One Belt One Road Initiative
One belt one road impact on India

The People’s Republic of China introduced sweeping changes to its constitution in early 2018, incorporating the political philosophy of “socialism with Chinese characteristics” under the aegis of its powerful president Xi Jinping. The “structure of the state” was also transformed as a result of some of the constitutional reforms that sought to integrate the Chinese Communist Party (CCP) with a large number of state and local organs essentially cementing the power of the party in China’s one-party political system. According to many, the changes introduced in the constitution have deeper purposes. It has been suggested that the Chinese are trying to reassert themselves in the game of international politics and emerge as the representative of the East to counter western and specifically American influence in the region. Xi Jinping has firmly cemented his position as the head of state as well as head of the party by removing a clause in the constitution that imposed limits on the terms of presidents. The argument in some circles is that China’s rise to power and its quest for regional and potentially global dominance is intricately linked to its efforts to change the constitution and establish the supremacy of the CCP. The aggressive claims made by China in the South China Sea and the much talked about One Belt One Road (OBOR) initiative all point to China’s ambitions of dominating international politics in the coming decades. With the constitutional changes in place, the CCP has established firm control over all aspects related to domestic and foreign policy. Here is everything you need to know about China’s One Belt One Road Initiative and how it will impact India.

Is China’s Rise a Peaceful One?

China’s active involvement and muscle-flexing in Asia, particularly in the South Asian region is firmly rooted in its ambition to secure trade interests, transportation of energy resources as well as strengthening of territorial security and dominance. This ambition has manifested in policy through China’s increasingly growing claims and complaints regarding its territorial sovereignty in the east and south china seas. It is also now looking to control the oscillating effects of an unstable North Korea and to confront its long-standing historical rival Japan. Recent border tensions with India at Doklam also point to its zeal for showcasing strength. In spite of all this, China has repeatedly stated that it supports an international system based on the doctrines of multipolarity and multilateralism. The former implies the actual division of power and balance of interests in the world while the latter aspires for a normative principle of organization characterized by participation of multiple states contributing to various kinds of global governance institutions. These lofty and idealistic assertions have led some to believe that China’s rise in the coming decades will be peaceful keeping international norms and order in mind. However, many critics of Chinese foreign policy have claimed that the idea of a peaceful rise is a myth and that China’s growing dominance and quest for hegemony is bound to bring it into conflict with other regional and global powers such as India and  the USA respectively.

What is The One Belt One Road Initiative –  

The One Belt One Road initiative was announced by President Xi Jinping in the latter months of 2013 as one of the most ambitious and large-scale economic and strategic projects ever undertaken as a part of Chinese foreign policy. Beijing announced the intention to build a Silk Road Economic Belt that seeks to re-conceptualize the ancient silk trade route. It also plans to build a new 21st century Maritime Silk Road that will re-establish its historical legacy as a great naval power. The OBOR initiative has been largely characterized as a geostrategic pillar of foreign policy but not much attention has been paid to the geoeconomic aspects of the project. We shall discuss both these aspects in turn.

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The geostrategic element in the OBOR initiative has been evident in a number of ways. One of the major planks based upon which OBOR rests is China’s model of ”peripheral diplomacy” that was adopted and discussed in the 18th Party Congress in 2013. It was made clear in this event by Xi Jinping that the immediate neighbourhood of China was of vital importance and strengthening economic and strategic ties with its near neighbours was a priority for Chinese foreign policy. This policy was adopted with a view to realizing a broader goal of counterbalancing western influence with a new regional economic order sometimes called the “Eastphalian Legal Order” that has been a central pillar of Beijing’s foreign policy goal since the 1955 Bandung Conference.

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What is the Geopolitical significance of One Belt One Road Initiative?

A good example of the geostrategic element of OBOR can be found upon analyzing the China Pakistan Economic Corridor (CPEC) project reported to be worth of 46 billion dollars, that seeks to connect Gwadar port located in the province of Baluchistan in Western Pakistan with the Xinjiang region in China’s far west by building a 3000 km highway connecting the two regions. This ambitious project represents multiple positives for both Pakistan as well as China. The Gwadar port is located at a highly strategic location near the Persian Gulf close to the Strait of Hormuz which oversees passage of around 40 percent of the world’s oil transport. For China, an operational CPEC would be a great strategic victory as the passage of Chinese goods and energy supplies can afford to avoid altogether, the troublesome Strait of Malacca reducing the distance to be travelled from 12,000 km to 2500 km approximately. For Pakistan, this represents a victory of some significance as the road passes through the highly contested region of Pakistan-occupied-Kashmir (POK) which is claimed by India. India quite naturally has expressed misgivings about the CPEC and it has stated that the project openly violates its core claims of territorial sovereignty. A wide range of similar investments have been made in a number of countries including the likes of Sri Lanka and Bangladesh.

What is String of Pearls theory? 

This point brings us to another important geostrategic aspect of OBOR that has been called China’s ‘string of pearls’ strategy. China has secured multiple trade, energy and investment deals  with a number of south Asian countries such as Nepal, Bhutan, Sri Lanka, Bangladesh and as mentioned before, Pakistan. This has irked New Delhi as it feels that Beijing is trying to contain India’s vital interests by encircling its immediate neighbourhood through economic diplomacy. The OBOR also allows China to tackle problems of religious extremism in Afghanistan and achieve peace in the region which can potentially expand its long term investment and trade opportunities. At a much broader level, the OBOR seeks to counter the USA led Transpacific partnership (TPP) which seeks to increase western influence in parts of Asia. The election of Donald Trump as the 45th President of the USA was thought to have made things easier for the operationalization of OBOR, but Trump’s recent declaration of an informal trade war against China has complicated matters in that regard.

