The pipeline faces significant challenges, including a recent diplomatic disagreement with Benin.
  • These issues threaten to strain Niger’s economy, heavily reliant on external support now withheld after a coup.

 

PYQ:

[2018] Which of the following has/have shrunk immensely/dried up in the recent past due to human activities?

  1. Aral Sea
  2. Black Sea
  3. Lake Baikal

Select the correct answer using the code given below:

(a) 1 only

(b) 2 and 3

(c) 2 only

(d) 1 and 3

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OBOR Initiative

Second Phase of China-Pakistan Economic Corridor (CPEC)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: CPEC 2.0, Gwadar Port

Why in the News?

Pakistani PM is on a formal visit to China to attend the formal announcement of the second phase of the China-Pakistan Economic Corridor (CPEC-II).

About CPEC-II

  • CPEC’s next phase shifts focus from infrastructure and energy to sectors like agriculture, Pakistan Railways’ Main Line-I (ML-1) upgrade, and realignment of the Karakorum Highway.
  • CPEC was initiated in 2015 as part of President Xi Jinping’s Belt and Road Initiative (BRI).

Why CPEC-II?

  • It will provide Pakistan with a strategic advantage in terms of trade and commerce
  • CPEC-II includes significant investments in the energy sector, which will help overcome Pakistan’s chronic power shortages and ensure a stable supply of electricity
  • Provides a shortcut for China’s access to the Persian Gulf to secure oil imports, and
  • Stimulate industrial and economic activity in Pakistan.

Belt and Road Initiative (BRI)

  • The Belt and Road Initiative, formerly known as One Belt One Road, is a global infrastructure development strategy adopted by the Chinese government in 2013.
  • It will invest in nearly 70 countries and international organizations.
  • Infrastructure projects include ports, railways, highways, power stations, aviation and telecommunications.
  • “Belt” refers to the overland routes for road and rail transportation, called “the Silk Road Economic Belt”; whereas “road” refers to the sea routes or the 21st Century Maritime Silk Road.
  • The project has a target completion date of 2049 which coincides with the 100th anniversary of the People’s Republic of China.

India’s Concerns

  • Sovereignty Concerns: India expresses reservations as CPEC traverses through Pakistan-occupied Kashmir (PoK), challenging territorial sovereignty and potentially bolstering Pakistan’s claim over the region.
  • Geostrategic Implications: The expansion of Gwadar port under CPEC extends China’s “String of Pearls” around India, prompting concerns over regional power dynamics.

CPEC’s Progress so Far

  • Mixed Outcomes: The initial phase of CPEC primarily addressed infrastructure, energy, and port development projects, with progress showing variations.
  • Project Status: While several power projects have been completed, significant delays and challenges persist in transport-related projects and Special Economic Zones (SEZs).

Challenges and Roadblocks

  • Slow pace: Gwadar, despite being the epicentre of multibillion-dollar projects, lacks basic necessities like reliable access to water and electricity, let alone other facilities.
  • Baloch freedom movement: This is another impediment to the stalled project where Chinese officials are targeted and killed.
  • Consistent security threat: China is also seeking to deploy its Army in the CPEC projects, to which Pakistan has contested.

PYQ:

[2018] The China-Pakistan Economic Corridor (CPEC) is viewed as a cardinal subset of China’s larger ‘One Belt One Road’ initiative. Give a brief description of CPEC and enumerate the reasons why India has distanced itself from the same. (150 Words, 10 Marks)

[2016] ‘Belt and Road Initiative’ is sometimes mentioned in the news in the context of the affairs of

(a) African Union

(b) Brazil

(c) European Union

(d) China

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OBOR Initiative

What’s behind the latest US-China trade fight?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora, Indian Economy, and issues.

Why in the news? 

China’s burgeoning production of electric cars and other green technologies has become a flashpoint in a new US-China trade fight, highlighted by US Treasury Secretary Janet Yellen during her five-day visit to China.

Context:  

  • According to the Paris-based International Energy Agency, China has built a substantial car industry that accounts for 60% of global electric vehicle sales. Similar dynamics exist in other industries, such as solar panels, batteries, and steel.
  • China is now the world’s largest producer of solar cells.
  • Now the main concern is that the Chinese are building up a lot of capacity in many industries across the board, including these new technology sectors, and if domestic demand does not pick up, they are going to be looking for markets outside the country.

US-China Trade Dispute:

  • The US and China have been slugging it out since Trump slapped heavy tariffs on imported steel and aluminum items from China in March last year, and China responded by imposing tit-for-tat tariffs on billions of dollars worth of American imports.
  • The IMF noted that the US-China trade tension was one factor that contributed to a “significantly weakened global expansion” late last year, as it cut its global growth forecast for 2019.

US-China Trade and Investment Facts:

  • US GOODS & SERVICES trade with China totalled an estimated $737.1 billion in 2018. Exports: $179.3 billion; imports: $557.9 billion; deficit: $378.6 billion
  • CHINA IS CURRENTLY the US’s largest goods trading partner with $659.8 billion in total (two-way) goods trade in 2018. Exports: $120.3 billion; imports: $539.5 billion; US goods trade deficit: $419.2 billion
  • US FDI IN CHINA (stock) was $107.6 billion in 2017, a 10.6% increase from 2016. US direct investment in China is led by manufacturing, wholesale trade, finance and insurance
  • CHINA FDI IN THE US (stock) was $39.5 billion in 2017, down 2.3% from 2016. China’s direct investment in the US is led by manufacturing, real estate, depository institutions

How does China’s Auto Industry pose an external threat to Indian Market?

