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China's Maritime Silk Road Initiative and South Asia A Political Economic Analysis of Its Purposes, Perils, and Promise by Jean-Marc F. Blanchard
China's Maritime Silk Road Initiative and South Asia A Political Economic Analysis of Its Purposes, Perils, and Promise by Jean-Marc F. Blanchard
IN ASIA-PACIFIC
POLITICAL ECONOMY
Edited by
Jean-Marc F. Blanchard
Palgrave Studies in Asia-Pacific Political Economy
Series Editor
Jean-Marc F. Blanchard
School of Advanced International and Area Studies,
East China Normal University,
Shanghai, China
Mr. & Mrs. S.H. Wong Center for the Study
of Multinational Corporations, Los Gatos,
California, USA
Aim of the series
The series aims to publish works, which will be meaningful to academics,
businesspeople, and policymakers and broaden or deepen their knowledge
about contemporary events or significant trends, or enable them to think
in new ways about the interaction of politics and economics in the
APR. Possible candidates for the series include topics relating to foreign
direct investment, bilateral investment treaties, multinational corpora-
tions, regional economic institutions, technology policy, economic global-
ization, corporate social responsibility, economic development strategies,
and labor movements.
In November 2015, the Mr. & Mrs. S.H. Wong Center for the Study of
Multinational Corporations (Wong MNC Center), a US-based think tank
focusing on the political economy of multinational corporations in/from
East Asia, and East China Normal University (ECNU)’s School of
Advanced International and Area Studies (SAIAS) orchestrated a very suc-
cessful international academic conference in Shanghai entitled “The
Political Economy of China’s Maritime Silk Road Initiative and South
Asia” which gathered academics, consultants, and researchers from
Australia, China, India, and the United States of America to present their
latest research findings about and discuss topics such as the goals, imple-
mentation, and implications of the MSRI. Seeking to go beyond past
treatments of the Maritime Silk Road Initiative (MSRI), which have often
been subsumed within overly general discussions of China’s One Belt,
One Road (OBOR) initiative, workshop participants focused only on the
MSRI, examined specific country pairs like China’s MSRI and Pakistan,
China’s MSRI and India, and China’s MSRI and Sri Lanka, and under-
took deeper political economic analysis than most other analysts do. The
results of that conference are embodied in this book, which represents one
of the most in-depth contemporary treatments of the MSRI.
There are many who merit acknowledgement for their contribution to
the aforementioned conference as well as this book. At the institutional
level, I would like to thank ECNU and, above all, ECNU SAIAS where I
currently serve as Distinguished Professor, for their financial and adminis-
trative support for the November 2015 event and this multi-year project
on China’s MSRI. Beyond this, I would like to thank the Wong MNC
vii
viii PREFACE AND ACKNOWLEDGEMENTS
Center for its vital managerial, financial, and administrative support for this
project, a topic which the Wong MNC Center Board of Directors imme-
diately recognized has great importance to multinational corporations in
and from East Asia and is pervaded by political economic dynamics.
In terms of individuals, Professor Liu Jun, ECNU SAIAS Dean, was a
vital backer of the aforementioned conference and from the get-go
expressed ECNU SAIAS’s willingness to host it and contribute resources.
I also would like to thank my colleagues Professor Zang Shumei and Ms.
Chen Jing who ably dealt with a slew of conference matters. All the par-
ticipants in the November 2015 event, many of whom are contributors to
this book, deserve appreciation for their intellectual contribution and
enthusiastic participation. I would like to express my gratitude to Professor
Yang Jiemian, former President of the Shanghai Institute of International
Studies, Ambassador Liu Youfa, former Consul General of the People’s
Republic of China in Mumbai, Professor Feng Shaolei, former Dean of
the ECNU SAIAS, Professor Zhang Cuiping, Deputy Director, Research
Institute for Indian Ocean Economies, Professor Shi Yinhong, and
Professor Zheng Yu for taking time out of their busy schedules to partici-
pate in the November conference. Special thanks are due to Professor
Yang and Ambassador Liu for giving very informative keynote speeches.
Professors Colin Flint and Gregory Moore also deserve special acknowl-
edgement for their yeoman’s discussant work providing content on
numerous papers delivered in Shanghai. Professor Flint also warrants spe-
cial mention for his guidance on and involvement, as advisor, editor, and
contributor, in a special section of Geopolitics (entitled “The Geopolitics of
China’s Maritime Silk Road Initiative”) in which a few of the conference
papers appeared. I look forward to opportunities to work with Colin in
the future. Finally, Dr. Bas Hooijmaaijers, my new colleague at ECNU
SAIAS and the new Assistant Director of the Wong MNC Center, merits
kudos for his excellent work in assisting with the production process for
this book. I look forward to many years of collaboration in the future. Ms.
Chen Yifan’s efforts in support of the production of the book are also
much appreciated.
Contents
ix
x Contents
Index 229
List of Figures
xi
List of Tables
xiii
CHAPTER 1
Jean-Marc F. Blanchard
Introduction
In 2013, People’s Republic of China (PRC) President Xi Jinping put forth
two separate initiatives, the Maritime Silk Road (MSR) initiative (MSRI)
and the Silk Road Economic Belt (SREB) plan, both integral components
of the Chinese mega-project known as One Belt, One Road (OBOR). It
is far from a foregone conclusion that China’s two ambitious plans will
yield what Beijing wants them to deliver economically or politically or that
both projects will be fully realized. Regardless, it is hard not to be capti-
vated by the two schemes given their immense scale and potentially trans-
formative effects on power hierarchies, global, regional, and subregional
institutions, individual countries, and multinational corporations (MNCs).
As well, top PRC decision-makers have made abundantly clear that OBOR
is a top Chinese-government policy priority.1
To date, scholars have provided background on OBOR, assessed its fit
with China’s grand strategy, and probed its links to China’s energy security.
In addition, they have considered OBOR’s implications for the PRC’s bilat-
eral relations and global security, examined the economic issues associated
with China’s schemes, and judged OBOR’s narratives. Beyond this, they
have opined on OBOR’s attractions, challenges, and significance.2 While
the existing literature is useful in providing information about OBOR, it has
diverse shortcomings. First, there are few monograph-length treatments and
most works speak to OBOR as a whole even though the MSRI and SREB
have their own unique features, players, and obstacles, which necessitate
separate, in-depth discussions. To illustrate, China–India relations are a
huge issue requiring detailed attention in studies of the MSRI, whereas
China–Russia relations and Xinjiang are significant questions meriting
extensive analysis in the case of SREB analyses. Second, many studies neglect
the interaction of politics and economics, even though they will be, and are,
closely intertwined and OBOR will have political and economic effects.
Third, most studies overlook the role of subnational (e.g., Chinese prov-
inces) and nonstate actors (e.g., MNCs) even though they are both objects
of the MSRI and SREB and shapers of them.3 In light of these limitations,
the Mr. & Mrs. S.H. Wong Center for the Study of Multinational
Corporations organized a conference on “The Political Economy of the
Maritime Silk Road Initiative and South Asia,” which was co-hosted with
the School of Advanced International and Area Studies, East China Normal
University, in November 2015. At the behest of the organizers, presenters
offered papers related only to the MSRI and, moreover, narrow topics such
as China, the MSRI, and Sri Lanka, or the MSRI-Indian business dynamic.
There are numerous theoretical rationales for studying the MSRI. One is
that it can inform work on the political economy of national security which
contemplates how economic forces influence state policies.4 Second, it can
enhance our knowledge of the factors shaping China’s foreign policy and its
implementation. Third, it can provide a mechanism for appreciating how
geography molds and is molded by foreign policy.5 From a policy stand-
point, the MSRI merits analysis because it entails the creation of interna-
tional organizations, the reconfiguration of the Asia-Pacific Region (APR)’s
infrastructure, and closer political ties between China and MSRI partici-
pants as well as a, potentially, greater leadership role for China.6 To para-
phrase John Garver (see Chap. 2), the MSRI and associated schemes, which
CHINA’S TWENTY-FIRST CENTURY MARITIME SILK ROAD INITIATIVE... 3
Background on the MSRI
In October 2013, Chinese President Xi Jinping proposed the idea of a
MSRI during a visit to Indonesia.8 China’s contemporary MSRI (see
Fig. 1.1 below) relates to the ancient maritime Silk Road that began in
Fujian (a province in China) and connected to Southeast Asia through the
South China Sea and then, via the Malacca Strait, Indian Ocean, and the
Mediterranean, to Europe, still the end destination of the contemporary
MSRI. Unlike the ancient maritime Silk Road, news reports officials sug-
gest that it is possible the contemporary MSRI may branch to various
African countries like Djibouti, Kenya, Madagascar, Mozambique, and
Tanzania and that the MSRI may have a branch linking it to the South
Pacific Islands.9
The MSRI involves dozens of hard infrastructure initiatives on the land
and sea as is well detailed in the chapters by Garver, David Brewster, Jabin
Jacob, and Amitendu Palit, among others. Specifically, it will entail the
construction of hundreds of billions of dollars’ worth of projects with
dual civilian and military potential such as airports, bridges, pipelines
and power plants, railways, and roads. Furthermore, it will include the
the construction of industrial parks, SEZs, and trade zones; and the
MSRI’s spurring of participant growth.18 Furthermore, the MSRI will
promote growth by helping China dispose of its excess capacity while con-
currently easing industrial restructuring.19 Beyond this, Beijing feels the
infrastructure associated with the MSRI will support growth.20 First, it will
provide a foundation for China to sell more overseas.21 Second, the MSRI
will energize networks of capital, services, and people that are key to
economic exchange.22 Third, as several writers in this volume note, the
building of hard infrastructure itself will generate prospects for Chinese
companies and sale and service openings for Chinese firms.
The MSRI also performs the function of giving China more profitable
ways to use its massive foreign currency reserves, of which the vast major-
ity are invested in low-yielding US Treasury securities.23 One way this will
occur is that these moneys will go to Chinese financial institutions like the
SRF, AIIB, and CDB, mentioned above, which, in turn, will lend money
for MSRI projects. These institutions (China) will not only make money
from these loans, but the loans will also increase the likelihood that MSRI
projects will be completed.24 On a related note, the MSRI will contribute
to Beijing’s effort to internationalize the RMB because MSRI countries
and companies (including Chinese ones) are expected to increase their
usage of it for debt issuances, swaps, settlement, credit insurance, currency
speculation, trade pricing, investment, and trade financing as a way to
hedge and reduce transaction costs.25
At the non-governmental level, Chinese businesses see new opportuni-
ties of all kinds flowing from the MSRI. They feel the MSRI will enlarge
the market for their products and services.26 In addition, they believe the
MSRI will ease access to production inputs, provide new financing sources,
bolster the ability of Chinese companies to diversify their client base, and
provide them with new opportunities to participate in consortia or joint
ventures.27 The MSRI further fits with the desire of many Chinese firms to
obtain increased opportunities for outward FDI (OFDI) to boost their
profit margins, build regional production bases and headquarters, and
gain brands, technology, and production knowledge.28
Turning to specific companies, we see Alibaba looking to build, in part-
nership with other public and private entities, a cross-border e-commerce
platform involving logistics, financial services, and customs clearance ser-
vices to promote goods from countries and regions along the MSRI.29
Similarly, IZP Technologies plans to set up cross-border clearing and pay-
ment systems, dual-currency credit cards, and finance small and medium
8 J.-M.F. BLANCHARD
Palit point out in their respective pieces in this book that it is open to
question if the volumes at MSRI “nodes” (e.g., ports or logistics facilities)
will be sufficient or whether MSRI facilities and pipelines will be more cost
effective or attractive than the alternatives, given domestic issues in host
countries and the existing low level of trade integration, intensity, and net-
working in South Asia (see Palit, Chap. 8).
A major economic issue is that the MSRI has little chance of reaching its
full potential unless India enthusiastically participates.36 Yet almost all the
contributors to this volume seem skeptical this will happen. Power, mili-
tary, economic, prestige, and identity considerations and China’s close
relations with Pakistan (see Jacob, Chap. 5), coupled with the way China
has gone about promoting the MSRI, have made India quite cautious
about the project. Indeed, Delhi has been adopting various measures that
directly or indirectly counter or slow the MSRI. Examples include building
better relations with MSRI countries such as the Maldives and Sri Lanka
and active involvement in their domestic politics (see Karl, Chap. 6 and
Kondapalli, Chap. 7), launching an Indian MSRI “equivalent” (Project
Mausam), seeking better ties with extra-regional powers like Japan, build-
ing up its own naval capabilities, and so on.37 Even if the Indian govern-
ment per se was on board, Indian political parties have expressed strong,
uniform concern about the project.38 Moreover, the Indian strategic com-
munity has been voicing alarmist sentiments about the end goals of China’s
MSRI, deeming it a scheme to balance against India, establish a “string of
pearls” (bases) that would allow it to dominate the Indian Ocean and trade
across it, and “cement Chinese influence in its near and extended neigh-
borhood at the exclusion of other significant actors such as the US, Japan,
Russia, and India.”39
One of the largest challenges facing China with respect to the successful
implementation of the MSRI will be the actions of Chinese businesses,
which often lack adequate knowledge of the cultural, social, and environ-
mental contexts in which they will operate abroad, do not understand the
political and credit risks they face, and are ignorant about foreign bureau-
cracies, legal mechanisms, and regulatory procedures, as well as local part-
ners.40 These defects plus each firm’s own selfish interests can cause
businesses to take actions that diminish the appeal of the MSRI, disrupt
efforts to complete projects, and waste financial resources. Ensuring Chinese
companies behave in accordance with Beijing’s wishes will not be easy given
their number, the fact they will be operating far away from Beijing, and the
fact that some are SOEs and/or otherwise have political clout.