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What are the Geoeconomic Implications of One Belt One Road Initiative – 

The geoeconomic aspects of OBOR have been a little less talked about but they are just as important as the more enthusiastically advertized geostrategic concerns. Beijing has planned an extensive network of investments and trade deals to achieve a greater degree of economic integration with its neighbours. The quest for regional development needs to be understood in the context of China’s quest for domestic development. China has suffered from a great deal of inequity when it comes to the development of its constituent regions. Shanghai, for instance, has nearly five-times the wealth as compared to the inland province of Gansu which is a part of the old silk road. Beijing has tried to address this problem in the past by ramping up state investment but that has not produced significant results. Now, they wish to modify their strategy somewhat and try to focus more on the aspect of the regional integration of its provinces with the immediate neighbourhood. The revival of the silk route is a big factor in this plan.

Countering extremism With One Belt One Road Initiative – 

Another important economic aspect of the OBOR initiative is Beijing’s high levels of threat-perception from the Xinjiang region. Over the years, this region has not had constructive development and the majority Muslim population of Uyghurs with Turkish-decent have resorted to violence and terrorism in the hope of achieving greater autonomy or even secession. The growth of Islamic radicalization in this region has forced China to rethink their strategy of containing this threat which it views as an existential one. OBOR has plans to introduce greater investment and income opportunities in the Xinjiang province through the CPEC. China has identified underdevelopment and lack of prosperity as the reason for the fomenting of separatist ambitions in the restive region and has formulated a strategy to economically integrate the province with its close neighbourhood. Nearly all provinces are scrambling to be part of the OBOR project in some capacity or the other. It is estimated that all provinces have collectively earmarked a total of more than a trillion remninbi for OBOR-related infrastructure projects.

Global Expansion and Growth of Chinese Industry –

A second important geoeconomic justification for OBOR can be found in China’s desire to be more involved in the global market as a setter of international standards in the supply of goods and services. China’s reputation as the “factory of the world” has gradually waned in the last few years owing to the loss of comparative advantage in low labour costs. Beijing wishes to keep OBOR at the heart of China’s economic activities especially in international markets to allow for the greater export of high-quality Chinese goods. China will have to comply with global standards regarding products sold across global markets and it ultimately aims to become a “standard-setter ” for the rest of the world. Certain projects envisioned as part of OBOR such as high-speed railway technology encapsulates the kind of influence China wants to have in international economics. The government of China has spent significant resources to reach the pinnacle of high-speed railway engineering and wants to use this and other such industries to establish economic hegemony in certain sectors all over the world by pioneering the development of certain industries worldwide. The current premier of the State Council for the PRC, Le Keqiang, has taken significant efforts to market the advanced railway technology in various counties such as Thailand, Indonesia, Malaysia and even India. Another key aspect of China’s OBOR is its focus on expanding its advanced telecommunications industry. Companies such as Huawei, China Mobile, and ZTE have huge markets in Asia, Africa, and Latin America and they are also involved in the development of 5G technology. The country has built up a 10 trillion dollar economy and is also in urgent need to transport its productive assets elsewhere to avoid the threat of national overproduction.

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What is the problem with China’s One Belt One Road Initiative?

As the above discussions show, OBOR is a broad economic and geostrategic project that allows China to connect itself with almost the entire world. It has had many supporters in the form of nation states who are suspicious of the hegemonic influence of the western bloc. However, the project has very recently raised a lot of critical voices in many of the participating countries. The allegation is that China is essentially following a “debt-trap” model of economic investment that involves exerting control over significant strategic public-sector assets such as ports when countries fail to repay their loans. The funding provided to countries like Sri Lanka, Pakistan etc are not unconditional grants from the Chinese government but has come in the form of loan-based funding to various companies. Gwadar port in Pakistan has received heavy investment from China and has also seen the increased movement of the People’s Liberation Army (PLA)Navy in spite China’s assurances that the CPEC and associated projects between the two countries were merely economic in nature. Another example is the recent acquisition of a Sri Lankan port in the town of Hambantota by a state owned Chinese company through a 99-year lease. This has been stated as the addition of “another pearl to China’s string” and the pattern is beginning to ring alarm bells. Countries such as Nepal, Sri Lanka, Pakistan and even Mexico have announced the scrapping of certain projects or the drastic reduction of involvement of Chinese funding in these projects.

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Is the One Belt One Road (OBOR) Initiative  the road to Domination for China?

The road to domination is never easy and it seems as though this principle will hold true for China as well. OBOR has created the structural outlines for a broad coalition of eastern actors to challenge the influence of the west. China plans to be the leader of this new international economic order while at the same time securing its strategic interests as best as possible within the legal diktats of international law. Its strategy is a unique and well thought-out one but it does leave certain close neighbours slightly suspicious of its intentions. Countries such as India and Japan are yet weary of China’s growing dominance and increasing territorial assertiveness. Regional powers such as India are closely monitoring China’s meteoric ascent. It will be very interesting to see how the foreign policy of other Asian countries change viz.a.viz the PRC, especially now that China is being accused of pursuing economic policies that expose the host countries to a vicious debt cycle. Although most of the countries have on the whole accepted their offer for generous investments, it remains to be seen if the PRC can exert the kind of economic and diplomatic clout over a long-term period to achieve an unchallenged rise to a position of regional and global dominance.

Featured image – Mekong Eye

What impact do you think will India have of China’s One Belt One Road Initiative? Let us know in the comment section.

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