  • Market Dominance: China is dominating the local market and threatening to dominate India’s traditional export markets, which could cause concern for the ‘Make in India‘ program.
  • Quality Concerns: The quality of auto parts coming from China is a major concern for the safety of vehicles in India. With increasing stakes by Chinese vendors, the situation is expected to become more challenging.
  • Cost Advantage: Chinese automakers have a cost advantage over North American and European brands, allowing them to undercut rivals. This cost advantage is due to Chinese manufacturers’ ability to produce EVs more efficiently and profitably than their Western counterparts.
  • Security concerns: Chinese automakers flooding foreign markets with their autos and the potential for these vehicles to be used for espionage, data collection, or sabotage.

How India can benefit from the ongoing US-China trade war?

  • Export Opportunities: India can tap export opportunities in both the US and China, particularly in areas such as garments, agriculture, automobile, machinery, apparel, and readymade garments
  • Export Growth: India’s exports to the US increased by 11.2% in 2018, and to China by 31.4% in the same year, indicating the potential for further growth
  • Product Opportunities: India can boost exports of around 350 products to the US and China, including items like copper ores, rubber, paper/paperboard, industrial valves, vulcanised rubber, carbon or graphite electrodes, and natural honey
  • Trade Deficit Reduction: Increasing exports would help India narrow the widening trade deficit with China, which stood at USD 50.12 billion during April-February 2018-19

Conclusion: The US-China trade fight intensifies over China’s dominance in green technology sectors like electric vehicles. India stands to benefit from increased exports to both nations, potentially narrowing its trade deficit with China while tapping into new markets.

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OBOR Initiative

China to develop strategic Hambantota Seaport

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Hambantota Port, String of Pearls

Mains level: NA

Why in the News?

Sri Lanka’s PM said that China has pledged to develop the island nation’s strategic Hambantota Seaport and the capital’s airport after talks with his counterpart in Beijing.

About Hambantota Seaport

  • The Hambantota Seaport, also known as the Magampura Mahinda Rajapaksa Port, is a deep-sea port.
  • It is situated on the southern coast of Sri Lanka and lies strategically along major international shipping routes, particularly connecting Asia with Africa and Europe.
  • The construction of the Hambantota Seaport began in 2007 and was completed in multiple phases in November 2010.
  • Sri Lanka in a controversial move signed an agreement in 2017 wherein a Chinese state-owned enterprise, acquired a 70% stake in the port on a 99-year lease.

How does this port benefit China?

  • The port is anticipated to assume a crucial role within China’s Belt and Road initiative (BRI), aiming to connect ports and roadways spanning from China to Europe.
  • BRI’s foundation lies in a network of harbors worldwide, positioning China to challenge the United States as the foremost maritime superpower.
  • The port forms part of China’s ‘string of pearls’ strategy, potentially encircling India and accommodating its military vessels.

 


PYQ:

2022: Which one of the following statements best reflects the issue with Senkaku Islands, sometimes mentioned in the news?

  1. It is generally believed that they are artificial islands made by a country around South China Sea.
  2. China and Japan engage in maritime disputes over these islands in East China Sea.
  3. A permanent American military base has been set up there to help Taiwan to increase its defence capabilities.
  4. Though International Court of Justice declared them as no man’s land, some South-East Asian countries claim them.

 

Practice MCQ:

Which of the following statements regarding important seaports in Asia are correct?

  1. Port of Singapore is the world’s busiest transshipment port and a major hub for global shipping.
  2. Port of Shanghai, located in China, is the busiest container port in the world.
  3. Port of Colombo in Sri Lanka serves as a major transshipment hub in the Indian Ocean region.
  4. Port of Yokohama, situated in Japan, is the largest port in terms of cargo tonnage handled annually.

Select the correct option:

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1, 2, and 3 only
  4. All of the above

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OBOR Initiative

Explained: China’s Relation with Africa

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Chinese inroads in Africa

africa

Introduction

  • China’s Minister of Foreign Affairs, Wang Yi, embarked on a diplomatic tour across four African nations—Egypt, Tunisia, Togo, and the Ivory Coast.
  • Marking his 11th annual visit to Africa, Wang Yi’s trip aimed at bolstering economic and security cooperation, aligning with the outcomes of the China-Africa Leaders Dialogue and setting the stage for the ninth Forum on China-Africa Cooperation (FOCAC) in 2024.

China’s FM Visit: Key Objectives

  • Implementation of Dialogue Outcomes: Execute initiatives from the China-Africa Leaders Dialogue, focusing on industrialization, agricultural modernization, and talent development support.
  • Peace Mediation in Gaza: In Egypt, Wang Yi expressed China’s global mediation intentions, urging an “immediate and comprehensive ceasefire” in Gaza.

Historical Significance of Sino-African Relations

  • Roots in Cold War Era: Sino-African relations date back to the 1950s, with China supporting African liberation movements during the Cold War.
  • FOCAC Initiatives (2000): The first Forum on China-Africa Cooperation in 2000 marked a shift towards diplomacy, investment, and trade, evolving into a robust partnership.
  • Belt and Road Initiative (2013): China’s Belt and Road Initiative strengthened ties with 52 African countries, making China Africa’s largest trading partner.

