OBOR impact: Why China’s cheer may bring tears out of US, Pakistan and others

By: |
New Delhi | Updated: April 18, 2018 3:41:02 PM

China's ambitious Belt and Road Initiative (BRI), which is also known as 'One Belt, One Road' (OBOR) project, has sparked fears of many kinds in the international community.

xi jinpingChinese President Xi Jinping delivers a speech as he reviews a military display of Chinese People’s Liberation Army (PLA) Navy in the South China Sea April 12, 2018. Picture taken April 12, 2018.(Reuters)

China’s ambitious Belt and Road Initiative (BRI), which is also known as ‘One Belt, One Road’ (OBOR) project, has sparked fears of many kinds in the international community. It is apparent that the Chinese want to use the project to increase its influence in the world along with its ever-growing economic and security prowess.

A top American admiral has warned his country that China would be in a position to leverage the BRI projects to force countries for not granting military bases to the United States.

“China’s expanding global interests, especially its Belt and Road Initiative-associated projects, have Beijing increasingly looking beyond the region,” Admiral Philip S Davidson, nominee for US Pacific Command Commander, was quoted by PTI as telling the Senate Armed Services Committee.

“China is expanding its access to foreign ports to pre-position the necessary logistics support required to regularise and sustain deployments in the Indian Ocean region. This larger overseas logistics and basing footprint will enable Beijing to project and sustain military power at greater distances from China,” Davidson added.

Davidson pointed out that the “predatory nature” of the loans sanctioned by Beijing for many BRI projects leads him to believe that Beijing is using the OBOR initiative to “coerce” states into greater access and influence for itself.

The US admiral said the BRI would provide China opportunities to expand its global military reach and extend its “striking and surveillance operations from the South China Sea to the Gulf of Aden.”

Fears for Pakistan

Even as Pakistan has not acknowledged what it stands to lose by participating in the OBOR project, there are fears that the country can’t ignore.

A study by non-profit US-based research group C4ADS suggests the real motive behind OBOR is to spread China’s political influence and the presence of its military.

Beijing is developing the China-Pakistan Economic Corridor (CPEC). The report says “actual transparency and specificity regarding CPEC-related investments is highly limited.”

The project’s productivity is expected to be equivalent to 17% of Pakistan’s 2015 gross GDP and it may create 700,000 jobs. These numbers are, however, “highly speculative” as very few credible studies have been conducted on structures and economics of CPEC deals.

The report notes that recently State Bank of Pakistan’s governor had said, “I don’t know out of the $46 billion how much is debt, how much is equity, and how much is kind.”

According to the study, “CPEC projects, including Gwadar, disproportionately favor China while unfavorably burdening Pakistan in the long term.”

Pakistan could land in Chinese debt trap as around 80% of “CPEC investments will likely require Chinese financing, for which interest rates are likely to be high.”

IMF chief Christine Lagarde had recently feared that BRI may drive debt in the region and urged China to improve transparency on its decision making on the project.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1US Commerce Dept finds aluminum sheet imports from China subsidized
2Stormy Daniels reveal sketch of man who threatened her over US President Donald Trump
3President Donald Trump says US and North Korea talking at ‘extremely high levels’