India, China and Belt and Road Initiative: This is what will likely happen now

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October 16, 2017 4:46 AM

The weight other South Asian countries attach to the Chinese influence is much larger than they attach to frictionless ties with India, given these countries also run trust deficits with India.

The issue of sovereignty in determining the prospects and credibility of connectivity initiatives became evident again with respect to the Belt-and-Road Initiative (BRI) in Asia. (PTI)

The issue of sovereignty in determining the prospects and credibility of connectivity initiatives became evident again with respect to the Belt-and-Road Initiative (BRI) in Asia. At a trilateral meeting of external affairs ministers on the sidelines of the UN General Assembly last month, US and Japan backed India in calling for regional connectivity plans based on international norms, prudent financing and respect for territorial sovereignty. Endorsements by the US and Japan were taken as vindication of the Indian reservation on China’s BRI. However, territorial sovereignty might not be the deciding factor for many other countries in locking on to connectivity initiatives. This was evident from the recent statement of the Bangladesh foreign secretary at Delhi, where he confirmed Bangladesh’s commitment to the BRI and emphasised that there are occasions on which economic considerations outweigh sovereignty.

The approach to China’s BRI till now has been characterised by contrasts. India leads opinions that are pessimistic about the BRI. While the latter directly pertains to India’s territorial concerns, the US, Japan and Europe are, at varying degrees, concerned over multiple aspects of the project. A large part of these concerns, particularly for the US and Japan, relate to apprehensions over BRI institutionalising a China-centric regional order. Europe has mixed views on the project. While lacking a continental view on BRI’s advancement of a China-centric order, given that European countries like Greece, Hungary and Poland are heavily enthusiastic about BRI, movers and shakers of the European establishment are wary over its commitment to institutional norms and nature of project financing. These views contrast with the great appetite for BRI in several other parts of its geography, particularly in Southeast, South and Central Asia. The Bangladesh response to BRI symbolises this enthusiasm.

The enthusiasm for BRI is not difficult to explain. BRI has been projected by China as not only a plan for building rail, road and ports across vast swathes of land and sea, but also as a programme that would connect countries digitally and culturally. The ‘Digital Silk Road’ is an alluring prospect for countries that are waiting to latch on to the exciting prospects of e-commerce. People-to-people linkages—one of China’s major diplomatic thrusts for global engagement for several years now—are also driven deep into the agenda for BRI. For most countries in Asia and Africa, and even for some in Europe, BRI signals money, mobility and modernisation assured by a generous lender.

Money talks and China is making it talk as well as it can. South Asian countries like Bangladesh, Sri Lanka and Nepal are aware of the pitfalls of locking on to BRI. Apart from the geostrategic downside of irking China by staying out of the project, building infrastructure through BRI might involve much greater costs than are currently envisaged. The Sri Lankan experience points to the long-term implications of Chinese soft loans and investments that extract commercial and strategic prices. But notwithstanding such knowledge, the rest of South Asia is not in a position to turn their backs on BRI. China’s gigantic economy, strategic clout and the almost fantastic investment that it has committed to the BRI, which by some estimates run into trillions of dollars, are too strong and heady to even contemplate rejection.

South Asian countries in India’s neighbourhood also need to reconcile to the fact that for Chinese investments, it is no more a question of following the signals of political commitment. While the Chinese top leadership might commit several billions in many countries as a mark of China’s commitment to their development, actual investment by Chinese companies would only follow after careful assessment of risks involved. Like all other global investors, Chinese companies have become increasingly wary of risks to their investments in countries that have weak governance and poor institutions. Adding political instability, which never really deserts most South Asian countries, Chinese investors would be careful and all that has been promised might not materialise.

Nonetheless, the BRI will continue to advance as a vision and project that would increase the strategic gulf between China and India in South Asia. Except Pakistan, all other South Asian countries will be trying to perfect the art of ‘balancing’ China and India on the BRI. This difficult act would call for deft diplomacy on part of all countries. China, and needless to say India, would try to match each other in strategic influence over the region. The fact that the rest of the region has not backed off from the BRI despite noting India’s territorial concerns means they have not been convinced about BRI being a new ‘colonial enterprise’—an impression that India sought to forcefully convey when it refused to attend the BRI Forum at Beijing in May this year. Or, as is possibly more likely, despite being convinced, the weight to the Chinese influence is too much and too large for these much smaller countries that also run trust deficits with India. South Asia would no more be the same after BRI as China and India sniff and scowl over it.

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