China’s Objectives in Africa

  • Resource Access: Securing key resources, with Africa supplying 90% of global cobalt, platinum, and 75% of coltan, crucial for China’s tech industry.
  • Geopolitical Influence: Leveraging Africa’s role as the largest bloc in the UN General Assembly to support China’s stances on issues like the South China Sea.
  • Yuan Strengthening: Encouraging Africa to trade in the Chinese currency (RMB) for economic advantages and debt restructuring.
  • Commercial Opportunities: Utilizing Africa’s markets for Chinese exports, benefiting from a young population and a cost-effective labor force.

Impact on Africa

  • Investment, Trade, and Development Aid: Africa receives vital investment, trade benefits, and development aid from China, fostering a ‘win-win partnership.’
  • Infrastructure Development: Chinese-built infrastructure and industrial parks contribute to employment opportunities, making ‘Made in Africa’ a reality.
  • Agricultural Advancements: Chinese support in advancing hybrid crops enhances Africa’s agricultural sector.
  • Non-Interference Approach: China’s non-interference policy in development aid garners trust, contrasting with Western practices and offering African nations autonomy.

Challenges and Controversies

  • Debt Trap Concerns: Some view Chinese investments as potentially leading to debt traps, although not all African nations have poorly managed their debt.
  • Authoritarian Leverage: China’s ‘non-interference’ stance may empower authoritarian regimes in Africa, raising concerns about governance and political stability.

Conclusion

  • Wang Yi’s African tour signifies China’s commitment to strengthening its multifaceted partnership with the continent, addressing mutual concerns, and laying the groundwork for collaborative ventures in the years to come.

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OBOR Initiative

China to extend China-Myanmar Economic Corridor to Sri Lanka

Note4Students

From UPSC perspective, the following things are important :

Prelims level: China-Myanmar Economic Corridor

Mains level: Belt and Road Initiative

cmec

Central Idea

  • In a significant move towards expanding the Belt and Road Initiative (BRI) in South Asia, China has expressed its commitment to prioritize the extension of the China-Myanmar Economic Corridor (CMEC) to Sri Lanka.

What is CMEC?

Details
Geographical Scope Connects China’s Yunnan Province with Mandalay, Kyaukphyu SEZ on the Bay of Bengal, and Yangon in Myanmar.
Strategic Importance Provides China an alternative to the Strait of Malacca for trade and energy transport. Offers a shorter, more secure route to the Middle East and Africa.
Infrastructure Involves building roads, railways, ports, and industrial zones. Key projects include the development of the Kyaukphyu deep-sea port.
Economic Impact on Myanmar Promises infrastructure development, foreign investment, and job creation in Myanmar. Raises concerns about debt sustainability, environmental impact, and displacement of local communities.
Political and Security Challenges The corridor passes through politically sensitive and conflict-prone areas in Myanmar, posing challenges to its implementation and stability.

Expanding the Economic Corridor

  • China’s Strategic Priority: State Councillor Shen Yiqin emphasized that China is making the extension of the CMEC to Sri Lanka a strategic priority.
  • Free Trade Agreement Acceleration: Both nations affirmed their commitment to expediting the implementation of the China-Sri Lanka Free Trade Agreement, reinforcing their economic partnership.

Significance of CMEC in BRI

  • CMEC’s Emergence: CMEC is the latest addition to the six land corridors within the Belt and Road Initiative, gaining prominence over the stalled Bangladesh-China India Myanmar (BCIM) corridor.
  • South Asian Perspective: India and Bhutan remain outside the BRI framework, while countries like Sri Lanka are enthusiastic participants, poised for a more substantial economic contribution in the second phase of the initiative.

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OBOR Initiative

The Third Belt and Road Forum

Note4Students

From UPSC perspective, the following things are important :

Prelims level: BRI, CPEC, IMEC etc

Mains level: BRI, objectives, achievements, challenges and global alternatives

What’s the news?

  • The Third Belt and Road Forum for International Cooperation convened in Beijing, China (October 17–18).

Central idea

  • The recent Third Belt and Road Forum for International Cooperation held in Beijing, China, has once again brought the Belt and Road Initiative (BRI) into the spotlight. The BRI, initiated by Chinese President Xi Jinping, has been a cornerstone of China’s foreign policy and global aspirations.

Objectives of the Belt and Road Initiative

  • Transition to a Global Power: The BRI seeks to transform China from a regional power with global influence into a comprehensive global power. It aims to elevate China’s status on the world stage.
  • Reboot Globalization: The BRI is viewed as China’s effort to rejuvenate and reshape globalization. It intends to address perceived shortcomings in the current global order and advance a new form of global economic integration.
  • Alternative Trade Routes: China aims to develop alternative transportation and trade routes through the BRI to reduce its dependence on the Strait of Malacca, a critical trade route for China’s economy.
  • Promoting Local Currency in Trade: President Xi Jinping advocates the use of local currencies in trade to lessen reliance on the US dollar, thereby reshaping the global economic order.