10 J.-M.F. BLANCHARD
about project delays and cancellations, and, to some extent, changed the
economic atmosphere between Sri Lanka and China.62 While Myanmar is
not directly part of the MSRI in South Asia, the MSRI in its entirety
includes Myanmar and infrastructure in Myanmar will link to China’s MSRI
in South Asia. Thus, what happens in Myanmar has potential ramifications for
the MSRI in South Asia. In this vein, it is worth highlighting that leadership
turnover there, infrastructure construction problems, and border and ethnic
minority issues have disrupted investment ties between Myanmar and China
and are impeding the completion of certain projects.63
One obstacle confronting the MSRI is the coordination of Chinese
companies. Many take it for granted that Beijing “can completely override
enterprises in making decisions” and force them to participate consistently,
enthusiastically, and substantively in the implementation of the MSRI. Yet
this is not necessarily the case. Chinese firms, like businesses throughout
the world, will be cautious because of potential low investment returns, a
lack of host-country legal safeguards, and unfavorable commercial envi-
ronments as well as sundry political and other risks.64 If Chinese firms are
too cautious, though, then it will be difficult for the MSRI to reach its full
potential. It will be a political challenge for Beijing to gain full control
over the investment and operating decisions of Chinese companies, espe-
cially in the case of SOEs, which have a variety of tools that allow them to
influence policy.
A related problem will be the misbehavior of Chinese companies.
These firms will often be inattentive to the political dynamics in the
countries where they invest or operate and/or may not be sufficiently
conscientious with regard to the negative externalities that flow from
their mining projects, infrastructure building, energy-extraction activi-
ties, port and utility construction, and so on. All of this has the potential
to, among other outcomes, prevent projects from receiving approval,
stop projects midstream, and to turn MSRI participants or their publics
against the MSRI or select initiatives. Such dynamics have been seen in
the case of non-MSRI-participant states like Cameroon and Peru and
MSRI participants such as Myanmar.65 Beijing is well aware of these
potential problems. Illustrating this, in February 2015 Vice Premier
Zhang said at a conference that it was important for Chinese companies
to protect the environment and be aware of Corporate Social
Responsibility.66 Sui mentions in Chap. 4 that the Chinese government is
working to encourage its companies to behave in order to minimize the
risk of a domestic political backlash in partner countries.
14 J.-M.F. BLANCHARD
Chapter Summaries
In Chap. 2, John Garver focuses two historical lenses on China’s MSRI:
one that examines it relative to past Chinese efforts to access the South
Asia and the Indian Ocean (SA-IO) littoral, and another which compares
it to what other countries like Germany have done. He details China’s
construction of multiple railway and highway corridors linking China with
countries in the SA-IO littoral. He argues these corridors create powerful
two-directional conduits carrying SA-IO region (SA-IOR) resources to
China and Chinese goods to SA-IOR markets. In fact, previously daunt-
ing barriers such as the Tibetan plateau are becoming platforms for
power projection. Chinese initiatives build on efforts that can be traced
back to the 1930s and 1960s, but its contemporary programs are quali-
tatively different because they are powered by the previously unparal-
leled capabilities of an ambitious Chinese state facing declining external
constraints. In Garver’s view, China’s programs are partially inspired
by a desire to grow its influence across the SA-IOR and overcome the
tyranny of distance and difficult terrain that historically separated it
from that region. Garver points out that China’s use of transportation
technology to enhance its national influence is not new historically,
relative to what other countries have attempted, but contends that
Beijing’s efforts mean the territorial sphere of influence of a truly
“risen” China will exceed that carved by China’s historic dynasties,
with profound implications, as detailed elsewhere in this volume.
David Brewster (Chap. 3) enhances our ability to ponder the military-
strategic dimensions of the MSRI in South Asia. He notes that control
over access to the Indian Ocean, whether by land or by sea, has tradition-
ally been viewed through an intensely strategic lens. He adds that the
unusual geography of the Indian Ocean has long made it a relatively
closed strategic space that could be dominated by a succession of extra-
regional naval powers—most recently the USA—while land powers such
as China have largely been excluded from the region. But China’s MSRI,
involving the construction of new maritime pathways to and across the
Indian Ocean, will likely alter the naval balance in the Indian Ocean and,
perhaps, the entire strategic nature of the region such that the Indian
Ocean is no longer a mare clausum. Moreover, whereas China’s previous
“remoteness from its Indian Ocean neighbors often helped give it the
luxury of being able to avoid getting its hands dirty,” Brewster posits that
China’s new interests in Indian Ocean ports and the development of new
overland pathways have the potential to fundamentally change the nature
of China’s security role in the region. More specifically, China may
CHINA’S TWENTY-FIRST CENTURY MARITIME SILK ROAD INITIATIVE... 15
increasingly become a resident power in the Indian Ocean rather than just
an extra-regional power. Still Brewster is doubtful that China can domi-
nate the Indian Ocean given its lack of bases, its long supply lines, and its
limited naval capabilities, among other things.
In Chap. 4, Xinmin Sui provides a history of China’s links with South
Asia, which, over time, shifted to become more focused on and favorable
to Pakistan. He also paints a portrait of China’s contemporary ties with
various South Asian countries, which he labels a “patchwork of bilateral
relations” and as non-reflective of any grand strategy towards the region;
and of China’s stance towards various regional institutions such as the
South Asian Association for Regional Cooperation. Turning to China’s
policies towards South Asia in the context of the MSRI, Sui contends
China’s goals are economic, with Beijing seeking to enhance its resource
security, find new markets, and facilitate the development of its West and
South Asian neighbors. He argues that China’s increasing naval presence
in the Indian Ocean is not about containing India or securing a dominant
position, but rather about defending its resources and economic interests.
While Sui believes the MSRI will be beneficial to all, he recognizes there
are a multitude of obstacles in the region and with respect to China, which
may slow or obstruct its realization.
Chapter 5 (Jabin Jacob) is the first chapter in this volume stressing a
specific bilateral relationship, China–Pakistan ties, in the context of China’s
MSRI and South Asia. It focuses on the CPEC, which has its own history
and existence separate from the MSRI, but also is incontrovertibly related
to it and has implications for Sino-Indian relations which, in turn, have
ramifications for the development of the MSRI. Jacob informs us about the
historical and present-day Sino-Pakistan relationship, which has been and is
a long-term one of strategic political and military interdependence, as has
been reaffirmed repeatedly by Beijing. For Jacob, the launch of the CPEC
under the framework of the MSRI and China’s OBOR scheme more gener-
ally is a sign the relationship is graduating to become a more complex and
multilayered one with economic facets, too. Still, CPEC was designed to
serve a number of political purposes for China such as bolstering its influ-
ence in the IOR and stabilizing Pakistan (and neighboring Afghanistan).
Aside from India’s major sensitivities about anything strengthening Sino-
Pakistan relations, Jacob notes that impediments to the implementation of
CPEC and the MSRI will flow from terrorism, corruption, and other
political problems inside Pakistan and observes that the economics of vari-
ous projects in the latter country may not pan out because of the attitude
of Chinese companies or the situation on the ground in Pakistan.
16 J.-M.F. BLANCHARD
Conclusion
Since China proposed the MSRI in 2013, businesspeople, government
officials inside and outside China, and scholars have been spending an
increasing amount of time contemplating the details and implications
of China’s grand scheme and the details of the SREB and the larger
OBOR. While the number of studies has been expanding steadily, the
extant literature is afflicted by various shortcomings including, most
noticeably, a lack of focused analysis, no or insufficient attention to
politico-economy, and a failure to consider the importance of subnational
and nonstate actors. This book surmounts these limitations in various
ways. One is that it focuses only on the MSRI. A second is that it looks at
the MSRI in the South Asian context. A third, related to the second, is
that it has a number of chapters offering special insights on subjects
such as China, the MSRI, and Pakistan, or China, the MSRI, and the
Maldives. A fourth is that it is highly attuned to the interaction of polit-
ical and economic factors. Finally, as the context warrants, the volume
pays attention to nonstate and subnational actors.
While this volume is not meant to be theoretical, it does have a number
of conceptual implications. First, it shows that economic stimuli (the aid,
trade, and investment associated with the MSRI) do not necessarily have
positive political consequences for reasons such as, inter alia, the fact they
can be negative, be offset by international or domestic political factors, or
be diminished by countervailing signals. Second, it demonstrates that stu-
dents of Chinese foreign policy should not confine themselves to national
18 J.-M.F. BLANCHARD
security actors, issues, or tools, but pay attention to economic ones, too.
Turning to policy ramifications, the various chapters herein demonstrate
that while the MSRI has potentially transformative effects, there are numer-
ous, daunting political, military, economic, social, and other obstacles that
China has to surmount before these effects will occur. Thus, for many
years yet, it seems one should be calm about the MSRI’s implications.
Furthermore, the chapters make clear that it is vital for China to bring India
on board to realize the MSRI’s full potential. Finally, the chapters suggest
there are many business and economic opportunities and challenges that
will flow directly and indirectly from China’s MSRI, though the specific
magnitude of these opportunities and challenges is not known at present.
The MSRI, in tandem with other Chinese initiatives, has been seen by
many as leading to a sea change in the world political and economic order;
as a “game changer” to quote one Voice of America news story.67 The stud-
ies herein indicate that many changes are afoot throughout South Asia and
in regard to specific dyadic or triadic relationships and that China indeed
hopes the MSRI can help it achieve multiple political and economic ends.
Yet, they also reveal that there has been no transformation as of yet and
that a significant change can occur only after China and MSRI participant
countries have resolved many serious political, economic, and social issues,
some external and others internal. This, however, can hardly be taken for
granted despite China’s political and economic weight and past successes
in realizing large-scale projects. Moreover, other countries, schemes, and
technologies will not stand still while China’s MSRI unfolds, making it
even fuzzier what new world we will see in 10, 20, or 50 years. It should
not be forgotten, too, that China’s original Maritime Silk Road came to an
end because of dynamics internal to China. This, too, is a matter to which
we must be attentive and which will add to the uncertainty and excitement
of watching the MSRI unfold.
Notes
1. Jeremy Page, “China Sees Itself at Center of New Asian Order,” The
Wall Street Journal, November 9, 2014, http://www.wsj.com/articles/
chinasnewtraderoutescenteritongeopoliticalmap1415559290; and Charles
Clover and Lucy Hornby, “China’s Great Game: Road to a New Empire,”
Financial Times, October 12, 2015; “Chinese Vice Premier Urges Closer
Cooperation along Belt and Road,” China.Org.cn, January 16, 2016, http://
www.china.org.cn/business/2016-01/16/content_37590431.htm.
CHINA’S TWENTY-FIRST CENTURY MARITIME SILK ROAD INITIATIVE... 19
2. For discussion and references, see Jean-Marc F. Blanchard and Colin Flint,
“The Geopolitics of China’s Maritime Silk Road Initiative,” Geopolitics 22,
no. 2 (2017): 223–245.
3. The issue of subnational actors and the MSRI receives extensive attention
in Jean-Marc F. Blanchard, “Probing China’s Twenty-First-Century
Maritime Silk Road Initiative (MSRI): An Examination of MSRI
Narratives,” Geopolitics 22, no. 2 (2017): 246–268.
4. An illustrative work is Jean-Marc F. Blanchard and Norrin M. Ripsman,
Economic Statecraft and Foreign Policy: Sanctions, Incentives, and Target
State Calculations (London: Routledge, 2013).
5. For an attempt to do this, see the special section entitled “The Geopolitics
of China’s Maritime Silk Road Initiative” in Geopolitics 22, no. 2 (2017).
6. Shannon Tiezzi offers some similar observations in “The New Silk Road:
China’s Marshall Plan?” The Diplomat, November 6, 2014, http://the-
diplomat.com/2014/11/the-new-silk-road-chinas-marshall-plan.
7. David Brewster remarks the MSRI and associated schemes mean that the
long-isolated Indian Ocean will no longer be a mare clausum, or closed sea.
8. Two years later, China promulgated an associated government White Paper.
It is formally called the “Vision and Actions on Jointly Building Silk Road
Economic Belt and Twenty-First-Century Maritime Silk Road” [hereinafter
the “SREB/MSRI Vision”] and was jointly issued by the PRC National
Development Reform Commission, Ministry of Foreign Affairs (MFA), and
Ministry of Commerce on March 28, 2015. It is available at http://news.
xinhuanet.com/english/china/2015-03/28/c_134105858.htm, among
other sites.
9. Wu Jiao and Zhang Yunbi, “A New ‘Maritime Silk Road’ Called
For,” China Daily, October 4, 2013, http://usa.chinadaily.com.cn/
epaper/2013-10/04/content_17009583.htm; Shannon Tiezzi, “China’s
Maritime Silk Road’: Don’t Forget Africa,” The Diplomat, January 29, 2015,
http://thediplomat.com/2015/01/chinas-maritime-silk-road-dont-for-
get-africa; Chen Jia, “‘Belt and Road’ Takes New Route,” China Daily,
April 15, 2015, http://europe.chinadaily.com.cn/business/2015-04/15/
content_20435638.htm; and Ambassador Xu Bu, “Maritime Silk Road Can
Bridge China-ASEAN Cooperation,” The Jakarta Post, August 5, 2015,
http://www.thejakartapost.com/news/2015/08/05/maritime-silk-road-
can-bridge-china-asean-cooperation.html.
