CHINA’S BRI INITIATIVES & ESCALATION IN INDO-CHINA RELATIONS – ROADMAP FOR THE FUTURE REALIGNMENT
The Escalations
We have been taking for granted geopolitical stability in Asia for the past 30 years, since Soviet Union’s collapse. Today, major conflicts are in Asia, the largest economic and most populous region. Which forces will prevail? Will it be the silk roads or the great game? The silk road stands for peaceful commerce and cultural exchange. The great game stands for territorial rivalry and competition. while BRI has been around for 5 years, China has been building roads for 25 years in order to win great game to leverage, influence and manipulate countries. Everyone is depending on China and it doesn't control any of the geography and that’s why BRI began, as defensive strategy to upgrade terrible infra. Now China is powerful so defensive investments in smoothing supply chains became offensive strategies. China is not having 1000-year vision and plans 10 steps ahead and playing chess mapping out counter manoeuvres. Truth is China is improvising. BRI begin as something innocent and defensive is now viewed as much broader kind of plot which is pure improvisation and great game. China miscalculated because they don't understand their own 14 neighbours, let alone the world. For China, it's incredibly complex, dizzying to understand, calculate the reactions and manoeuvres of 14 countries at the same time but almost all of them are highly suspicious of China. We have to stop treating China as special or hyperintelligent or super strategic. China is very prone to error, miscalculation, hubris, arrogance that you expect of superpowers and empires throughout history. then there's Pakistan which is actually China's ally. Pakistan remembers all their experiences with foreign powers never ended well.
China-pakistan Corridor Expansionism
China-pakistan Economic Corridor (CPEC), within BRI context goes back 60 years. Karakoram Network goes back to pre-1962 war and history there precedes CPEC. The upgrading of the Karakoram was China’s desire to alternative corridors to reach the Arabian Sea and similar to using Myanmar to reach the Bay of
AFTER COVID, THERE IS GLOBAL SUPPLY AND DEMAND SHOCK AND SUPPLY CHAINS DISRUPTIONS. COUNTRIES THAT RECOVERY FASTER ARE WITH LARGE DOMESTIC MARKETS AND ARE SELF-SUFFICIENT
Bengal to avoid the Straits of Malacca. Earlier, CPEC focus was energy, transportation and industrial projects. Now CPEC has cut half of the $60 bn. There will be fewer power and road projects. Roads traverse POK Kashmir and they will continue to build, but it's hard to push back China. For India, it is unrealistic even to go and fight another war with China and Pakistan.we should settle these disputes, because you can win a battle but not the war. China is going to continue with its plans of expansionism to diversify geographically. Chinese central and western provinces are growing at a very high rate moving the BRI linkages to Europe and westward across Russia and Kazakhstan. Within BRI, it not East versus West as China wants to have full, total dominant territorial integrity. Pakistanis have their suspicions and concerns about how CPEC is playing out, they don't want to be in a debt trap. So they will continue with China.
India’s Response
Strategic response to China's BRI includes India role in the quad (India, US, Japan, Australia), supporting the maritime domain where India also has great geographical strengths and advantages. The quad is going to play a very decisive role in limiting Chinese hegemony. China has taken cer tain islands in the South China Sea from Philippines and Vietnam. The quad should limit China's further expansionism and India will be making sure that China does not dominate the Indian Ocean. India has a foothold in Gwadar and elsewhere, the military strategy towards ensuring a multipolarity in Asia is going to succeed. On economic and the supply chain, Trump is talking about a G10, the British a D10, to make sure that sensitive supply chains like 5G, medical devices are pulled away from China. India has to focus by capturing supply chains, moving production and trade with Southeast Asia. India should build ties with the RCEP to boost its trade and investment ties, capturing on its pharmaceutical, its technology stack, sovereign stack to fully produce indigenously the technology infra in AI and telecoms without the risk that all of your data is going to Beijing. Beyond roads and power, is water, like doing very large Chinese-style canal projects linking the rivers, which take a lot of time. Agriculture and food security is paramount. China has been focusing on its own nation building for 40 years. If India wants to be confident leader regionally and globally, its self-sufficiency and not in the Nehruvian kind of way. Government and private sector should step up. We're reading things that Reliance Jio is doing every day. When we talk about China, it has a good four or five mega corporations Baidu, Ali Baba, Tencent. Where are India's 500 significant systemically relevant pro investing mega companies?