Achievements of the BRI

  • Establishment of the Asian Infrastructure Investment Bank (AIIB): China has established the AIIB with a substantial $100 billion, challenging existing lending institutions and enabling early gains from the BRI.
  • Global Branding for Xi Jinping: The BRI has provided President Xi Jinping with a platform to establish himself as a global statesman and project China’s power and influence overseas. It has been incorporated into China’s domestic political framework.
  • BRI Cooperation Pacts: Over 200 BRI cooperation pacts have been signed with more than 150 nations, demonstrating the initiative’s global reach and influence.
  • Addressing the Global Infrastructure Deficit: The BRI aims to bridge the global infrastructure deficit, including access to electricity, clean water, and broadband, with projects ranging from motorways to digital infrastructure.

Challenges of the BRI

  • Ecological Damage: BRI projects have been criticized for causing ecological harm, including deforestation and environmental degradation.
  • Displacement of People: Some BRI projects have led to the displacement of local communities, raising social and humanitarian concerns.
  • Disputes and Labor Unrest: Disputes have arisen over issues such as payouts and labor conditions, impacting the smooth execution of BRI projects.
  • Debt Concerns: Concerns about unsustainable debt have emerged, particularly in cases like Laos, where the country owes a significant proportion of its GDP to China.
  • Unequal Benefits: In cases like the China-Pakistan Economic Corridor (CPEC), there are perceptions that the BRI disproportionately benefits China, raising questions about the initiative’s win-win cooperation tagline.

Global Alternatives to the BRI

  • United States-Japan Initiatives: During the Trump era, the United States and Japan initiated infrastructure investment alternatives in the Indo-Pacific region as a response to the BRI.
  • Build Back Better World (B3W) Initiative: The Biden administration introduced the ‘Build Back Better World’ initiative, aiming to channel private capital into sectors like climate change, energy security, healthcare, digital technology, and gender equity as a counter to the BRI.
  • India-Middle East-Europe Corridor (IMEC): The G-20 Delhi summit proposed the India-Middle East-Europe Corridor, envisioning trade connectivity, electricity and digital infrastructure, and clean hydrogen export pipelines, offering an alternative to the BRI.

Conclusion

  • As the BRI nears its second decade, it faces pivotal choices. Despite notable global infrastructure achievements, sustainability, fairness, and environmental issues pose challenges. Emerging global alternatives signal diverse visions for international cooperation, shaping the BRI’s future based on China’s ability to address these challenges and adapt to evolving global dynamics.

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OBOR Initiative

CPEC: A Decade On and Challenges Ahead

Note4Students

From UPSC perspective, the following things are important :

Prelims level: China Pakistan Economic Corridor (CPEC)

Mains level: CPEC and India's sovereignty issue

CPEC

Central Idea

  • As China celebrates the 10th anniversary of its ambitious Belt and Road Initiative (BRI) in 2023, the progress of one of its flagship projects, the China Pakistan Economic Corridor (CPEC), appears to have slowed down.
  • Despite its initial promise, challenges related to economic, security, and political factors have led to a reevaluation of the CPEC’s future.

CPEC Overview

  • Inception: Signed in 2015, the CPEC aimed to facilitate Chinese goods’ transportation from Xinjiang through Pakistan to the Gwadar port on the Arabian Sea.
  • Investment: It involves significant Chinese investments in rail and road infrastructure and energy development in Pakistan.

Reasons behind CPEC Slowdown

(A) Economic Factors

  • Pakistan’s Economic Crisis: Pakistan’s deteriorating economic situation has impacted the viability of new CPEC projects.
  • China’s Economic Slowdown: China’s economic slowdown has also contributed to a reduction in new investments.

(B) Overpromising and Under-delivering

  • High Expectations: CPEC faced criticism for generating high expectations but delivering limited tangible benefits to the Pakistani people.
  • Debt Burden: Pakistan has incurred substantial public debt and payments to Chinese companies, further straining its finances.

(C) Political Instability in Pakistan

  • Imran Khan’s Ouster: The political instability following the ousting of former Prime Minister Imran Khan in 2022 has raised concerns about political stability.
  • Lack of Clarity: The uncertainty surrounding the timing of future elections adds to China’s worries.

(D) Security Concerns

  • Threats to Chinese Workers: Security threats to Chinese workers and projects, including attacks by militants, have raised alarm.
  • Expanding Threat Landscape: China faces a range of security threats, including Baloch insurgents, the Pakistani Taliban (TTP), and Islamic State-Khorasan province (IS-K).

China’s Response and Concerns

  • Security Measures: China is increasingly concerned about security threats to its Belt and Road investments and has taken measures to safeguard its personnel and infrastructure.
  • Potential Political Fallout: China’s potential deployment of its security forces to protect its assets in Pakistan could have political implications.

Conclusion

  • The CPEC, a vital component of China’s BRI, faces a complex set of challenges.
  • Economic pressures, overpromising, political instability in Pakistan, and security threats have contributed to its slowdown.
  • While some maintain optimism about the project’s future, addressing these multifaceted issues will be crucial for the CPEC to realize its full potential and continue as a significant driver of regional development.