10. T.K. Premadasa, “Twenty-First-Century Maritime Silk Road,” Financial
Times, October 25, 2014; “China to Speed up Construction of New Silk
Road: Xi,” Xinhuanet, November 6, 2014, http://news.xinhuanet.com/
english/china/2014-11/06/c_133770684.htm; Page, “China Sees Itself
at Center of New Asian Order”; “China Sketches Out Priorities of
‘Belt and Road’ Initiatives,” China Daily, February 2, 2015, http://www.
chinadaily.com.cn/business/2015-02/02/content_19464329.htm;
20 J.-M.F. BLANCHARD
18. Page, “China Sees Itself at Center of New Asian Order”; Ji-Yong Lee,
“Political and Economic Implications of China’s New Silk Road Strategy,”
IFANS BRIEF, Winter 2014; and Xu, “Maritime Silk Road Can Bridge
China-ASEAN Cooperation.”
19. Tiezzi, “The New Silk Road”; He Huifeng, “China Needs New Trade
Route to Future, Premier Li Keqiang Says,” South China Morning Post,
April 6, 2015, http://www.scmp.com/news/china/article/1757174/
china-needs-new-trade-route-future-premier-li-keqiang-says; and Lucio
Blanco Pitlo, “Chinese Infrastructure Investment Goes Abroad,”
The Diplomat, August 6, 2015, http://thediplomat.com/2015/08/
chinese-infrastructure-investment-goes-abroad.
20. “China Sketches Out Priorities of ‘Belt and Road’ Initiatives”; “Two
Sessions to Focus on Growth,” Global Times, March 2, 2015, http://
www.globaltimes.cn/content/909845.shtml; and Beauchamp-Mustafaga,
“NPC Meeting Touts New Silk Road as New Driver for Economic
Growth.”
21. Liu, “China’s Xi Pledges $40 Billion for Silk Road Infrastructure Fund”;
“China Pledges $40 Billion for New ‘Silk Road’”; and Gordon G. Chang,
“This Is How You Blow $1 Trillion if You’re China,” Forbes, June 7, 2015,
h t t p : / / w w w. f o r b e s . c o m / s i t e s / g o r d o n c h a n g / 2 0 1 5 / 0 6 / 0 7 /
china-blowing-a-trillion-dollars-on-its-silk-roads.
22. Michael Spence, “China’s International Growth Agenda,” Project
Syndicate, June 17, 2015, http://www.project-syndicate.org/print/
china-international-growth-agenda-by-michael-spence-2015-06.
23. Liu, “China’s Xi Pledges $40 Billion for Silk Road Infrastructure Fund”; John
Kemp, “China Flexes its Silk Road Muscle,” The Japan Times, November 11,
2014, http://www.japantimes.co.jp/opinion/2014/11/11/commentary/
world-commentary/china-flexes-silk-road-muscle; and Lee, “Political and
Economic Implications of China’s New Silk Road Strategy,” 15. This also is
one of the purposes of the China Investment Corporation (CIC). On the
CIC, see Jean-Marc F. Blanchard, “The China Investment Corporation:
Power, Wealth, or Something Else,” China: An International Journal 12,
no. 3 (2014): 155–175.
24. Beauchamp-Mustafaga, “NPC Meeting Touts New Silk Road as New
Driver for Economic Growth.”
25. Liu, “China’s Xi Pledges $40 Billion for Silk Road Infrastructure Fund”;
Wang Liwei, “Closer Look: So China’s Silk Road Fund is Marshall Plan
Redux? Not Really,” Caixin, November 10, 2014, http://english.caixin.
com/2014-11-10/100749151.html; and Huo Kan, Wang Ling, and Wu
Hongyuran, “Investors Embrace China’s Big Belt, Risky Road,” Caixin,
June 17, 2015, http://english.caixin.com/2015-06-17/100820036.html.
26. “Chinese Cosmetics Firms Shine in Mideast with New Silk Road
Drive,” China Daily, May 27, 2014, http://www.chinadaily.com.cn/
business/2015-05/27/content_20834245.htm.
22 J.-M.F. BLANCHARD
27. Zhang Yuhe, “With New Funds, China Hits a Silk Road Stride,”
Caixin, December 9, 2014, http://www.caixinglobal.com/2014-12-
03/101012865.html; Shannon Tiezzi, “What’s It Like to Have China
Build You a Port? Ask Cameroon,” The Diplomat, February 27, 2015,
http://thediplomat.com/2015/02/whats-it-like-to-have-china-build-
you-a-port-ask-cameroon; Beauchamp-Mustafaga, “NPC Meeting Touts
New Silk Road as New Driver for Economic Growth”; “Beijing’s Belt and
Road Means Overseas Military Bases,” WantChinaTimes, May 31, 2015,
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=201505310
00044&cid=1101; Huo et al., “Investors Embrace China’s Big Belt, Risky
Road”; and “Belt and Road Initiative Opens Opportunities for Chinese
Gold Miners,” China Daily, October 23, 2015, http://www.chinadaily.
com.cn/business/2015-10/23/content_22268061.htm.
28. For a general treatment of the drivers of Chinese OFDI, see Jean-Marc
F. Blanchard, “Chinese MNCs as China’s New Long March: A Review and
Critique of the Western Literature,” Journal of Chinese Political Science 16,
no. 1 (2011): 91–108.
29. Qiu Quanlin, “E-Commerce to Help Build Maritime Silk Road,” China
Daily, November 13, 2014, http://www.chinadaily.com.cn/business/
tech/2014-11/13/content_18906835.htm.
30. Dai Tian, “Big Data Conglomerate Dreams Big on Silk Road,” China Daily,
July 29, 2015, http://www.chinadaily.com.cn/business/2015-07/29/
content_21432401.htm.
31. Zhong Nan, “COFCO Commits to Belt and Road Initiative,”
China Daily, June 3, 2015, http://www.chinadaily.com.cn/
business/2015-06/03/content_20895016.htm.
32. PRC, MOFCOM, “Chinese Company Invests in Malaysian
Rail to Boost Maritime Silk Road,” September 23, 2015, http://
english.mofcom.gov.cn/ar ticle/newsrelease/counselorsof fice/
westernasiaandafricareport/201509/20150901120981.shtml.
33. Wang, “Closer Look”; “Experts Say ‘Maritime Silk Road’ Will Stimulate
Economic Potential of Developing Countries,” Xinhuanet, February 9,
2015, http://news.xinhuanet.com/english/2015-02/09/c_133981299.
htm; Nicholas Choa, “Building a High-Speed Silk Road,” US News and
World Report, April 14, 2015, http://www.usnews.com/opinion/blogs/
world-report/2015/04/14/asian-infrastructure-investment-bank-and-
china-rail-network-worth-watching; and Spence, “China’s International
Growth Agenda”; and Sui’s chapter in this book, Chap. 4.
34. “Experts Say ‘Maritime Silk Road’ Will Stimulate Economic Potential of
Developing Countries.”
35. Andrew Browne, “On Track or at Sea? Beijing Reopens Old Land Routes,”
The Wall Street Journal, March 3, 2015, http://www.wsj.com/articles/
c h i n a s - w o r l d - o n - t r a c k - o r- a t - s e a - b e i j i n g - r e o p e n s - o l d - l a n d -
routes-1425371903.
CHINA’S TWENTY-FIRST CENTURY MARITIME SILK ROAD INITIATIVE... 23
36. Yang Jiemian, “Making the Maritime Silk Road a New Promoter of
Cooperative Interaction between China and South Asia” (keynote speech
given at the “Political Economy of China’s Maritime Silk Road and South
Asia” conference, Shanghai, China, November 21, 2015).
37. Akhilesh Pillalamarri, “Project Mausam: India’s Answer to China’s
‘Maritime Silk Road,’” The Diplomat, September 18, 2014, http://
thediplomat.com/2014/09/project-mausam-indias-answer-to-chinas-
maritime-silk-road;DavidBrewster,“China’s Rocky Silk Road,” East AsiaForum,
December 9, 2015, http://www.eastasiaforum.org/2015/12/09/
chinas-rocky-silk-road; Liu Zongyi, “India’s Political Goals Hinder
Cooperation with China on ‘Belt, Road,’” Global Times, July 3, 2016,
http://www.globaltimes.cn/content/992047.shtml; “Narenda Modi
Changed India’s ‘Attitude’ towards Maritime Silk Road: Chinese Daily,”
The Economic Times, July 4, 2016, http://economictimes.indiatimes.
com/news/politics-and-nation/narendra-modi-changed-indias-attitude-
towards-maritime-silk-road-chinese-daily/articleshow/53042664.cms.
38. “India Important Cooperative Partner in Silk Road Project: China,” The
Economic Times, October 20, 2015, http://economictimes.indiatimes.
com/news/politics-and-nation/india-important-cooperative-partner-in-
silk-road-project-china/articleshow/49472560.cms.
39. See the chapters by Brewster (Chap. 3), Karl (Chap. 6), and Kondapalli
(Chap. 7) herein. The quotation comes from Jacob’s chapter (Chap. 5).
40. Wang, “Closer Look”; Chen, “‘Belt and Road’ Takes New Route”; Huo
et al., “Investors Embrace China’s Big Belt, Risky Road”; and Blanco,
“Chinese Infrastructure Investment Goes Abroad.”
41. This is emphasized in Sui’s chapter (Chap. 4) and also mentioned in the chap-
ters by Garver, Karl, and Kondapalli (Chaps. 2, 6, and 7). See also Nathan
Beauchamp-Mustafaga, “Dispatch from Beijing: PLA Writings on the New
Silk Road,” China Brief 15, no. 4 (2015): 1–2; Shuaihua Wallace Cheng,
“China’s New Silk Road: Implications for the US,” YaleGlobal Online, May
28, 2015, http://yaleglobal.yale.edu/content/china%E2%80%99s-new-silk-
road-implications-us; and Blanchard, “Probing China’s 21st Century Maritime
Silk Road Initiative,” 255–256.
42. Beauchamp-Mustafaga, “Dispatch from Beijing,” 3; Philip Stephens, “Now
China Starts to Make the Rules,” Financial Times, May 28, 2015; and Spence,
“China’s International Growth Agenda”; “New Silk Road Ruins US Military
Plans to Impose Blockade of China,” Sputnik International, June 29, 2015,
http://sputniknews.com/business/20150629/1023998554.html.
43. See Premadasa, “Twenty-First-Century Maritime Silk Road”; Yang
Jiemian, “Making the Maritime Silk Road a New Promoter of Cooperative
Interaction between China and South Asia”; and Garver’s chapter below
(Chap. 2).
44. Xu, “Maritime Silk Road Can Bridge China-ASEAN Cooperation.”
24 J.-M.F. BLANCHARD
45. D.S. Rajan, “Indian Ocean in Focus: China-India-US Jostling for Power-
Analysis,” Eurasia Review, February 23, 2015, http://www.southasiaanalysis.
org/node/1718. For a general discussion of issues surrounding the analysis of
China and soft power, see Jean-Marc F. Blanchard and Fujia Lu, “Thinking
Hard about Soft Power: A Review and Critique of the Literature on China and
Soft Power,” Asian Perspective 36, no. 4 (2012): 565–589.
46. See Karl’s chapter (Chap. 6).
47. Page, “China Sees Itself at Center of New Asian Order.”
48. Xu, “Maritime Silk Road Can Bridge China-ASEAN Cooperation”;
“Chinese President calls for Asian Political Parties’ Support on Belt and
Road,” Xinhuanet, October 15, 2015, http://news.xinhuanet.com/
english/2015-10/15/c_134717621.htm; and Yang Jiemian, “Making
the Maritime Silk Road a New Promoter of Cooperative Interaction
between China and South Asia.”
49. Zhang, “With New Funds, China Hits a Silk Road Stride”; Beauchamp-
Mustafaga, “Dispatch from Beijing,” 2; Stephens, “Now China Starts to
Make the Rules”; Cary Huang, “New World Order: Xi Bent on Securing
Bigger Role for China in Global Affairs, Analysts Say,” South China
Morning Post, October 14, 2015, http://www.scmp.com/print/news/
china/diplomacy-defence/article/1867576/xi-set-securing-new-role-
china-world-affairs-analysts; and Garver (Chap. 2).
50. Ting Shi, “Xi Risks Road Backlash to Remake China Center of the World,”
Bloomberg, November 26, 2014, http://www.bloomberg.com/news/
print/2014-11-25/xi-risks-silk-road-backlash-to-reclaim-china-as-center-
of-world.html; “‘One Belt, One Road’ Initiative Will Define China’s Role
as a World Leader,” South China Morning Post, April 2, 2015, http://
www.scmp.com/comment/insight-opinion/article/1753773/one-belt-
one-road-initiative-will-define-chinas-role-world; and Theresa Fallon,
“The New Silk Road: Xi Jinping’s Grand Strategy for Eurasia,” American
Foreign Policy Interests 37, no. 3 (2015): 141.
51. Ting, “Xi Risks Road Backlash to Remake China Center of the World”;
Beauchamp-Mustafaga, “Dispatch from Beijing,” 2; Choa, “Building a
High-Speed Silk Road”; Michael Clarke, “Understanding China’s Eurasian
Pivot,” The Diplomat, September 10, 2015, http://thediplomat.
com/2015/09/understanding-chinas-eurasian-pivot; and Fallon, “The
New Silk Road: Xi Jinping’s Grand Strategy for Eurasia,” 142.
