Tuesday, July 5, 2016
The New Trade Routes: Silk Road Corridor
May 9, 2016
India watches anxiously as Chinese influence grows
Talk of a new Silk Road may be intended to evoke romantic, non-threatening images of desert caravans, ancient ships and trade in exotic commodities. But China’s grand plan for a network of railways, highways, pipelines and ports across central Asia, and around Southeast Asia is generating anxiety in New Delhi.
With the 3,488km border between the two Asian neighbours still a matter of formal dispute, Indian strategic policy analysts are divided on whether China’s new Silk Road project is a strategic and economic threat to their country — or an opportunity. Many see the project — which the Chinese have called One Belt, One Road (OBOR)— as something that must be carefully navigated, as Beijing develops large projects in countries that India considers part of its natural sphere of influence. However, New Delhi lacks the financial power to offer a credible alternative.
“The Indian government is very careful about the way it handles the China rhetoric, and it isn’t ready to come out arms swinging against OBOR, but it is sitting with its arms folded making it very clear that it will not endorse the project if it doesn’t like the way it was put together as a Chinese fait accompli,” says Shashank Joshi, a senior research fellow at the Royal United Services Institute, a British defence and security think-tank.
“They cannot be seen to be outwardly hostile to a scheme which many smaller Asian neighbours view as a good opportunity for large flows of Chinese capital that India cannot deliver,” he says.
Brahma Chellaney, professor of strategic studies at New Delhi’s Centre for Policy Research, sees China’s new Silk Road initiative as a repackaging — in more palatable terms — of China’s so-called “string of pearls” strategy, which India views as an attempt to strategically encircle it.
The “string of pearls” theory argues that Chinese investment in ports in south Asia is a precursor to developing overseas naval bases. China has, for example, already built a major port at Hambantota in Sri Lanka, which overlooks important shipping lanes that carry much of the world’s oil trade, and which India views as strategically important for its own defence.
“The new Silk Road is just a nice new name for the strategy they’ve been pursuing,” says Mr Chellaney. “They’ve wrapped that strategy in more benign terms. The Chinese dream is pre-eminence in Asia, and this goes to the heart of that dream.”
“It’s not just a trade initiative,” he says. “What China is doing has a strategic element that is increasingly obvious.”
India is most exercised about plans for a $46bn economic corridor linking China and Pakistan, India’s nuclear-armed neighbour and rival. That blueprint envisions goods travelling from China’s western region to Pakistan’s Gwadar, a once sleepy Arabian Sea port now run by the China Overseas Port Holding Company. It is considered a staging point between central Asia and the Gulf.
Part of the corridor will pass through Pakistan-held Kashmir, a territory that is still the subject of a decades-old, unresolved dispute between India and Pakistan. Indian analysts say that acceptance of the corridor would effectively acknowledge Pakistan’s rights over the territory now under its control, while India’s own claims over Kashmir have yet to be resolved — something New Delhi considers unacceptable. “This is a large scale project bringing People’s Liberation Army personnel [said to be guarding some project locations] right into the heart of what India considers to be occupied territory,” Mr Joshi says.
At a recent conference in Gwadar, Pakistan’s Army Chief, General Raheel Sharif, accused India of deliberately attempting to undermine the project. “India, our neighbour, has openly challenged this development initiative,” he said. “We will not allow anyone to create impediments or turbulence in any parts of Pakistan.”
But wary as India may be of Chinese ambitions, analysts say New Delhi needs to take a measured approach to the new Silk Road, and embrace individual components.
India is already a member of the Chinese-led Asian Infrastructure Investment Bank, which will finance much of the infrastructure, potentially giving it some leverage over how the plan unfolds.
“For every belt they create, and every road that we create, can we create a slip road that connects Indian opportunities to the larger global market rather than reject it outright?” asks Samir Saran, of the Observer Research Foundation. “Can we . . . use their institutions to our own advantage?”