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Politics of Infra
India has committed more budgets to infra. FDI is hard to get due to the crossborder approvals for projects. We know the obstacle for 75 years now and can fix it without political excuses. The failure is not because India's democracy, it's about political will, coordination and continuity. It's not the fact that we're not like China. Direction and consensus around infra is the foundation in many ways of national unity. these projects have to be done with local sensitivities and it’s extremely important that you need local feedback. The local communities know many things and it is this healthy approach to getting some of these large-scale infra done. Europe agreed in 1950s that they are going to have robust state-funded highways and railways and built it. There are two kinds of countries, those that do it and those that don't do it. So it's not China's fault that India is having a difficult time paving the way for Japanese sor t of projects to be executed.
After Covid, there is global supply and demand shock and supply chains disruptions. Countries that recovery faster are with large domestic markets and are self-sufficient. Identifying those vulnerability to imports disruptions is critical.we need food, financial security and better logistics to have circulation, consumption. Replacing crude oil imports when India is abundant in gas by exploring and developing its gas supply, solar, wind, bio mass, hydro. When I'm looking at in developed economies and look at the bottom-50% population to always have the benefits of inclusion, technology, education, transportation. India’s bottom-80% are in such a precarious economic circumstance. For India its difficult especially with the currency being so devalued and needing to import so many things, So Make in India beyond have to be much broader. while India is not going to match China’s pace in anything, the priority for India is to build-build-build infra but also strengthening the local capacity. We should always be thinking 10 years ahead on the technologies that will be mainstream and how can cheaply deploy them now, in decentralized fashion, as possible to serve the entire geography. For India, these are simple principles to follow and the right policies is derived from those principles.
Digital Silk Road
It is not either or.you need all the layers of infra, including digital. China has been developing Digital Silk Road on top of BRI. Ali Baba is not just a E-commerce company. It's built on the back of the physical logistics infra, underpinning the bricks and mortar. In India, whether it's Flipkart or their competitors, unless there is physical logistical efficiency, its not going to deliver maximum value if you don't have 4G-5G and the penetration along with the apps, the payments, the cloud, you're not going to be really achieving the digital potential.
Yes, India needs to digitize domestically while it does, offer internationally. Indian telecoms like Airtel are already in Africa and elsewhere. It’s not an issue of demand in these countries for telecom and digital infra or services for cloud.why is Ali Cloud all over the place? Again, it's not China's fault. India can have political edge in AI because it can do as a service as it already has in SAAS all over the planet Earth complying with local laws, not steal the data. To leverage its strength in digital, India already has demonstrated for decades political favorability of working with it. India should be far more diplomatically and commercially aggressive now.
BRI 2.0
The subject is not BRI. We are talking infra finance cross-border in Eurasia. BRI is one program that contributes to that broader goal of cross-border finance in Eurasia. In Eurasia, there are 6 bn who live share this goal from Portugal to Shanghai
TO LEVERAGE ITS STRENGTH IN DIGITAL, INDIA ALREADY HAS DEMONSTRATED FOR DECADES POLITICAL FAVORABILITY OF WORKING WITH IT
from Moscow from Norway to Tamil Nadu. Everyone is actually doing their own version of the silk roads. India is talking to Iran and Azerbaijan and Russia about a north-south corridor for 25 years now. India has been talking about the TAPI Pipeline. The more roads you build the less likely that it leads to China. Infra finance is bigger than BRI and BRI will be diverse in terms of big projects, money and dominance in some geographies. Anything India contributes to is an important part of that finance and it should pursue its interests. What China is doing benefits India in Afghanistan.
Take the case of Hambantota Port which I blame India because Sri Lanka wanted India and then China did it. So we should never make a straight line projection saying China build this, therefore China will own this and will dominate that country because geopolitics is not linear, very complex. Again, that brings us back to where we started which is this backlash against China's happened very quickly because we do have very rapid response.