52. Page, “China Sees Itself at Center of New Asian Order”; Beauchamp-
Mustafaga, “Dispatch from Beijing,” 2; and Fallon, “The New Silk Road:
Xi Jinping’s Grand Strategy for Eurasia,” 142.
53. Liu, “China’s Xi Pledges $40 Billion for Silk Road Infrastructure Fund”;
Page, “China Sees Itself at Center of New Asian Order”; and Kemp,
“China Flexes its Silk Road Muscle.”
CHINA’S TWENTY-FIRST CENTURY MARITIME SILK ROAD INITIATIVE... 25
54. “China to Speed up Construction of New Silk Road”; Zhu Wenqian, “Tax
Plan to Support the Belt and Road Initiative,” China Daily, April 1, 2015,
http://www.chinadaily.com.cn/business/2015-04/01/content_19973451.
htm; and “Chinese President calls for Asian Political Parties’ Support on Belt
and Road.”
55. The first quote comes from Wang Sheng, “Commentary: Chinese Marshall
Plan Analogy Reveals Ignorance, Ulterior Intentions,” Xinhuanet, March 11,
2015, http://news.xinhuanet.com/english/2015-03/11/c_134057346.
htm. The second quote comes from Chen Boyuan, “‘Belt and Road’ Opens
to All,” China.Org.cn, October 19, 2015, http://www.china.org.cn/
china/2015-10/19/content_36836016.htm.
56. Tiezzi, “The New Silk Road”; Kemp, “China Flexes its Silk Road Muscle”;
and Li Yonghui, “Constructing a Strategic Peripheral Belt to Support the
Wings of China’s Rise,” Contemporary International Relations 23, no. 6
(2013).
57. Wang, “Closer Look”; “Silk Road Not Marshall Plan: Scholars,” China.
Org.cn, February 12, 2015, http://www.china.org.cn/world/2015-
02/12/content_34805640.htm; and “Belt and Road Not Geopolitical
Tool, Says Spokesperson,” Xinhuanet, December 29, 2015, http://news.
xinhuanet.com/english/2015-12/29/c_134962167.htm.
58. Xu, “Maritime Silk Road Can Bridge China-ASEAN Cooperation.”
59. Zhao Minghao, “Silk Road Aspirations Face Complications from National
Squabbles,” Global Times, December 18, 2014, http://www.globaltimes.
cn/content/897363.shtml.
60. Zhang, “With New Funds, China Hits a Silk Road Stride”; Yang Jiemian,
“Making the Maritime Silk Road a New Promoter of Cooperative
Interaction between China and South Asia”; and Shi Yinhong, “Belt and
Road: A Searching for Strategic Rationale and Appealing for Political
Prudence” (presentation to the “Political Economy of China’s Maritime
Silk Road Initiative and South Asia” conference, Shanghai, China,
November 22, 2015). On these issues, see also Jacob’s chapter (Chap. 5).
61. Christopher Len, “China’s Twenty-First-Century Maritime Silk Road
Initiative, Energy Security, and SLOC Access,” Maritime Affairs 11, no. 1
(2015): 9–10; “Indonesia Says Could Also Take China to Court over
South China Sea,” Reuters, November 11, 2015, http://www.reuters.
com/ar ticle/2015/11/11/us-southchinasea-china-indonesia-
idUSKCN0T00VC20151111.
62. Premadasa, “Twenty-First-Century Maritime Silk Road”; Len, “China’s
Twenty-First-Century Maritime Silk Road Initiative, Energy Security, and
SLOC Access,” 10; and Karl’s chapter (Chap. 6).
63. Len, “China’s Twenty-First-Century Maritime Silk Road Initiative, Energy
Security, and SLOC Access,” 11–12.
64. Zhao, “Silk Road Aspirations Face Complications from National Squabbles.”
26 J.-M.F. BLANCHARD
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chinasnewtraderoutescenteritongeopoliticalmap1415559290.
30 J.-M.F. BLANCHARD
Tiezzi, Shannon. “The New Silk Road: China’s Marshall Plan?” The
Diplomat, November 6, 2014. http://thediplomat.com/2014/11/
the-new-silk-road-chinas-marshall-plan.
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chinas-maritime-silk-road-dont-forget-africa.
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CHAPTER 2
John W. Garver
of the 1930s, built in part for the military advantages associated with these
new highways. Alignments of these new roads were straighter, cuts deeper,
and tunnels and bridges more frequent, piercing mountain ranges and
spanning wide depressions. Autobahns cut through rather than following
the earth’s terrain. Entry onto the highway was limited by clever design
and stops along the thoroughfare were eliminated. Trucks also became
more powerful, carrying ever more cargo at faster speeds.
German autobahn engineering spread to the USA after 1945. Supreme
Allied Commander in Europe, General, and later President, Dwight
Eisenhower, was deeply impressed by Germany’s autobahn, and immedi-
ately understood its military significance. Eisenhower had been part of a
transcontinental “convoy” undertaken by the US Army in 1919 to survey
the conditions of roads across the USA. That condition was discovered to
be abysmal, with few hard-surfaced highways linking major American cities.
In the 1920s the US Army Chief of Staff John Pershing submitted a report
calling for a major, nationwide highway construction effort. In 1956, under
Eisenhower’s leadership as President, the National Interstate and Defense
Highway Act was passed. Within 35 years (by 1999) the network laid out at
that time would be complete and the USA would have an extremely
advanced system of “superhighways.” By that point, however, the US road
network was second to China’s in total length. China, after 1978, also
understood the transformative power of modern transportation.
Regarding China, highway construction, like railway construction, was
part of the Stalinist model of comprehensive economic planning pioneered
in the USSR in the 1920s and 1930s and was adopted by China after 1949.
But the crux of that model was maximization of investment in heavy and
defense industry, achieved by holding down investment in other sectors,
including infrastructure of all sorts. Roads and rail lines were built if neces-
sary for the growth of heavy industry or military defense, but since large
percentage increases in heavy industrial output was taken as the hallmark of
success, relatively little investment went into highways. At the beginning of
China’s scrapping of the Stalinist economic model circa 1979, roads
between even major Chinese cities were often primitive. But under Deng
Xiaoping, China followed the example of both the USA and an earlier gen-
eration of East Asian industrializers (Japan, South Korea, Taiwan, and
Singapore) in recognizing the centrality of modern transportation for effi-
cient production and commerce. Railway spurs and modern highways—the
latter often designed and engineered up to global standards by Hong Kong
firms—were frequently supplied as part of the state support given to the
new Special Economic Zones and, later, open cities. Progress was rapid and
CHINA’S RISE AND THE EURASIAN TRANSPORTATION REVOLUTION 39
take their supplies with them, or send them to forward armies by wagon
convoys—which themselves consumed a lot of the supplies they carried,
and which were vulnerable to raids. Defense against such raids required
protective forces, which further increased the requirement for food and
fodder. Because of these constraints, thrusts by Chinese armies into more
distant westerly regions were typically short-lived. Occasional thrusts by
Chinese states to the far west were motivated by the desire to tax lucrative
silk route commerce and guard against invasion. But Chinese armies sta-
tioned too far west faced the logistic difficulties described above. The typi-
cal result was that these armies would fall back to more logistically
sustainable, more easterly bastions—the “green corridor” along the Yellow
River in Gansu and its upper tributaries around Xining in today’s Qinghai
(the old Amdo).
Movement between East Asia and Western Eurasia via the silk roads of
Inner Asia increased under the Pax Mongolica in the thirteenth to six-
teenth centuries. Administration, including taxation, was unified and reg-
ularized, while trade was protected and encouraged. For the first time
direct contact between Europe and China was established, with European
priests and adventurers only now frequenting China.8 This was of immense
historical importance. Mongol rulers were great adaptors of modern tech-
nology (both firearms and machines for siege of cities), but in terms of
transportation the most advanced technology was still plodding camels or
galloping horses supported by frequent way stations. The revolution in
transportation technology that was then underway took place not on the
steppes of Inner Asia, but on the ocean.
early modern East Asian empire—ships had to sail far north, into frigid
and frequently stormy waters, avoid occasional icebergs, frequently
against strong prevailing winds, and pass by immense stretches of for-
ested wasteland before reaching anywhere that seemed worth going to.
In the age of wind and sail, these were considerable barriers. Chinese
mariners had a much easier route with which to reach the commercial
emporia of Western Eurasia—the South China Sea. This is one reason
why Chinese explorers never “discovered America.”10
Winds conspired with currents to keep Chinese vessels off the high
Pacific Ocean. The South Pacific and northern Indian Oceans have power-
ful monsoon cycles, with colder, dryer winds blowing southward from the
Arctic and Siberia for several months in the winter. Then warmer, wetter
winds from the equatorial regions blow from south to northwest during
the summer. Thus, cargo-laden ships could move from East Asian ports
southward to commercial emporia around the Strait of Malacca in winter,
and then back north to home ports—with a different cargo!—in summer.
A nice year-long round trip, over twice as fast as by camel overland, and
with two deliveries per year, rather than one as with the overland route.
Trade over this “maritime silk road” was ethnically segmented. Chinese
merchants typically handled trade north of Malacca, while Hindu, Persian,
or Arab merchants handled commerce west of Malacca. Greeks and Italians
monopolized the Mediterranean terminus—a fact that impelled Portugal
and Spain to seek new western Atlantic Ocean routes to Cathay. This
“maritime silk road” paralleled the terrestrial routes and waxed in impor-
tance as Chinese maritime technology improved in the second millennium
ce under the commerce-oriented Song dynasty, and in the context of the
maritime battles between the Song and its Jurchen and then Mongol
enemies.
By the fifteenth century China had developed a ship design perfectly
adapted to monsoon navigation: the junk. With large square-rigged sails,
broad beam, shallow draft and no keel, but with a sternpost rudder, the
junk was excellent for use in a monsoon environment. With strong, regular
winds behind it, a junk could skim over the water faster than the Spanish,
Portuguese, and Dutch ships that began arriving in East Asia in the six-
teenth century. What the junk could not do was sail close to the wind—
that is, sail at tighter angles into adverse winds. All sailing ships navigate
adverse winds by zigzagging (“tacking”) into them, but square-rigged
sails must sail into such winds much more obliquely (at higher angles).
European ship designers had discovered in the fifteenth century that a
42 J.W. GARVER
After many centuries of being “trapped” in East Asia— first by the high
elevations of Tibet, the deserts of Inner Asia, and the winds and currents
of the North Pacific combined with China’s specialized junk-trade role in
the early modern East Asia trading system; and then by the thalassocracy
of Imperial Japan and Cold War America, and by China’s own industrial
and technological backwardness—China now sees the oceans of the world
and the steppes of Central Asia as global highways. Following a long
cohort of other ambitious and powerful states, China is now vigorously
applying the most advanced transport technologies to enhance its national
influence and power.
Let’s start with Tibet. When the PRC was established, there were no
motor roads into Tibet. In the middle of the twentieth century, Tibet’s
transportation was still based on animal or human muscle power. Tibet’s
major external commercial route was then with India via animal pack
trains through the Chumbi Valley. China itself had three routes passable
by horse and animal pack trains; one from Xining in the north in today’s
Qinghai province; one via Kashgar in far-western Xinjiang; and one via
Changdou in today’s western Sichuan. Each of China’s three routes was
far longer than the Chumbi route to India. Calcutta was far closer to
Lhasa than was Changdou or Xian. Of the three Chinese routes, that via
Changdou was the fastest. By the mid-eighteenth century the Qing had
established a system of horse relay stations along this route. Until the
twentieth century, the fastest a person or information could travel from
China to Tibet was via galloping horse over the mountain ranges along the
Changdou route. Chinese armies were not stationed in Tibet, in large part
because the local primitive agriculture could not feed those armies, and
food shipped from China proper would be immensely expensive. This
relative isolation from China was a key basis for Tibet’s internationally
recognized status as an autonomous region under Chinese suzerainty (not
sovereignty) and for its role (at least from the British and Indian perspec-
tives) as a buffer between China and India.
Construction of motor roads into Tibet did not begin until 1950. From
that point on, road-building was a, perhaps the major People’s Liberation
Army (PLA) activity in Tibet. All three traditional Chinese routes were
turned into motor roads. Improvement was steady. New alignments and
CHINA’S RISE AND THE EURASIAN TRANSPORTATION REVOLUTION 45
Corridor” has fallen into desuetude, perhaps because that term seems too
China-centric. The currently favored nomenclature is Bangladesh, China,
India, Myanmar (BCIM), a phrasing that is clearly multilateral. We will
return to this point in the conclusion.
Objectives and Consequences
Several purposes of China’s ambitious transportation-construction efforts
are apparent. Expanded access to ports on the Indian Ocean, and at a
somewhat further reach via rail to the Middle East and Europe, will facili-
tate continued growth of China’s trade and the development of China’s
poorer western and southwestern regions associated with that growing
trade. Modern rail and highways, and the myriad commercial links that
will follow, will expand China’s influence in large regions of Eurasia.
Chinese investment in and provision of higher education services to the
expanding middle classes in emerging economies will probably become
important vectors of Chinese influence. When China’s ongoing economic
dynamism is contrasted with the far less successful economic performance
of Russia—the traditional and still preeminent holder of soft power in
Central Asia—it could well be that as new railways and superhighways link
that region ever more closely with China, the latter will gradually replace
Russia as the dominant soft-power holder in vast regions in Central Asia.
