Why China may run into roadblocks in its New Silk Road in South Asia - I
by Ramtanu Maitra on 03 Aug 2019 1 Comment

With the four-decade-long rapid rise of China as a world power beginning in the 1980s and continuing through the first two decades of this millennium, after decades of virtual political and economic stagnations under Chairman Mao Zedong, it became essential for China to develop a new and wide-ranging strategy to sustain what it has achieved and make long-term plans that are neither time- nor goal-defined to strengthen its future. In light of the massive military presence of the United States throughout Asia’s Far East and the Middle East, Chinese strategy has had two objectives - first, to keep its trade routes undisturbed and develop new trade routes that will remain fully under China’s control, denying the potential of foreign interference; and, second, to ensure physical security to China as a geographic entity as well as to the new land-based and existing maritime trade routes it has developed.


During a September 2013 visit to Kazakhstan, China’s President Xi Jinping announced the idea of a Silk Road Economic Belt. A month later in Indonesia, he expanded the project, putting forth the idea of a 21st-Century Maritime Silk Road. In November 2014, the Chinese government announced the creation of a new Silk Road fund ($40 billion) at the Asia-Pacific Economic Cooperation meeting in Beijing. And in March 2015, China’s National Development and Reform Commission, Ministry of Foreign Affairs and Ministry of Commerce jointly and officially announced the “One Belt, One Road” initiative (BRI). Within the following months specifics of the initiative were revealed. (China Reclaims World Power Status: Putting an End to the World America Made: Paolo Urio: Routledge: 2018)


The stated objective of China’s Belt and Road in South Asia - as elsewhere - is to help South Asian nations build basic infrastructure, weighted to favor road, power and rail, that would enable China to get closely linked up with this population-dense part of Asia and also contribute constructively to these nations’ economic and commercial development. The link-up would provide China with accesses to the Indian Ocean - a major maritime trade artery for China and the rest of Asia. India has not endorsed the program, and therefore is not involved; but Pakistan, Myanmar, Nepal, Bangladesh and Sri Lanka all have BRI projects ongoing at one stage or another.


Belt and Road: Questions Raised


Following Xi’s unfolding of the One Belt, One Road plan in 2013, questions have been raised about what truly lies behind China’s stated efforts to recreate the old Silk Road. The plan, according to Beijing, is simply to ensure that China develops some land-based and maritime routes to link up with countries with whom it needs to enhance trade and economic interactions. It is also a benevolent effort to help economically weaker nations build up basic infrastructure that could lay the foundation for their well-being and help strengthen economic ties with China in the future. 


But some have questioned whether the aim isn’t to expand and overwhelm some of the nations, particularly the smaller ones, and establish China as the dominating foreign power to look up to, thus weakening the influence of other foreign powers, such as the United States, in those countries. Others argue that by developing a direct land link and/or a maritime link, by setting up an economic web and putting in place security-related agreements, China is lubricating the process of establishing military installations in those countries in the future. This is perhaps partly based on the Chinese observation that the weakening of the West’s economic foundations is very much in progress and that a time will come when China will be recognized for its deserved position in this world.


At the same time, the immediate benefits for China from the Belt and Road must be acknowledged. Its success will immensely help in resolving a critical problem, namely the lack of development in China in regions distant from the country’s main development centers. As Paolo Urio points out in his book, the BRI aims to reduce China’s regional development gaps that had already started during the third stage of China’s development (1999–2013). It is interesting to note that BRI involves all four of China’s economic blocs, comprising 25 provincial-level administrative units out of a total of 31. For the Road Belt, areas included are: Heilongjiang, Liaoning, Jilin, Henan, Jiangsu, Shaanxi, Gansu, Qinghai, Ningxia, Sinkiang, Chongqing, Sichuan, Yunnan, Guangxi, Tibet and Inner Mongolia. For the Maritime Road: Zhejiang, Fujian, Guangdong, Shanghai, Hainan, Liaoning, Tianjin, Shandong and Guangxi. (China Reclaims World Power Status: Putting an End to the World America Made: Paolo Urio: Routledge: 2018). 