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OBOR Initiative

Nepal refuses to join China’s Global Security Initiative (GSI)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Global Security Initiative (GSI)

Mains level: Read the attached story

Central Idea

About Global Security Initiative (GSI)

  • The GSI aims to contribute to global peace and stability by promoting fairness and justice among nations.
  • It was launched in April 2022.
  • Six key principles:
    1. Commitment to Comprehensive Security: Emphasizing cooperation for maintaining world peace and security.
    2. Respect for Sovereignty: Upholding the sovereignty and territorial integrity of all countries, non-interference in internal affairs, and respect for diverse development paths.
    3. UN Charter Principles: Abiding by the UN Charter’s principles, rejecting Cold War thinking, unilateralism, group politics, and bloc confrontations.
    4. Indivisible Security: Addressing the legitimate security concerns of all nations, promoting balanced and sustainable security, and opposing self-security at the expense of others.
    5. Peaceful Conflict Resolution: Advocating dialogue and consultation for resolving international disputes, rejecting double standards, unilateral sanctions, and extraterritorial jurisdiction.
    6. Multifaceted Security: Maintaining security in traditional and non-traditional domains, collaborating on regional conflicts, and addressing global challenges like terrorism, climate change, cybersecurity, and biosecurity.
  • Other Policy Initiatives: President Xi’s new initiatives—GDI, GSI, and Global Civilisation Initiative (GCI)—have become cornerstones of China’s foreign policy during his third term.

Nepal’s Stance on Chinese Initiatives

  • Supporting Global Development Initiative: Nepal expressed support for China’s Global Development Initiative (GDI) and considered joining the Group of Friends of the GDI.
  • Belt and Road Initiative (BRI): The joint statement reaffirmed cooperation under the Belt and Road Initiative, emphasizing the need to finalize a delayed BRI implementation plan swiftly.

Key collaborated projects

  • Flagship Cross-Border Railway: Nepal and China are engaged in extensive connectivity projects, including the flagship cross-border railway from Lhasa to Kathmandu.
  • Broad Connectivity Goals: Both countries aim to strengthen connectivity across various sectors like ports, roads, railways, airways, and grids. They are working on the Trans-Himalayan Multi-Dimensional Connectivity Network.
  • Border Port Openings: Nepal and China welcomed the opening of ports like Lizi-Nechung and the reopening of Zhangmu-Khasa for passenger services. They plan to open other border ports like Chentang-Kimathanka and Riwu-Olangchungola soon.
  • Infrastructure Support: China pledged support for projects like the Araniko Highway maintenance, Syaphrubesi-Rasuwagadhi Highway repair, and a 220 KV Cross-Border Power Transmission line. Progress on the feasibility study of the Jilong/Keyrung-Kathmandu Cross-Border Railway was noted, with further cooperation and training initiatives planned.

Balancing Act by Kathmandu

  • Strategic Balancing: Nepal maintains a careful balance by cooperating on development projects with China while exercising caution on security matters.
  • Commitment on Tibet: Nepal reaffirmed its commitment to China on Tibet, pledging not to allow separatist activities against China on Nepali soil.
  • Support for Sovereignty: China expressed firm support for Nepal’s independence, sovereignty, and territorial integrity.

Conclusion

  • Nepal’s diplomatic balancing act reflects its cautious approach towards security cooperation while enthusiastically engaging in cross-border connectivity projects.
  • The joint statement highlights Nepal’s support for China’s Global Development Initiative and commitment to the Belt and Road Initiative.
  • Despite declining to explicitly join the Global Security Initiative, Nepal agreed to elements of security collaboration with China.

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OBOR Initiative

‘Route of Development’: Iraq’s Ambitious Infrastructure Plan

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Route of Development Project

Mains level: Not Much

iraq development

Central Idea

  • Iraq aims to establish itself as a regional transportation hub by enhancing its road and rail infrastructure.
  • The ambitious project, known as the “Route of Development,” is estimated to cost $17 billion.

Route of Development Project

  • Project Scope: The “Route of Development” will span 1,200 kilometers from the northern border with Turkey to the Gulf in the south.
  • Economic Objectives: The project aims to promote a sustainable non-oil economy and strengthen regional connectivity.
  • Port Capacity: The commercial port of Al-Faw will undergo expansion to handle cargo for the project.
  • Train Stations: Around 15 train stations will be constructed along the route, including major cities like Basra, Baghdad, Mosul, and up to the Turkish border.

Challenges and Priorities

  • Infrastructure Condition: Iraq’s infrastructure, including roads, requires reconstruction and maintenance due to the impacts of war, corruption, and sanctions.
  • Focus on Electricity: Upgrading the failing electricity infrastructure is a priority for the government.

Geopolitical Position and Economic Benefits

  • Strategic Geographical Location: Iraq aims to capitalize on its position by becoming a transportation hub for goods and people between the Gulf, Turkey, and Europe.
  • Port Expansion: The commercial port of Al-Faw will serve as a gateway for cargo before transportation through the new road and rail links.
  • Train Station Network: The construction of train stations in major cities along the route will facilitate efficient transportation.
  • Trade Opportunities: The Gulf presents significant trade prospects, especially in the transport of hydrocarbons.

Challenges and Skepticism

  • Viability Concerns: Some experts question the project’s feasibility, highlighting the need for “fluidity” in transportation routes and the preference for direct shipping without intermediate loading and unloading.
  • Adaptation to Customer Preferences: Consideration should be given to evolving global transport dynamics and customer preferences.