This may be an overly bold proposition, but we may be witnessing a rever-
sal of the historic turning point that came with the battle of Talas in ce
751 when an Arab army defeated a Tang army in today’s Kyrgyzstan. That
Umayyad victory at Talas shifted Central Asia from the B uddhist-Confucian
civilizational realm of East Asia to the emerging Islamic realm. Later
Russian conquests in the eighteenth and nineteenth centuries shifted
Central Asia to the Russian sphere. No armies are today forming up for
civilizational clashes; rather, profound issues of ethnic identity are involved
here. But it may be as well to recall that East Asia, centered around China,
formed a powerful civilization—and as this paper points out—that long-
standing geographic barriers to the expansion of that civilization’s influ-
ence are now collapsing. Whether intended or not, China’s application of
modern transport technology is helping contemporary rising China escape
the East Asia trap that hedged in imperial Chinese states.
More modestly, in terms of China’s current national security concerns,
Indian Ocean ports linked to China by rail and highway (and pipelines)
would diminish China’s vulnerability to any US naval blockade resulting
50 J.W. GARVER
Notes
1. Jean-Marc F. Blanchard, “China’s Twenty-First Century Maritime Silk
Road Initiative and South Asia: Political and Economic Contours,
Challenges, and Conundrums.” Geopolitics, 22, no. 2 (2017), 246–268.
2. This thesis, of geography conspiring to confine Chinese power to East
Asia, was developed most famously by C.P. Fitzgerald, The Chinese View of
Their Place in the World (Cambridge: Harvard University Press, 1964).
3. This is discussed in John Garver, China’s Quest: Foreign Relations of the
People’s Republic of China (New York: Oxford University Press, 2016).
4. Soviet efforts to defend the Chinese Eastern Railway against Japanese and
Chinese encroachment is investigated in George Alexander Lensen, The
Damned Inheritance: The Soviet Union and the Manchurian Crises
1924–1935 (Tallahassee: The Diplomatic Press, 1974). Stalin’s recovery
and defense of the same rights against China after Japan’s 1945 defeat is
described in O. Edmund Clubb, China and Russia: The “Great Game”
(New York: Columbia University Press, 1971).
5. This is described in John Garver, “Development of China’s Overland
Transportation Links with Central, Southwest, and South Asia, China
Quarterly 185 (2006), 1–22.
6. Tansen Sen, Buddhism, Diplomacy, and Trade: The Realignment of Sino-
Indian Relations, 600–1400 (Honolulu: University of Hawaii Press, 2003).
7. Owen Lattimore, Inner Asian Frontiers of China (Boston: Beacon Press,
1940).
52 J.W. GARVER
18. A map depicting the Irrawaddy Corridor is available in John Garver, The
Protracted Contest: Sino-Indian Rivalry in the Twentieth Century (Seattle:
University of Washington Press, 2001), 268.
19. Wang Jisi, “‘Xi Jin,’ Zhongguo diyuan zhanlue de zai pingheng”
[“‘Marching westward’: China’s Geostrategic Rebalance],” Huanqiu
shibao [Global Times], October 17, 2012, http://opinion.huanqiu.com/
opinion-world/2012-10/3193760.html.
References
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the West. Princeton: Princeton University Press, 2011.
Blanchard, Jean-Marc F. “Probing China’s Twenty-First-Century Maritime Silk
Road Initiative (MSRI): An Examination of MSRI Narratives.” Geopolitics 22,
no. 2 (2017): 246–68.
Clubb, Edmund O., China and Russia: The “Great Game.” New York: Columbia
University Press, 1971.
Fitzgerald, C.P. The Chinese View of Their Place in the World. Cambridge: Harvard
University Press, 1964.
Garver, John, China’s Quest: Foreign Relations of the People’s Republic of China.
New York: Oxford University Press, 2016.
Garver, John, “Development of China’s Overland Transportation Links with
Central, Southwest, and South Asia, China Quarterly, No. 185 (2006): 1–22.
Garver, John, The Protracted Contest, Sino-Indian Rivalry in the Twentieth
Century. Seattle: University of Washington Press, 2001.
Garver, John, “The Diplomacy of a Rising China in South Asia,” Orbis 56, no. 3
(2012): 391–411.
George, Alexander, The Damned Inheritance; the Soviet Union and the Manchurian
Crises 1924–1935, Tallahassee: The Diplomatic Press, 1974.
International Monetary Fund, Direction of Trade Statistics. http://elibrary-data.
imf.ort/DataReport.aspx?
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Manchurian Crises 1924–1935. Tallahassee: The Diplomatic Press, 1974.
Lattimore, Owen, Inner Asian Frontiers of China. Boston: Beacon Press, 1940.
McDougall, Walter A. Let the Sea Make a Noise: A History of the North Pacific from
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McGowan, Alan, Tiller and Whip staff: The Development of the Sailing Ship,
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Menzies, Gavin, 1421: The Year China Discovered America. New York: Harper
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54 J.W. GARVER
David Brewster
D. Brewster (*)
National Security College, Australian National University, Canberra, Australia
• China’s naval interests in the Indian Ocean are growing alongside its
maritime trade across the Indian Ocean, and this will likely include
establishing a naval presence at several Indian Ocean ports.
• These developments can be seen as part of growing number of mari-
time security interactions between the Pacific and Indian Oceans,
expressed through the idea of the “Indo-Pacific.”
• The new overland routes being built between China and Indian
Ocean have the potential to fundamentally change the nature of
China’s security relationships in the region.
• All of these factors may mean that in the long term China may
increasingly regard itself as a resident power in the Indian Ocean, not
just as an extra-regional power.
The particular geography of the northern Indian Ocean region has made it
a semi-enclosed strategic system in which extra-regional maritime powers
have historically predominated over the ocean and much of the littoral.
The Indian Ocean is largely enclosed on three sides, with few maritime
entry points from other oceans and seas and vast distances between major
ports. This creates a strategic premium for powers that are able to gain
control of the so-called maritime “chokepoints” and deny their rivals access
to ports within the region.
There is also an unusual scarcity of overland pathways between the
Indian Ocean and the Eurasian hinterland, reflecting formidable geo-
graphic barriers. Mountain ranges, deserts, and jungles extend across
southern Asia, cutting off much of the continent from easy access to the
sea. Indeed, until well into the twentieth century, there were no major
transport routes—roads, railways, or rivers—connecting the Indian Ocean
THE MSRI AND THE EVOLVING NAVAL BALANCE IN THE INDIAN OCEAN 57
with the Eurasian hinterland. This disconnect has caused major Eurasian
continental powers such as China to be economically and politically ori-
ented away from the Indian Ocean and has severely limited their presence
and influence in the region. Instead the Indian Ocean region has been
dominated by a succession of extra-regional maritime powers.
The Portuguese adventurer and imperialist Afonso de Albuquerque first
used a maritime chokepoint strategy in the fifteenth century in an attempt
to transform the Indian Ocean into a mare clausum (or “closed sea”) over
which Portugal had exclusive jurisdiction. The strategy of gaining control
of the Indian Ocean chokepoints has been more or less followed by a string
of maritime powers, including the Netherlands and Britain. Albuquerque’s
ideas continue to influence strategic thinking about the Indian Ocean.
Competition among major powers for control of overland access to the
Indian Ocean has been just as intense as competition at sea. The scarcity
of connections between the Indian Ocean littoral and the Eurasian hinter-
land means that the development of even a few routes into the hinterland
could have a considerable impact on the naval balance in the region.
Indeed, the extra-regional maritime powers that have dominated the area
for the last few centuries have acted several times to prevent Eurasian con-
tinental powers from developing new overland pathways to the ocean.
As part of the geopolitical jostling of the “Great Game,” Imperial
Britain saw any plans by continental powers to develop railways and ports
connecting to the Indian Ocean as threatening its control of India and the
region. In the late nineteenth century, Britain stopped Russian proposals
to build a railway across Persia to the port of Bandar Shahpur on the
Persian Gulf by creating a sphere of influence over southern Persia that
essentially gave it a veto over the project.1 A few years later, Britain ensured
Germany’s Baghdad Railway through Mesopotamia would not affect the
naval balance in the Indian Ocean by declaring a protectorate over the
Sheikhdom of Kuwait. In the 1980s, Washington (incorrectly) perceived
the Soviet intervention in Afghanistan as motivated by ambitions to create
a Soviet sphere of influence in southern Asia and establish a warm-water
port at Gwadar.
Importantly, these overland pathways or gateways operate in two direc-
tions, and control over them also has the potential to alter the strategic
balance in the Eurasian interior. During World War II, the United States
of America (USA) and Britain supplied vital war material to the Soviet
Union through Persia and to Nationalist China through Burma, which
played a critical role in ensuring these powers continued to fight against
58 D. BREWSTER
the Axis Powers, Germany and Japan. During this period, Burma and
Persia acted as essential, if tenuous, gateways between the Indian Ocean
and the Eurasian hinterland. The strategic importance of Burma/Myanmar,
and potentially also Pakistan, as gateways between the Indian Ocean and
the Eurasian hinterland is now reasserting itself, primarily due to China’s
ambitions to carve new overland pathways, through mountain ranges,
jungles, and deserts, to the ocean. The impact of these new pathways and
related transportation technologies (such as railways) in allowing China to
break out of its historical confines is explored in John Garver’s contribu-
tion to this volume (Chap. 2).
influence in this region—the world’s only region and ocean named after a
single state.”3 Many Indian strategic thinkers aspire to create a defensive
sphere of influence in the Indian Ocean within a more or less closed strate-
gic system. They apply geostrategic perspectives that are sometimes strik-
ingly similar to those of the British Raj.4 These include a somewhat
proprietary attitude towards the Indian Ocean and deep instinctive fears
about the potential for Asian land powers to penetrate the protective
Himalayan barrier that separates India from the Eurasian hinterland, a
nightmare that seemed about to come true during the Sino-Indian border
war of 1962.5
K. M. Panikkar, often regarded as the father of Indian naval strategy,
adopted British imperial thinking about the need for India to exercise
control over the entire Indian Ocean based on control of the maritime
chokepoints and major ports between.6 Panikkar was the exemplar of stra-
tegic thinking about the Indian Ocean as a closed system, advocating that
India should create a “steel ring” through controlling the farthest reaches
of the Indian Ocean.7 Indian strategic thinking continues to be strongly
influenced by his work, and this has contributed to India’s particular sen-
sitivity over the control of ports in the Indian Ocean and the development
of new overland pathways into the hinterland that may undermine the
closed nature of the system.8 Panikkar’s most famous book, India and the
Indian Ocean: An Essay on the Influence of Sea Power on Indian History,
deliberately named after the famous work by the nineteenth-century US
naval strategist Alfred Thayer Mahan, remains foundational to Indian stra-
tegic thinking about the Indian Ocean.
Over the last decade or so, China’s naval interests in the Indian Ocean
have also grown, more or less in line with its interest in protecting its trad-
ing routes across the northern Indian Ocean, particularly the routes car-
rying energy from the Persian Gulf. China had no material naval presence
in the Indian Ocean during the twentieth century but over the last decade
its regional role has grown, particularly in connection with its anti-piracy
deployments in the western Indian Ocean. Since December 2008, China’s
PLA Navy (PLAN) has almost continually had two–three surface vessels
in the Arabian Sea, in at least 24 separate deployments. In the last few
years the PLAN has also deployed conventional and nuclear submarines
and amphibious warships to the northern Indian Ocean as a part of its
familiarization exercises and as a demonstration of its capability to respond
to multiple threats. But China’s ability to project naval power into the
Indian Ocean is highly constrained: China is disadvantaged by the long
60 D. BREWSTER
distances from its home ports in the Pacific, its need to deploy its naval
forces to the Indian Ocean through narrow chokepoints in Southeast
Asia, and the limited and uncertain logistical support that it can access
when it arrives. Nevertheless, China’s growing naval presence in the
Indian Ocean, and particularly Beijing’s search for dependable access to
logistical support for its navy, is of major concern to India, which sees it as
presenting a significant challenge to its own strategic aspirations.
imperialistic European traders who entered into and began colonizing the
Indian Ocean littoral only a few years later. According to one writer in the
Global Times, Zheng He “did not invade, colonize or swindle, but went for
trade along with spreading amity and cracking down on piracy. Zheng He’s
fleet received welcome and assistance from the countries along the route,
and touching stories about Zheng He are still being told to this day.”35
It seems unlikely at time of writing that China will be able to organize the
Indian Ocean region to support the MSRI as part a single plan. Although
China has invited India to participate in the MSRI, Delhi views the initiative
with considerable suspicion. Indian Foreign Secretary S. Jaishankar called the
MSRI: “A [Chinese] national initiative devised with national interest, it is not
incumbent on others to buy it. Where we stand is that if this is something on
which they want a larger buy in, then they need to have larger discussions,
and those haven’t happened.”36 In May 2017, India refused to send repre-
sentatives to China’s international OBOR conference, which was intended to
showcase its new international leadership role among regional and world
leaders. But several other states in the region have indicated their desire to
participate in the MSRI project. Sri Lanka, in particular, has been an enthusi-
astic partner in the project, seeing it as a way of capitalizing on its location
midway across the Indian Ocean near the major sea lines of communication.