From that perspective alone, China’s objective in the BRI should be understandable to New Delhi. India’s inherent inability during the more than 70 years since independence to develop the vast northeast, where seven Indian states together touch five foreign nations with each state having one or more international boundaries, led the late, former Prime Minister P.V. Narasimha Rao to come up with his “Look East” policy in 1991. Rao’s plan was to hook up these Indian states through infrastructure with Myanmar, Thailand and other Southeast Asian countries to achieve rapid economic development. Today Prime Minister Narendra Modi has advanced the cause by upgrading the “Look East” policy to the “Act East” policy in 2014. Though the initiative has not borne the fruit that China’s developmental plans have achieved since President Xi’s declaration to launch BRI, “Act East” is still very much in India’s playbook.


Belt and Road: A Vast Network


China has defined five routes for the BRI: three for the Road Belt, and two for the Maritime Road. The first land route goes from northwest China and northeast China to Europe and the Baltic Sea via Central Asia and Russia; the second goes from northwest China to the Persian Gulf and the Mediterranean Sea, passing through Central Asia and West Asia; and the third from south-west China through the Indochina Peninsula to the Indian Ocean. The first maritime route starts at the coastal ports of China, crosses the South China Sea, passes through the Malacca Strait and reaches the Indian Ocean, extending to Europe; and the second starts at the coastal ports of China, crosses the South China Sea and extends to the South Pacific. 


Within the framework of the five routes China has proposed six corridors, six means of communication, multiple countries, and multiple ports. The six corridors are: the New Eurasian Land Bridge Economic Corridor, the Russia Economic Corridor, the China-Central Asia-West Asia Economic Corridor, the China-Indochina Peninsula Economic Corridor, the China-Pakistan Economic Corridor and the Bangladesh-China-India-Myanmar Economic Corridor. The six means of communication concern rail, highways, seagoing transport, aviation, pipelines and an aerospace integrated information network, which comprise the main targets of infrastructure connectivity. (China Reclaims World Power Status: Putting an End to the World America Made: Paolo Urio: Routledge: 2018)


Of interest for this article, however, is a discussion on the prospects for success of the China-Pakistan Economic Corridor that connects the Road Belt (from Kashgar-Xinjiang Autonomous region) to the Maritime Road in Gwadar, a port city on the southwestern coast of Balochistan, Pakistan and the Bangladesh-China-India-Myanmar Economic Corridor. The latter includes the development of all BRI projects in Myanmar, such as the Kyaukphyu deepwater port, the Kyaukphyu-Kunming high-speed railway, special economic zones and natural gas pipelines.


In addition, the impact of events within BRI, and beyond, on the South Asian population in creating a negative environment for China will be discussed. For instance, China’s non-transparent policy toward the Uyghur community in Xinjiang has raised concerns among the Islamic countries. While at the governmental level, these countries may not like to antagonize China, their Muslim citizens may feel and act differently toward Chinese who come to help build that country’s infrastructure.


A similar situation is developing vis-à-vis Myanmar, an important BRI country for China to secure access to the Bay of Bengal and Indian Ocean. Deep-rooted anti-Muslim prejudices among a significant section of Buddhist chauvinists have led to violence against the native Rohingya Muslims, tacitly backed by a section of the Myanmar military in the state of Rakhine, the very state through which China is developing its infrastructure and planning to build a port and a special economic zone to optimize access to the Bay of Bengal. The persecution of Rohingya Muslims who have been uprooted from their homes and were quartered along the Bangladesh-Myanmar borders has created a potential law and order bomb that could go off at any time, Bangladesh worries.


Whether Beijing will attend to Dhaka’s request to persuade Naypyitaw to stop persecution of the Rohingyas and give them the status of legal citizens in Myanmar is moot. What is almost a certainty, however, is that Myanmar authorities’ persecution of the Rohingyas and their unwillingness to take the initiative to stop it may lead China to become identified by the international Islamist Jihadis as yet another powerful anti-Muslim nation that endorses persecution of Muslims. China will find that such branding will have altogether a much broader international impact than what accompanied the persecution of Tibetans carried out by China following its annexation of Tibet in 1959. This could also impede China’s ability to earn the trust of the population of Muslim-majority Bangladesh - a country China is courting to get land access through to the Bay of Bengal by developing its main port in Chittagong, help building a new port at Payra and strengthening Bangladesh’s power structure.