 

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OBOR Initiative

CPEC to be extended to Afghanistan

Note4Students

From UPSC perspective, the following things are important :

Prelims level: CPEC

Mains level: India's territorial sovereignty breach

cpec

Central Idea: Pakistan, China and Afghanistan have agreed to extending the Beijing-backed China-Pakistan Economic Corridor (CPEC) to Afghanistan to fully harness the country’s potential as a hub for regional connectivity.

What is CPEC?

  • The CPEC, one of the most ambitious components of Beijing’s Belt and Road Initiative (BRI), was announced to great fanfare in 2015.
  • CPEC is a collection of infrastructure projects that are under construction throughout Pakistan beginning in 2013.
  • Originally valued at $47 billion, the value of CPEC projects is worth $62 billion as of 2020.
  • It is intended to rapidly upgrade Pakistan’s required infrastructure and strengthen its economy by the construction of modern transportation networks, numerous energy projects, and SEZs.
  • On 13 November 2016, CPEC became partly operational when Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to Africa and West Asia.

India’s reservation against CPEC

Ans. Sovereignty breach

  • India which shares tense relations with Pakistan, objects to the CPEC project as upgrade works to the Karakoram Highway are taking place in Gilgit-Baltistan.
  • This is the territory illicitly occupied by Pakistan in 1947-48.
  • During the visit of Indian PM Modi to China in 2015, the Indian FM, Sushma Swaraj reportedly told the Chinese.
  • India did not object to the Chinese construction of the Karakoram Highway which was built between 1959 and 1979.

Why CPEC?

  • Economic push for Pak: CPEC has consistently been held up as a “gamechanger” for Pakistan’s economy.
  • Debt trap diplomacy: At the same time, China is the only country that is heavily investing in Pakistan.

Progress status

  • Slow pace: Gwadar, despite being the epicenter of multibillion-dollar projects, lacks basic necessities like reliable access to water and electricity, let alone other facilities.
  • At standstill: But the road to completion has proved long and winding. Reports indicate that the pace of CPEC projects has been slowing down in Pakistan in recent years.
  • Baloch freedom movement: This is another impediment to the stalled project where Chinese officials are targeted and killed.
  • Consistent security threat: China is also seeking to deploy its Army in the CPEC projects, to which Pakistan has contested.

 

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OBOR Initiative

Chinese firm to build Solomon Islands Port Project

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Solomon Islands

Mains level: Read the attached story

solomon

A Chinese state-backed company has won a contract to develop Honiara, a key port in the Solomon Islands. This is a major victory for China, which is seeking to gain a strategic foothold in the South Pacific.

Why discuss this?

  • The Solomon Islands have become a focal point in the diplomatic tussle between China and the US, following the signing of a secret security pact between the Solomons and Beijing in 2022.
  • This has raised concerns that China may be establishing a permanent naval base in the country.

About Solomon Islands

  • The Solomon Islands is a sovereign country consisting of six major islands and over 900 smaller islands in Oceania, to the east of Papua New Guinea and northwest of Vanuatu.
  • Its capital, Honiara, is located on the largest island, Guadalcanal.
  • It is part of the ethnically Melanesian group of islands in the Pacific and lies between Papua New Guinea and Vanuatu.
  • The country takes its name from the Solomon Islands archipelago, which is a collection of Melanesian islands that also includes the North Solomon Islands (a part of Papua New Guinea).
  • It excludes outlying islands, such as the Santa Cruz Islands and Rennell and Bellona.

Quick recap of its past

  • The islands, which were initially controlled by the British Empire during the colonial era, went through the hands of Germany and Japan.
  • It then went back to the UK after the Americans took over the islands from the Japanese during World War II.
  • The islands became independent in 1978 to become a constitutional monarchy under the British Crown, with a parliamentary system of government.
  • Nevertheless, its inability to manage domestic ethnic conflicts led to close security relations with Australia, which is the traditional first responder to any crisis in the South Pacific.

How did China enter the picture?

  • Earlier this year, the Solomon Islands established a security agreement with China, saying it needed Beijing’s assistance with its domestic security situation.
  • But the announcement had rattled the west, esp. the US, Australia and others in the Indo-Pacific region.
  • The concerns were that the agreement could potentially lead to a Chinese military base on the island nation and a gain in power-projection capabilities.
  • At that time, following intense scrutiny, the Solomon Islands had denied that the agreement would allow China to establish a naval base.

What is the Solomon Islands’ stance?

  • The government has asked all partner countries with plans to conduct naval visits or patrols to put them on hold until a revised national mechanism is in place.
  • The revised national mechanism applied to all foreign vessels seeking access to the country’s ports.
  • The nation wanted to build up its own naval capacity.
  • It has some unfortunate experiences of foreign naval vessels entering its waters without any diplomatic clearance.

What is behind China’s growing influence in the region?

  • There is no dispute that China has been rapidly increasing its presence and influence in the region for over three decades, particularly in the South Pacific.
  • Certainly Beijing views the Pacific Island region as an important component of its Belt and Road Initiative (BRI).
  • Specifically, it sees the region as a critical air freight hub in its so-called Air Silk Road, which connects Asia with Central and South America.

Concerns of the West

  • The port project could open the door to a Chinese naval base, which would significantly extend China’s military reach in the South Pacific.”
  • It is likely that this security agreement between China and the Solomon Islands has been driven by, what the CFR calls, Beijing’s “sense of vulnerability” in the region.