Beijing has not been entirely forthcoming about the details for the
MSRI, and the plan is still evolving. While much of the public discussion
about the MSRI has focused on China’s plans to develop ports and related
infrastructure, possibly of greater significance is the intention to develop
new production and distribution chains across the region, with China at
their center – perhaps something akin to Japan’s “Flying Geese” strategy
in the 1970s. This could drive the economic integration of much of the
northern Indian Ocean region with China in a manner similar to the eco-
nomic integration of Southeast Asia with China seen in recent decades,
with considerable strategic consequences for the region.
Ocean (via Myanmar and Pakistan). As will be argued later, the new
north–south pathways between the Eurasian hinterland and the Indian
Ocean may have greater strategic significance for the Indian Ocean region
than Chinese interests in its ports. The two key overland pathways to the
Indian Ocean would run through from the western Chinese province of
Xinjiang through Pakistan to Gwadar and from the southern Chinese
province of Yunnan through Myanmar to the Bay of Bengal.
The “Southern Corridor” through Myanmar would involve several
new connections to the Indian Ocean, including the Kunming–Yangon
road and river route, links to a new port at Kyaukpyu, and potentially, a
more ambitious Bangladesh China India Myanmar (BCIM) Corridor
through Myanmar and Bangladesh to India. Although the Kunming–
Yangon road-river route was under development for more than a decade,
it was not fully implemented as the Myanmar government stalled plans for
a new intermodal port at Bhamo on the Irrawaddy river. According to one
report, Myanmar’s former leader, General Than Shwe, did “not want to
see Chinese flags on the Irrawaddy river.”37
China has also developed the Kyaukpyu–Yunnan route as a new con-
nection to the Bay of Bengal; this work included the construction of a
deepwater port at Kyaukpyu and parallel oil and gas pipelines to Yunnan
province at a cost of more than USD $2.5 billion. The gas pipeline will
carry up to 12 billion cubic meters of gas annually from Myanmar’s off-
shore gas fields in the Bay of Bengal. The oil pipeline, with a capacity of
12 million tonnes of oil per annum, was built to transport oil direct to
China, avoiding the Malacca Strait and cutting shipping distances by
1200 km. The financial justifications for the oil pipeline are somewhat
questionable: one analyst has estimated that it will cost some USD $4
per barrel to deliver oil to Yunnan province by the pipeline, as compared
with some USD $2 per barrel if shipped via China’s Pacific coast.38 It
appears that the decision to build the oil pipeline was heavily influenced
by strategic considerations, principally Beijing’s concerns over creating
new oil supply routes that did not transit the Malacca Strait.39 But the
strategic value of Kyaukpyu port for China is limited by the lack of road
and rail links. The Kyaukpyu corridor was originally intended to also
include a 1200-km railway to Kunming, to be built at an estimated cost
of USD $20 billion. However, it seems that many in the Myanmar lead-
ership (both military and civilian) are uneasy over the strategic implica-
tions of the rail project, and there are also questions about its commercial
viability.
68 D. BREWSTER
Notes
1. Geoffrey Kemp and Robert E. Harkavy, Strategic Geography and the
Changing Middle East: Concepts, Definitions, and Parameters (Washington,
DC: Brookings Institution, 1997).
2. David Scott, “India’s ‘Grand Strategy’ for the Indian Ocean: Mahanian
Visions,” Asia-Pacific Review 13, no. 2 (2006), 97–129.
3. Donald L. Berlin, “India in the Indian Ocean,” Naval War College Review
59, no. 2 (2006), 60.
4. C. Raja Mohan, Crossing the Rubicon: The Shaping of India’s New Foreign
Policy (London: Palgrave Macmillan, 2003).
5. See, generally, David Brewster, India’s Ocean: The Story of India’s Bid for
Regional Leadership (London: Routledge, 2014).
6. Peter John Brobst, The Future of the Great Game: Sir Olaf Caroe, India’s
Independence and the Defence of Asia (Akron: University of Akron Press,
2005), 13.
7. K. M. Panikkar, India and the Indian Ocean: An Essay on the Influence of
Sea Power on Indian History (London: George Allen & Unwin, 1945), 95.
8. The Indian Navy’s 2007 strategy document expressly invokes Albuquerque’s
name to justify India’s strategy of controlling the Indian Ocean chokepoints.
Indian Navy, Freedom to Use the Seas: India’s Maritime Military Strategy
(New Delhi: Integrated Headquarters, Ministry of Defense, 2007), 59.
9. Indian companies, which have been slower off the mark in investing out-
side of India, are involved in port projects at Sittwe (Myanmar) and
Chabahar (Iran).
10. http://www.hutchison-whampoa.com/en/businesses/port.php.
11. “The New Masters and Commanders,” The Economist, June 8, 2013, 52.
12. ‘Now for the next 100 years’, The Economist, August 16, 2014, p. 34.
13. See Amitendu Palit’s chapter (Chap. 8) for a discussion of other issues that
are relevant for evaluating the viability writ large of China’s port projects.
74 D. BREWSTER
26. Charlotte Gao, “China Officially Sets Up Its First Overseas Base in
Djibouti”, The Diplomat, 12 July 2017.
27. Davd Kostecka, “The Chinese Navy’s Emerging Support Network in the
Indian Ocean,” China Brief 10, no. 15 (2010), https://jamestown.org/
program/the-chinese-navys-emerging-support-network-in-the-indian-
ocean; and James R. Holmes and Toshi Yoshihara, “China’s Naval
Ambitions in the Indian Ocean,” Journal of Strategic Studies 31, no. 3
(2008), 379–380.
28. Ye Hailin, “Securing SLOCs by Cooperation—Chinese Perspectives of
Maritime Security in the Indian Ocean,” 2009, Mimeo.
29. Christopher D. Yung and Ross Rustici, Not an Idea We Have to Shun:
Chinese Overseas Basing Requirements in the Twenty-First Century
(Washington, DC: National Defense University Press, 2014).
30. David Brewster, “An Indian Ocean Dilemma: Sino-Indian Rivalry and
China’s Strategic Vulnerability in the Indian Ocean,” Journal of the Indian
Ocean Region, 11, no.1 (2015), 48–59.
31. James R. Holmes, “Inside, Outside: India’s ‘Exterior Lines’ in the South
China Sea,” Strategic Analysis, 36, no. 3 (2012), 358–63.
32. “China Afraid of India’s Naval Presence in the Ocean,” Zeenews.com,
August 13, 2009, http://zeenews.india.com/news/nation/china-afraid-
of-indias-naval-presence-in-the-ocean_555196.html.
33. “China Accelerates Planning to Re-Connect Maritime Silk Route,” China
Daily, April 16, 2014, http://www.chinadaily.com.cn/china/2014-
04/16/content_17439523.htm.
34. See, for example, Jin Shaoqing, ed., Zheng He’s Voyages down the Western
Seas (Fujian, China: China Intercontinental Press, 2005).
35. Yang Jiechi, “Mutual Trust Foundation of New Silk Road,” The Global
Times, April 3, 2015. This narrative of peaceful exploration is challenged
by other writers. See Howard W. French, Everything under the Heavens:
How the Past Helps Shape China’s Push for Global Power (New York: Knopf,
2017), p. 103.
36. Charu Sudan Kasturi, “Indian Wrinkle on Chinese Silk,” The Telegraph,
July 21, 2015, https://www.telegraphindia.com/1150721/jsp/front-
page/story_32798.jsp.
37. Min Zin, “China-Burma Relations: China’s Risk, Burma’s Dilemma,” in
Burma or Myanmar? The Struggle for National Identity, ed. Lowell
Dittmer (Singapore: World Scientific, 2010), 271.
38. Andrew Erickson, “Pipe Dream: China Seeks Land and Energy Security,”
Jane’s Intelligence Review 21, no. 8 (2009), 55.
39. Bo Kong, “The Geopolitics of the Myanmar-China Oil and Gas Pipelines.”
In Pipeline Politics in Asia: The Intersection of Demand, Energy Markets,
and Supply Routes, NPB Special Report #23 (2010), 63.
76 D. BREWSTER
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CHAPTER 4
Xinmin Sui
In recent years, the international community has been fixing its sights on
how a rising China manages its relations with the outside world. China is
committed to innovation in both theory and practice, in line with main-
taining the continuity and stability of its foreign policy. In line with this, it
has unveiled such concepts as a community of interest; security and shared
destiny; a new pattern of major power relations; and neighboring diplo-
matic principles of amity, sincerity, mutual benefit, and inclusiveness. To
put its innovations into practice, in 2013 Chinese President Xi Jinping
proposed successively to build the Silk Road Economic Belt (SREB) and
the Twenty-First Century Maritime Silk Road (MSR), collectively known
as “One Belt, One Road” (OBOR) in order to boost comprehensive coop-
eration with relevant countries.1 Since then, the details of the OBOR ini-
tiative have become clearer, with the Chinese government issuing an
The author would like to express his gratitude to Drs. Jean-Marc F. Blanchard,
Gregory J. Moore, and Colin Flint for their help in improving this chapter.
He can be reached at xmsui@cfau.edu.cn
X. Sui (*)
Zhongyuan University of Technology, Zhengzhou, China
OBOR action plan.2 Furthermore, the plan has shifted gradually from
vision to implementation. Regarding the latter, China has launched a
number of major projects in hopes of bolstering connectivity with its
neighbors and enhancing international cooperation in economics and
technology. South Asia (SA), whose northwest region links parts of the
SREB and MSR geographically, is a crucial strategic area for China to
ensure regional security and stability, especially to implement its innova-
tions and the MSR initiative (MSRI). China’s strategy towards SA, there-
fore, is critical in understanding how the MSRI will unfold. But what is
China’s strategy towards SA? What opportunities and challenges are there?
How should China put the MSRI into practice in SA? This chapter will
tackle these important questions.
In terms of challenges to the execution of the MSRI, China will have to
deal with ideational innovation, economic risks, and political instability
because of the relevant participants’ domestic political disputes, and out-
side pressures. Further, as is demonstrated in various chapters in this edited
volume, it will have to contemplate syncing its plans with India’s proposals
for SA because of the significance of India’s attitude to the future of the
MSRI. With respect to implementation, the OBOR initiative requires
innovation in China’s diplomacy and regional policy if it is to succeed in
achieving its own strategic and economic goals. For example, the execu-
tion of the MSRI requires China to consider more evenly balanced policies
with India and Pakistan and an integrated policy towards SA.
The paper is divided into four sections. It first looks at the evolution of
China’s policy towards SA, which, generally speaking, has been character-
ized by a patchwork of bilateral relations. Second, it contemplates various
perspectives on China–SA interactions within the MSR and the strategic
objectives of the MSRI. Third, it studies the impact of the MSR on China’s
policy towards SA. The paper concludes by discussing paths and obstacles
to the implementation of the MSRI, and concludes the latter will deliver
economic benefits to both China and SA. It also argues China should pay
close attention to India’s security concerns when advancing MSRI.
Ceylon was undergoing at that time, while helping China access strategic
goods and break the US embargo against it. Although Ceylon worried
about India’s response to its warming relations with China, its negotiations
with China yielded one-sided political and economic concessions from its
new partner without requiring it to give up much in return.8
Against the backdrop of a global Cold War, a regional cold war in SA,
involving a contest between the India-Soviet Union alliance and the so-
called USA-China-Pakistan axis, emerged in the early 1970s.9 Over the
following (approximately) two decades China’s policy towards SA did not
go beyond the framework of confrontation between the two aforemen-
tioned groups, with Sino-Indian relations frozen in stalemate in the wake
of the border war in 1962. Top-leader reciprocal visits and senior-level
institutional exchanges between China and India from the late 1980s
through the early and mid-1990s laid the groundwork for improvement
of bilateral relations. After the mid-1990s, the significant improvement in
bilateral ties and the end of the Cold War led Beijing to adjust its policy,
from siding with Pakistan in Indo-Pakistani disputes to maintaining a bal-
ance between the two sides. For instance, China ceased pressing for a solu-
tion of the Kashmir dispute on the basis of United Nations (UN)
resolutions passed in 1948 and 1949, which had called for a popular ref-
erendum, and shifted to advocating bilateral talks based on the 1972
Indo-Pakistani Simla Agreement.10
Aside from embracing a more impartial policy, another significant
change in China’s SA policy since the mid-1990s was that Beijing began
to increasingly think about SA’s role in China’s energy security and trade.
In addition, it began to pay more attention to economic cooperation and
commercial gains in its SA policymaking. Even Myanmar, which is geo-
graphically situated in the northwest of Southeast Asia, was increasingly
taken into account in China’s regional integrated policy towards SA
because of its strategic location.
that since the 1980s, China has actually been integrating itself deeply into
the international system.
With regard to China–SA ties, it is important to keep in mind that, as
Adam Smith once articulated, only in an environment where its neigh-
bors are also rich, industrious, and commercialized, can a nation acquire
great wealth by means of foreign trade.22 Put differently, China cannot
live in either prosperity or safety as a rich man on the hill surrounded by
impoverished peoples. China is acutely aware of its symbiotic relationship
with the outside world and is therefore striving for win-win interactions.
China is willing to allow its neighbors and others worldwide to take a free
ride on its rise. These behaviors are the opposite of what the perspective
of geopolitics would lead us to infer were the most likely. Thus, geo-
polinomics is a better framework for interpreting China’s strategic objec-
tives in regard to the MSRI in SA. More specifically, China aims to bolster
its economic interests and safeguard its sea lines of communications
(SLOCs) in the North Indian Ocean, while also enhancing mutual confi-
dence and gains in the relations between China and SA states, especially
between itself and India.