China Pakistan Economic Corridor 


Inclusion of China-Pakistan Economic Corridor (CPEC), which enters Pakistan from China’s Xinjiang province through parts of Pakistan-occupied Kashmir, in the BRI demonstrates China’s lack of concern for India’s views and interests in its drive to get what it wants. As Beijing well knows, New Delhi considers that the state of Jammu and Kashmir belongs to India and that Pakistan has unlawfully occupied about a third of it. Pakistan states the opposite. Whether China believes that India’s claims are justified or not, what was minimally necessary for China was to consult India and discuss the corridor’s proposed entry to Pakistan through Gilgit and Baltistan before launching the CPEC since India is a neighbor and by no means a pushover in the economic, political or military fronts.


Perhaps China’s fear that, if consulted, New Delhi would reject the route and its urgency of securing a port in Pakistan’s landmass close to the Strait of Hormuz, caused this breach. Beijing went pell-mell in developing the CPEC. Though problems have begun to emerge, slowing down progress, China now has full access to Gwadar Port on the Makran coast and is building it up as a virtual Chinese enclave. What other objectives this port will serve China in the future besides being a major transshipment location, are anyone’s guess.


In addition to developing the port, China-Pak Investment Corporation has bought a 3.6-million square foot “International Port City” to house the Chinese workforce and will establish a financial district and build a gated community for the anticipated 5,00,000 Chinese professionals who will be located there by 2022, according to The Economic Times. The proposed city will house the Chinese workforce. (As part of CPEC, ‘Chinese only’ colony coming up in Pakistan: Dipanjan Roy Chaudhury, The Economic Times: Aug 21 2018) Though China has denied this report, it is evident that given its growing relations with the African nations, in general, and the Middle East, China is bound to make sure that the Indian Ocean - the trade routes to these two areas of great importance - remain under its close watch.


By itself, the CPEC would be a fine project - if Pakistan had the economic means to build on the infrastructure that China is putting in place at a cost. The cost ensures Pakistan will inherit about $60 billion in loans, which with interest will turn out to be much higher. As it is, Pakistan has a serious debt-payment problem and seeks IMF bailout from time to time. This tidy bale of loans that China is putting on Pakistan may not break the proverbial camel’s back, but will surely strain it further. More importantly, if Pakistan does not have the money, or can’t produce any amount of cash magically, to invest generously to optimize the utilization of the roads and railroads that China is planning to build, CPEC will fail to be of much benefit for the Pakistani people.


In addition to the financial problems that could delay benefits from the CPEC, there is one other challenge: the economic corridor, whose western route leads  directly to Gwadar Port, runs through a vast landmass where insecurity prevails. Pakistani officials point out that large sections of the population, mostly based in the province of Balochistan, are openly against the construction of the CPEC and are involved in sabotaging efforts aimed at bringing foreign investments and integrating Balochistan with the rest of Pakistan. Balochistan has remained volatile since the inception of Pakistan in 1947, and some of its people are steadfast in seeking separation from the country. The decades-long instability in Afghanistan that borders Balochistan, and the consequential growth of terrorism in the area, has further made the area highly insecure. (China-Pakistan Economic Corridor: The Challenges: Ramtanu Maitra: EIR April 15 2016)


During the construction stage, insecurity poses a significant threat to the Chinese workers and technicians involved with the project. Islamabad is aware of these problems and has assured China it will provide protection, asking Beijing to ensure that security officials have prior knowledge of the movement of Chinese personnel in the construction area. In addition, Pakistan has established a Special Security Division comprising nine composite infantry battalions (9,000 personnel) and six civilian armed forces wings (6,000 personnel) to be headed by a serving major-general of the Pakistan Army. (17,177 soldiers deployed for security of Chinese workers of CPEC: The News: Mehtab Haider: December 15, 2015).


One would expect that such measures would ensure security, but they may not. Continuing violent incidents in Balochistan suggest the security of the CPEC, and the Chinese personnel working there, is less than certain.


In addition to security concerns, Pakistan’s small and medium-size industries also have expressed fears that those industries may come under pressure because of cheaper and plentiful imports from China that are further facilitated by the fully-operational CPEC. Atif Iqbal, executive director of the Organization for Advancement and Safeguard of Industrial Sector, told Pakistan’s news daily, The Express Tribune, that the Free Trade Agreement with China had not been favorable to Pakistan. “It is imperative for the government of Pakistan to keep in mind all these factors while negotiating the second phase of the FTA with China,” he said. Iqbal is of the view that in talks with China some leverage should be provided for Pakistan’s products to enable the local industry to compete well in the race. (CPEC project: Nascent industries afraid of big Chinese firms: Peer Muhammad: The Express Tribune: Nov 20, 2016)


(To be concluded …) 

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