What is the rationale for the Solomon Islands’ increasing proximity to China?

  • The Solomon Islands had cultivated strong ties with Taiwan, which ended with the emergence of the current government in Honiara.
  • In 2019, the regime change switched Taiwan for China.
  • This was supposedly after Beijing offered half a billion US dollars in financial aid, roughly five times what Taiwan spent on the islands in the past two decades.
  • It has been alleged by the pro-Taiwan Opposition that the incumbent government has been bribed by China.

Why is China interested in the Solomon Islands?

  • Isolating Taiwan: The Solomon Islands was one among the six Pacific island states which had official bilateral relations with Taiwan.
  • Supporter in UN: The small Pacific island states act as potential vote banks for mobilising support for the great powers in international fora like the United Nations.
  • Larger EEZ: These states have disproportionately large maritime Exclusive Economic Zones when compared to their small sizes.
  • Natural resources: Solomon Islands, in particular, have significant reserves of timber and mineral resources, along with fisheries.
  • Countering US: But more importantly, they are strategically located for China to insert itself between America’s military bases in the Pacific islands and Australia.

What does this mean for the established geopolitical configuration in the region?

  • Diminishing western influence: The Pacific islands, in the post-World War II scenario, were exclusively under the spheres of influence of the Western powers, in particular, the US, UK, France and Australia and New Zealand.
  • Inserting into western hegemony: All of them have territorial possessions in the region, with the three nuclear powers among them having used the region as a nuclear weapons testing ground.
  • Shifting of dependencies: The smaller island nations of the region are heavily dependent on them, especially Australia as it is a resident power.

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OBOR Initiative

China-Pakistan Economic Corridor (CPEC)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: CPEC, BRI

Mains level: Read the attached story

India has severely criticized the reported move by both China and Pakistan for third-party participation in some projects on the China-Pakistan Economic Corridor (CPEC) that passes through Pakistan-occupied Kashmir (PoK).

China-Pakistan Economic Corridor (CPEC)

  • The CPEC, one of the most ambitious components of Beijing’s Belt and Road Initiative (BRI), was announced to great fanfare in 2015.
  • CPEC is a collection of infrastructure projects that are under construction throughout Pakistan beginning in 2013.
  • Originally valued at $47 billion, the value of CPEC projects is worth $62 billion as of 2020.
  • It is intended to rapidly upgrade Pakistan’s required infrastructure and strengthen its economy by the construction of modern transportation networks, numerous energy projects, and SEZs.
  • On 13 November 2016, CPEC became partly operational when Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to Africa and West Asia.

Why CPEC?

  • CPEC has consistently been held up as a “gamechanger” for Pakistan’s economy.
  • But the road to completion has proved long and winding. Reports indicate that the pace of CPEC projects has been slowing down in Pakistan in recent years.
  • At the same time, China is the only country that is heavily investing in Pakistan.

Why in news?

  • The lack of progress has led to numerous reports about CPEC being at a near standstill in the country.
  • Gwadar, despite being the epicenter of multibillion-dollar projects, lacks basic necessities like reliable access to water and electricity, let alone other facilities.
  • The baloch freedom movement is another impediment to the stalled project.
  • There have been sporadic attacks in Gwadar and elsewhere in the province and the country to discourage Chinese investments in the province.
  • China is also seeking to deploy its Army in the CPEC projects, to which Pakistan has contested.

India’s reservation

  • The GoI, which shares tense relations with Pakistan, objects to the CPEC project as upgrade works to the Karakoram Highway are taking place in Gilgit-Baltistan.
  • This is the territory illicitly occupied by Pakistan in 1947-48.
  • During the visit of Indian PM Modi to China in 2015, the Indian FM, Sushma Swaraj reportedly told the Chinese.
  • India did not object to the Chinese construction of the Karakoram Highway which was built between 1959 and 1979.

 

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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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OBOR Initiative

EU unveils Global Gateway Project

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Global Gateway Project

Mains level: Countering projects against Chinese BRI

The European Union has unveiled a project called ”Global Gateway” that is worth 300 billion euros ($340 billion). The project is being seen as a response to China’s Belt and Road strategy.

Global Gateway Project

  • It is the initiative Build Back Better World and the European Global Gateway that are reinforcing each other.
  • The bloc will mobilize the financial aid in public and private infrastructure investment around the world.
  • It is an offshoot of a plan by G7 countries to offer developing countries an alternative to Belt and Road.
  • The project will probably extend the remit of the European Fund for Strategic Investment, or create a similar institution, which can act as a guarantor for riskier investments in the ‘Global South’.
  • The EU has indicated it especially wants to compete for infrastructure development projects in Africa.

About Belt and Road Initiative

  • The Belt and Road is a flagship project of Chinese President Xi Jinping that was launched in 2013.
  • Beijing has invested $139.8 billion in the project which is the centerpiece of Chinese foreign policy.
  • BRI aims to develop land and sea infrastructure to better connect China to Asia, Europe and Africa for trade and development, and it has found many partners around the world.