In the text below, I discuss what China is doing and could do in future to
help bring about the implementation of the MSRI.
Challenges to the MSRI
The biggest challenge to the success of the MSRI is not material but ide-
ational.51 Globalization and regional integration have intensified interde-
pendence amongst the members of the international community.
Leadership and governance styles often favor going far beyond a situation
in which there is a balance of power; and states seek hegemonic control
over raw materials, sources of capital, markets, as well as competitive
advantages in the production of high valued goods. Hegemonic stability
theory argues that the more one state dominates the world political econ-
omy, the more cooperative interstate relations will be.52 In contrast, mul-
tilateralism emphasizes the ability of international regimes, and a different
mindset, to play a key role in promoting international cooperation and
maintaining global peace.53
China’s ideas of a community of shared interests, destiny, and responsi-
bility, and a neighborhood diplomacy of amity, sincerity, mutual benefit,
and inclusiveness, show its policies are in conformity with the tide of inter-
dependence and that it is exploring new models to keep the international
community stable and prosperous. As President Xi said:
CHINA’S STRATEGY TOWARDS SOUTH ASIA IN THE CONTEXT... 95
The old mindset of zero-sum game should give way to a new approach of
win-win and all-win cooperation. The interests of others must be accom-
modated while pursuing one’s own interests, and common development
must be promoted while seeking for one’s own development. The vision of
win-win cooperation not only applies to the economic field, but also to the
political, security, cultural and many other fields. It not only applies to coun-
tries within the region, but also to cooperation with countries from outside
the region. We should enhance coordination of macroeconomic policies to
prevent negative spill-over effects that may arise from economic policy
changes in individual economies. We should actively promote reform of
global economic governance, uphold an open world economy, and jointly
respond to risks and challenges in the world economy.54
Not all states share the idea of a community of common destiny and win-
win cooperation. The mindset of balance of power and zero-sum game
still exists. Although the MSRI was borne out of geo-economic consider-
ations, others still evaluate China’s intentions from a geopolitical perspec-
tive. In fact, there appears to be some spillover of geo-economic
cooperation into the field of political security, which is a positive fillip to
the strategic interaction among relevant states. Economic cooperation
under the aegis of the BCIM and the Economic Cooperation Framework
Agreement (ECFA), for instance, encourages confidence-building among
relevant participants.
Thinking about SA specifically, challenges to the MSRI come from
three directions. The first challenge is that of unpredictable political and
security risks. Political instability in SA not only hampers regional states’
economic and social development, but also damages MSRI cooperation
initiatives. In Myanmar, domestic political discord led the Myanmar gov-
ernment to successively pause or delay the development of the Myitsone
hydropower plant, which has a planned total investment USD $3.6 billion,
and the Letpadaung copper project, which has a planned investment
exceeding USD $1 billion.55 Even though Pakistan is an all-weather friend
of China, its domestic political situation may have an impact on the CPEC
and, in turn, the MSRI. In Sri Lanka, the Colombo Port City (CPC)
project was halted in early 2015 by newly elected President Maithripala
Sirisena in the name of an environmental re-evaluation, while the real rea-
sons were a domestic political struggle and opposition from India. Facing
a grave economic crisis, the Sri Lankan government appealed to China for
favorable debt terms and a resumption of the suspended program. Although
96 X. SUI
China just develops normal relations with other states in SA, the Indian
strategic community often suspects China’s goal is to contain India’s rise
or to encircle it. With regard to the MSRI, India is ambivalent and on its
guard in contrast to other states in SA.
Conclusion
As with the SREB, China has proposed the twenty-first-century MSRI for
reasons primarily driven by the geo-economic logics of narrowing the gap
domestically between developed regions and underdeveloped ones, and
ensuring stable supplies of resources and the open SLOCs on which China
is deeply dependent through an upgrade of reform and opening. The
OBOR initiative does not represent either a response to America’s strategy
of rebalance, as some suppose, or a strategic encirclement of India.
The MSRI benefits not merely China’s industrial upgrading and shift-
ing growth pattern, but will also boost the industrialization and economic
development of SA countries through a huge level of infrastructure invest-
ment and the construction of industrial parks and an export-processing
zone.
When implementing the MSRI by building economic corridors across
borders, China should pay careful attention to India’s concern over its
comprehensive security. In the meantime, it is necessary for China to take
the initiative to match India’s policies or proposals in SA such as Indian
Prime Minister Narendra Modi’s Mausam, Cotton Routes, and Spice
Programs.
Notes
1. See Xi Jinping, “Follow the Trend of the Times and Promote Global Peace
and Development,” MGIMO University, March 23, 2013; “Build a New
Model of Major-Country Relationship between China and the United
States,” main points of the speech at the press conference with US President
Barack Obama, Annenberg Estate, California, June 7, 2013; “Diplomacy
with Neighboring Countries Characterized by Friendship, Sincerity,
Reciprocity and Inclusiveness,” Seminar on China’s Neighborhood
Diplomacy, October 24, 2013; “Work Together to Build the Silk Road
Economic Belt,” Nazarbayev University, Astana, Kazakhstan, September
7, 2013; “Work together to Build a Twenty-First-Century Maritime
Road,” People’s Representative Council of Indonesia, October 3, 2013.
These speeches and talks can be found in Xi Jinping, The Governance of
China (Beijing: Foreign Languages Press, 2014), 297–308, 315–329.
98 X. SUI
29. China cannot have a holistic strategy towards SA partly because of a lack of
integrated identity in SA. To a certain extent, this lack of a regional identity
is attributable to India’s strategic thinking as well as various impediments
to the integration of SA politics, economy, and society. So, China’s policy
towards SA mainly remains at the level of bilateral interaction between
China and relevant states.
30. Cohen, Geopolitics, 7–9.
31. Zhao Gancheng, “On OBOR Strategy from South Asia Perspective and
India’s Choice,” The Contemporary World no. 6 (2015): 20–21.
32. See the second part of David Brewster’s chapter (Chap. 3) and David
Karl’s contribution (Chap. 6) herein for further information on this point.
33. http://finance.ifeng.com/a/20141029/13228636_0.shtml.
34. Here, the so-called “triple dependence dilemma” refers to three aspects on
which China’s security deeply depends: the importing of basic resources;
SLOCs from China’s coast through the South China Sea, the Strait of
Malacca, and across the Indian Ocean; and foreign oil-tanker fleets.
35. On the String of Pearls, see Christopher J. Pehrson, “String of Pearls:
Meeting the Challenge of China’s Rising Power across the Asian Littoral,”
The Strategic Studies Institute (2006). On the presence of PLAN in the
Indian Ocean, see Sudha Ramachandran, “China Moves into India’s
Backyard,” Asia Times, March 13, 2007, www.atimes.com/atimes/
South_Asia/IC13Df01.html. Additional information on both these topics
can be found in Brewster’s contribution to this volume (Chap. 3).
36. Juthathip Jongwanich et al., “Trade Structure and the Transmission of
Economic Distress in the High Income OECD Countries to Developing
Asia,” ADB Economics Working Paper Series no. 161 (2009), http://www.
adb.org/sites/defult/files/pub2009/Economics-WP161; and Doughyun
Park and Kwanho Shin, “Can Trade with the People’s Republic of China
Be an Engine of Growth for Developing Asia?” ADB Economics Working
Paper Series no.172 (2009), http://www.adb.org/sites/default/files/
pub/2009/Economics-WP172.
37. Ye Hai-lin, “Does China Need India’s Participation in MSR?” 2015,
http://www.thepaper.cn/newsdetail_fora=ward_1295387.
38. World Bank, South Asia: Growth and Regional Integration 2006
(Washington, DC: 2006). See also Pratap Bhanu Mehta, “Sovereignty
Tradeoffs and Regional Integration: Theoretical and Comparative
Reflections,” in International Relations Theory and South Asia, Vol. I,
edited by E. Sridharan (New Delhi: Oxford University Press, 2011), 46.
39. Asian Development Bank, “Asian Economic Integration Monitor,”
(2014), http://reliefweb.int/sites/reliefwebs.int/files/reliefweb_pdf/
node-654319.pdf.
40. The poor infrastructure and the initial stage of industrialization in SA have
seriously impeded cooperation both among between intra-regional states
CHINA’S STRATEGY TOWARDS SOUTH ASIA IN THE CONTEXT... 101
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www.rediff.com/news.
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China Be an Engine of Growth for Developing Asia?” ADB Economics Working
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104 X. SUI
Jabin T. Jacob
based on high moral principles. Over the years, our two countries have ren-
dered each other mutual understanding, mutual trust and mutual support.
Rising above changing times and standing to the tests of international vicis-
situdes, our relationship has been exemplary for state-to-state relations …
Because our relationship has withstood the tests of trials and tribulations …
Because our relationship is one that is between men of noble characters.1
Whatever “high moral principles” might mean and the high rhetoric not-
withstanding, the China–Pakistan “all-weather friendship” is a relation-
ship of some substantial national-interest calculation on both sides. In the
immediate aftermath of 9/11, the warming of Indo-American ties created
pressure on China to improve its relations with India and thus China had
a greater geopolitical interest in keeping Pakistan at a distance. The recent
warming of the relationship has much to do with increasing attacks on
Chinese citizens and assets on Pakistani territory as well as the ingress of
Pakistan-origin terrorism and instability into Xinjiang via Uyghur separat-
ists, and perhaps, also via religious fundamentalists. Nevertheless, as the
geopolitical context changed with the United States of America (USA)
withdrawing from Afghanistan and facing fresh trouble in West Asia, as
well as equally importantly, reeling from the effects of the global financial
crisis, the Chinese policy calculus has also changed.2
One beneficiary of these developments has been Pakistan. After some
major issues in the mid-2000s, especially over terrorist attacks on Pakistani
soil against Chinese citizens and of which the thawing of Indo-Pak ties
during the same period might have been part of a cause-and-effect
dynamic, the China–Pakistan relationship seems to have picked up again.
The CPEC is a reflection of this. Xinhua has, in fact, termed the CPEC
“the ‘flagship project’ of China’s ambitious vision for a modern recon-
struction of the Silk Road” and Xi Jinping’s visit to Pakistan underlines
this aspect.3 And yet Xi’s visit was also not a single issue-based visit: terror-
ism continues to buffet ties even as strategic military relations continue to
be emphasized and strengthened. Chinese scholars have also not been shy
of highlighting the importance of the terrorism factor in China’s relation-
ship with Pakistan.4
Xi’s visit to Pakistan was the first by a Chinese head of state since Hu
Jintao’s visit in November 2006 and took place after several postponements.5
THE CHINA–PAKISTAN ECONOMIC CORRIDOR... 107
Military Ties
The Sino-Pak military relationship continues to be important.13 China’s Central
Military Commission (CMC) members have also either visited Pakistan or
hosted Pakistani armed forces chiefs,14 often promoting, among other things,
joint development of weapons platforms, most prominently the JF-17
(Xiaolong) multirole fighter aircraft. Eight of these from the Pakistan Air Force
escorted President Xi’s plane into Pakistan in 201515 while six had done so
when Premier Li Keqiang had visited Pakistan in 2013.16 Pakistan and China
are also planning to sell these fighters to third countries,17 as well as their
108 J.T. JACOB
jointly developed Khalid tank.18 There has also been an arrangement in place
for some time between the two countries under which the Pakistanis allow the
Chinese to have access to Western military technologies.19
Chinese Defense Minister Chang Wanquan in a meeting with visiting
Pakistani Chief of Air Staff Air Marshal Tahir Rafique Butt in November
2014 sought to increase “practical cooperation in various fields with the
Pakistan military, such as military training, equipment and anti-terrorism.”20
It is no surprise then that Pakistan in 2015 approved the largest ever mili-
tary deal between the two countries, and also China’s largest arms-export-
ing deal, for eight submarines worth some USD $5 billion.21 Chinese
analysts also view the development of Gwadar port in Balochistan as guar-
anteeing maintenance and supply for Chinese naval vessels in the Indian
Ocean.22 That there will be opportunities in the military dimension for
China from the BRI is a given in many debates outside China.23 The CPEC
and its security is a case in point. Two Chinese ships handed over to the
Pakistani navy in January 2017 were specifically slated for deployment at
Gwadar “to ensure joint security along the CPEC sea route.” That such
military-equipment transfers to Pakistan will continue is evident in the fact
that the Chinese are constructing two more ships for Pakistan.24
Meanwhile, the Pakistanis have also engaged in their own brand of
flattery conferring, for instance, the Nishan-i-Imtiaz military honor on
General Xu Qiliang (then People’s Liberation Army [PLA] Air Force
[PLAAF] commander and now CMC Vice-Chair) in 200925 and the
Nishan-i-Pakistan on Li Keqiang during his visit there. Similarly, a book
launch was held for the Xi Jinping-authored The Governance of China, at
which a host of Pakistani leaders and commentators, led by the Pakistani
president Mamnoon Hussain himself, had nothing but the sweetest praise
for the book.26 No less a figure than the Pakistani prime minister’s brother
wrote an op-ed in the Global Times, praising the Xi visit to Pakistan.27
China or exclusively, for long periods of history. And yet today it is China
that appears to have run away with the game as it were, with India cut
out from Central Asia, struggling for influence in Southeast Asia, trying
to hold on to its dominant space in South Asia, and a bit player in West
Asia. India’s accession as full member to the Shanghai Cooperation
Organization in 2017 does not necessarily change this reality in the
immediate term.