 

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OBOR Initiative

Colombo Port City Project and Chinese involvement

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Chinese encroachment of Lankan Sovereignty

Sri Lanka recently passed the controversial Colombo Port City Economic Commission Bill, which governs the China-backed Colombo Port City project worth $1.4 billion, amid wide opposition to the creation of a “Chinese enclave” in the island nation.

Colombo Port City Project

  • The Colombo Port City has grabbed headlines in Sri Lanka in recent months even as the relentless third wave of the COVID-19 pandemic sweeps through the country.
  • Almost an artificial island, the territory coming up on 2.69 square kilometers of land reclaimed from Colombo’s seafront has stirred controversy since its inception.
  • Those backing it see in that patch of land their dream of an international financial hub — a “Singapore or Dubai” in the Indian Ocean.

When was it launched?

  • The project was launched in September 2014 by Chinese President Xi Jinping during a visit to the island nation under the Mahinda Rajapaksa administration’s second term.
  • After President Mahinda Rajapaksa was ousted in January 2015, the successor “national unity” government of Maithripala Sirisena and Ranil Wickremesinghe went ahead with the project after briefly halting it.
  • On returning to power in November 2019, the Rajapaksas vowed to expedite the project. The Sri Lankan government says the project will bring in around 83,000 jobs and $15 billion initially.

Issues with the project

  • But skeptics claim that it could well become a “Chinese colony”, with the Bill, which is now an Act.
  • The law provides China substantial “immunity” from Sri Lankan laws, besides huge tax exemptions and other incentives for investors.

What is the extent of China’s involvement?

Effectively, China has substantial control over two key infrastructure projects in Sri Lanka for a century.

  • The port city project is financed chiefly through Chinese investment amounting to $1.4 billion.
  • In return, the company will receive 116 hectares (of the total 269 hectares) on a 99-year lease.
  • The city separates from but located adjacent to the Colombo Port, the country’s main harbor — is the third major port-related infrastructure project where China has a significant stake.
  • China Merchants Port Holdings has an 85% stake in the Colombo International Container Terminal under a 35-year ‘Build Operate and Transfer’ agreement with the Sri Lanka Port Authority.
  • In 2017, the Sirisena-Wickremesinghe administration, unable to repay the Chinese loan with which it was saddled by the previous government, handed over the Hambantota Port to China on a 99-year lease.

Concerns from within Sri Lanka

  • Since its launch, the Colombo Port City project has faced opposition from environmentalists and fisherfolk, who feared that the project would affect marine life and livelihoods.
  • However, in the absence of wider political and societal support, their resistance did not dent successive governments’ resolve to pursue the project.
  • The more recent opposition was specific to the Colombo Port City Economic Commission Bill.
  • The resistance came from Opposition parties and civil society groups, including many who do not oppose the project per se, but rather its governance by “an all-powerful commission answerable to no one”.
  • Significantly, a section of Buddhist monks, wielding much influence in Sri Lankan politics and the Sinhala society, also opposed the Bill and said that it eroded Sri Lanka’s sovereignty.

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OBOR Initiative

China’s 17+1 Cooperation Forum

Note4Students

From UPSC perspective, the following things are important :

Prelims level: 17+ 1 Forum

Mains level: Not Much

Lithuania has decided to quit China’s 17+1 cooperation forum with central and eastern European states that include other EU members, calling it “divisive”.

About 17+ 1 Forum

  • The forum is an abbreviation for Cooperation between China and Central and Eastern European Countries.
  • It is an initiative by the Chinese Ministry of Foreign Affairs to promote business and investment relations between China and 16 countries of CEE (CEEC).
  • The countries are Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Greece, Hungary, Latvia, North Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia.
  • The format was founded in 2012 in Warsaw to push for the cooperation of the “17+1” (the 17 CEE countries and China).
  • Its goals are to promote the Chinese Belt and Road Initiative and enhance cooperation in the fields of infrastructure, transportation, and logistics, trade and investment”.

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OBOR Initiative

What is Blue Dot Network?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Blue Dot Network, BRI

Mains level: Blue Dot Network

A group of US Senators has written to India asking to join the Blue Dot Network.

Try this MCQ:

Q.The Blue Dot Network recently seen in news is a global alliance for:

a) Beaches Certification

b) Infrastructure development

c) 5G connectivity

d) Patents regulation

The Blue Dot Network

  • Blue Dot is a US-led collaboration with Australia and Japan that supports private-sector-led infrastructure financing opportunities in response to China’s Belt and Road Initiative (BRI).
  • It was formally announced on 4 November 2019 at the Indo-Pacific Business Forum in Bangkok, Thailand on the sidelines of the 35th ASEAN Summit.
  • It is led by the U.S. International Development Finance Corporation, Japan Bank for International Cooperation, and Department of Foreign Affairs and Trade of Australia.
  • It is expected to serve as a global evaluation and certification system for roads, ports and bridges with a focus on the Indo-Pacific region.

Fundamental difference between BRI and Blue Dot

  • While the former involves direct financing, giving countries in need immediate short-term relief, the latter is not a direct financing initiative and therefore may not be what some developing countries need.
  • The question is whether Blue Dot offering first-world solutions to third-world countries.
  • Secondly, Blue Dot will require coordination among multiple stakeholders when it comes to grading projects.
  • Given the past experience of Quad, the countries involved in it are still struggling to put a viable bloc. Therefore, it remains to be seen how Blue Dot fares in the long run.

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