The two main prongs of the BRI are actually overlays on pre-existing
networks of roads and railways that are now being fortified with additional
infrastructural capacity and new axes of communication branching off in
different directions. In South Asia, China has similarly attempted to incor-
porate the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor
and the Karakoram highway through Pakistan as part of the BRI. The lat-
ter, in fact, has a new nomenclature as the CPEC, with an extension up to
the Arabian Sea coast of Pakistan.
Xi’s visit, and earlier Li Keqiang’s, have tried to reset the relationship
with Pakistan away from one of purely military/Cold War-era transac-
tions and political stability interests to one of greater strategic depth,
integrating both China’s domestic economic development interests and
wider diplomatic goals in the neighborhood.30 Li has been quoted as say-
ing that the CPEC provided a strategic framework for China and Pakistan
to carry out “practical cooperation,” while Pakistan has been declared as
forming part of China’s ambitions for what it calls “a community of com-
mon destiny.”31
China and Pakistan operationalized a free trade agreement (FTA) in
2007 and had a bilateral trade of USD $13 billion in 2013, which was
expected to reach USD $15 billion by 2015 and USD $20 billion within
the following three years (Table 5.1).32
Major Chinese exports to Pakistan include mobile phones, machinery,
and steel, while Pakistani exports to China included mainly textile yarn,
agricultural products, and unwrought copper and copper products.
Islamabad has highlighted a large trade deficit, the need to ensure easier
access for Pakistani products in China and for a level playing field for
exporters from Pakistan, and the need to encourage investment and trade
delegations from China for bulk purchases from Pakistan.33 Why is this call
of encouragement to Chinese investment and delegations needed, even
after the CPEC announcement? Clearly, there are concerns in Pakistan
about the pace of progress of the CPEC. The Pakistani government has in
fact blamed this on the Chinese side.34
110 J.T. JACOB
Table 5.1 Pakistan–
Trade
China Bilateral Trade,
2005–2014 Year (USD $ billions)
2005 2.798
2006 3.420
2007 4.787
2008 5.467
2009 4.794
2010 6.743
2011 8.159
2012 9.309
2013 9.295
2014 11.874
important projects announced in the early days of the CPEC include USD
$3.7 billion worth of upgrades of the 1681-km Karachi-Lahore-Peshawar
rail line, USD $2.8 billion for four coal-fired stations (totaling 1980 MW)
plus another USD $2.2 billion to develop two coal-mining blocks at Thar,
Sindh, a USD $2-billion LNG pipeline and terminal between Gwadar and
Nawabshah, USD $2.09 billion for two coal-fired generation plants at
Port Qasim, Karachi (total capacity of 1320 MW), USD $930 million
links to the Karakoram highway from Islamabad and Havelien, and USD
$230 million for building an international airport at Gwadar.42 Including
the airport, Chinese investment in the Gwadar project totals some USD
$1.62 billion, also covering the construction of an eastern expressway
linking the harbor and coastline, a breakwater, and nine other projects
expected to be complete in three to five years.43 Just over USD $1.5 bil-
lion has also been committed for a 900-MW solar power park in
Bahawalpur, Punjab and a 100-MW wind farm at Jhimpir, Sindh.44
According to a 2015 figure, 21 agreements on gas, coal and solar energy
projects were expected to add some 16,400 MW of electricity—roughly
equivalent to Pakistan’s existing capacity.45
Subsequently however, many projects under the CPEC framework have
been moved around in the order of priority for completion for a variety of
economic, political, and legal reasons. Questions about the progress and
viability of CPEC projects inevitably depend on a range of factors includ-
ing China’s own economic growth and conditions and the state of play of
politics in Pakistan itself, which is explained in the next section.46 Suffice it
to say here, the Chinese have some experience working in Pakistan and
dealing with Pakistani conditions, but both the scale of the CPEC and of
Pakistan’s economic underdevelopment and political and social conditions
demand an altogether different sort of commitment and patience in order
to ensure that these investments and projects fructify. The Chinese might
well receive a crash course in the politics and society of their South Asian
neighbors that their close military and diplomatic partnership in the past
has not prepared them for.
Security
Security is of course, the first obstacle. Chinese leaders have repeatedly
called on Pakistan to take effective measures to ensure the safety of Chinese
projects and people in Pakistan.48 The CPEC is now additional reason for
the Chinese to stress security cooperation with Pakistan, but this is not
entirely a one-way street, with Pakistan and China gaining political and
military leverage against India and the Chinese not publicly demanding
much of Pakistan internally. However, there appears to be at least some
amount of pressure, in discussions on countering terrorism, for the
Pakistanis to also walk the talk. The connection between CPEC and
Pakistan’s security situation is explicit, for instance, in an article which is
headlined “China vows to back Pakistan’s anti-terrorism efforts,” but
which also talks about China’s willingness “to work closely with Pakistan
to upgrade our strategic coordination, deepen all-round cooperation, and
step up the building of [the] China–Pakistan economic corridor.”49
Indeed, it was at the aforementioned meeting between Meng and
General Sharif that the former declared that China was “willing to enhance
cooperation with Pakistan in combating terrorism to protect the security
of Chinese personnel and institutions in Pakistan and maintain national
and regional security and stability.”50 The emphasis in this statement is, of
course, on protecting the security of Chinese citizens and institutions, no
doubt a reference to Chinese economic assets and enterprises. Here per-
haps, is an early indication that China might be willing to take a more
direct role in Pakistan where Chinese interests are at stake. It is possible
that Pakistan’s announcement that it plans to train more than 12,000
security personnel and establish a “special unit” to protect Chinese work-
ers in the Corridor are directly linked to these interactions.51
For his part, then Pakistan Army chief General Sharif, at an inspection of
a road project under the CPEC in Balochistan, declared that the “CPEC
and Gwadar Port will be built and developed as one of the most strategic
deep sea port in the region at all costs.” In his speech during the inspection
tour he also made references to the support of the local people and to
Pakistan’s anti-terror operation, Zarb-e-Azb, in effect also highlighting the
challenges the CPEC faced.52 Meanwhile, Chinese analysts are careful.
Wang Dehua, formerly of the Shanghai Institutes for International Studies,
has been quoted as saying that while the problems of building infrastructure
in Balochistan, including those posed by militants, could be overcome, this
would take time.53 Shi Yinhong (Renmin University) has also stated that
THE CHINA–PAKISTAN ECONOMIC CORRIDOR... 113
Chinese enterprises were not only worried about their profits in Pakistan,
but also about security and domestic stability there.54 Zheng Yu of Fudan
University has also highlighted the risks to China from BRI investments in
unstable nations, of which Pakistan is surely one. At the same time, there
are also attempts by other Chinese commentators to present a rosier pic-
ture on the security front. One Global Times op-ed, for instance, following
an attack in June 2016 against Chinese engineers working on a CPEC
project in Sindh, suggested that even as more such attacks might be
expected due to “Pakistan’s domestic and foreign opposition groups” these
in effect also implied that the CPEC was “achieving real progress.”55 There
is also now talk of a joint counter-terror command between the armies of
the two countries, which has come about specifically in the context of the
security of the CPEC.56
Regional Divides
There are Pakistani news reports about the difficulty of achieving consen-
sus on the CPEC between the various political parties, especially on the
exact alignment of the route.57 The Chinese too, have acknowledged this
reality, and that of a general history of political instability in Pakistan.58 As
time passes, and the results take time to show, there is every likelihood that
fissures will solidify or re-emerge between the provinces in Pakistan. Punjab
has been specifically accused by Balochistan and Khyber Pakhtunkhwa
leaders of manipulating Chinese investments to serve its own interests and
dominate the Pakistani economy, resources, and institutions. The conten-
tion is that while the mineral resources being exploited belonged to the
poorer provinces, as did many of the important trade routes, the energy
infrastructure was being hoarded by Punjab. Provincial politicians have also
lobbied Chinese diplomats and officials, including Xi.59
During the Xi visit, Pakistani Prime Minister Nawaz Sharif took care to
mention that the CPEC would “benefit all provinces and areas in Pakistan,
and transform our country into a regional hub and pivot for commerce and
investment” (emphasis mine). Xi attempted to strike a similar note, saying,
“These projects span across the provinces and areas of Pakistan and the two
sides have also made it clear that they will include the central and western
lines of the corridor in the long and midterm plans …” (emphases mine).60
It is also the chief minister of Balochistan province who is the patron-in-
chief of the Pakistan–China Economic Corridor Council (PCECC). At the
inauguration of the Council, Federal Minister for Planning and Development
114 J.T. JACOB
Ahsan Iqbal declared, “I feel very proud after signing the CPEC docu-
ments from [the] Pakistan side because I know this historical project will
open a gate of opportunities for all areas and people of Pakistan.”61 The list
of 51 Memorandums of Understanding signed between Pakistan and
China does appear to cover all Pakistani provinces.62
Such regional divides in Pakistan could create a political backlash for
Chinese interests as the CPEC matures, and the Chinese seem well aware
of this.63 Awami National Party leader Iftikhar Hussain has warned that
the dissatisfaction over the CPEC could turn Khyber Pakhtunkhwa and
Balochistan against China, stating, “If someone is determined to commit
an economic genocide of our people, it is my duty to resort to everything
possible to defend them … If our legal and peaceful protests are not heard,
we will be forced to adopt illegal and extraconstitutional means.”64 These
attitudes and positions within Pakistan could affect not only the progress
of the CPEC but also the stability of the Pakistan government itself.
Pakistani Expectations
According to a Pew Research Center survey in 2014, 78 percent of
Pakistanis held a favorable opinion of China, compared to just 14 percent
having a similar view of the USA.65 As Chinese involvement in the Pakistani
economy deepens, the two peoples will come into greater contact with
each other, or at the very least, ordinary Pakistanis will certainly come into
greater contact with actual Chinese entities and citizens in a far more con-
sequential way than they ever have before. It will no longer only be the
speeches and statements of their leaders that will inform them about
China, but actual bread-and-butter issues of roads and employment,
including dealing with Chinese businessmen, investors, work supervisors,
and so on. This then creates the risk that the positive images that both
sides have held of each other for so long will also begin to be shaken. Some
Chinese scholars foresee precisely this possibility and have suggested that
the Chinese government therefore increase its understanding of local cul-
tures and communication with local communities.66
The USD $1.4-billion Karot hydropower project, scheduled to become
operational by 2020, will be run by the Chinese for 30 years before being
handed over to Pakistan.67 In other words, this is a build-operate-transfer
project, but with a significant time lag. A Chinese news report on the
Port Qasim power plant outside Karachi also indicated that “in the long
run, Chinese companies would have the option to relocate some of its
THE CHINA–PAKISTAN ECONOMIC CORRIDOR... 115
Economic Returns
The issue of returns from its investments is also an important question for
China. The Pakistanis themselves realize that “Chinese investors are not
here for charity.”74 Since Chinese investments abroad are encouraged,
partly in order to address domestic overcapacity problems and subse-
quently declining returns, the question is whether Pakistan can repay
its loans and if it will provide the best return on Chinese investments.
116 J.T. JACOB
If Pakistan does not do this, then China will not only have lost investment
returns, however low their value at home, it will also face the prospect of
being unable to get its investments back, a lose–lose scenario for the two
countries. Even though Pakistan has exempted Chinese investors in power
generation from income tax, sales tax, promotional tax, and withholding
tax, and also provides support in the form of legal assistance, foreign-
exchange guarantees, export credit, indexing of energy prices to inflation
rates, and so on, questions about China’s eventual return on its investment
are valid given the current state of the Pakistani economy.75 In essence, this
is a bit of a catch-22 situation whereby Pakistan needs massive infusions of
capital to get its underdeveloped economy and human resources into any
sustainable state of development and growth, but its political instability,
weak rule of law, difficult civil-military tensions and unstable security situa-
tion conspire also to heighten the risks for such infusions of capital.
The combination of equity investments and loans that is the main fea-
ture of the BRI projects will be supported by a combination of public and
private investors, as well as both existing and new international organiza-
tions.76 China, therefore, seeks to spread the risk a little, even as it portrays
itself as taking the lead in creating a new model of state-to-state relations
as well as that of a power that rises peacefully, and also does so by means
of sharing the benefits of its own economic development and growth.
However, a viable balance of equity and loans over the long term is diffi-
cult to achieve in the best of situations and China is trying to achieve this
in one of the most politically unstable and dangerous countries in the
world, one in which its own citizens have already been targeted on account
of nationality. A Pakistani analyst writing in the Global Times himself
pointed out his country’s “past indifferent record” on seeing projects
through to completion, warning that “[w]ith the whole world competing
for Chinese investment, there is no room for backsliding.”77
Clearly, then, returns in terms of money cannot be the only driving fac-
tor for Xi and his colleagues at the top rungs of the Chinese leadership.
There are, thus, certainly strategic geopolitical imperatives that drive the
CPEC but what is less clear is how Xi will manage the internal contradic-
tions within the Chinese system whereby the central and provincial-level
state-owned enterprises (SOEs) have increasingly displayed a mind of their
own, despite the anti-corruption crackdown aimed at making them fall in
line with the Party’s injunctions. In the main, this has to do with these
enterprises’ need to fulfill their primary mandate, which is to turn in a
THE CHINA–PAKISTAN ECONOMIC CORRIDOR... 117
profit. SOE leaders and managers, particularly those at the provincial level,
are likely to be less concerned about grand national strategic objectives
and more about safety and profits. In other words, it is possible that China
will not deliver on all its promises to Pakistan. Apart from all the factors
mentioned above, the progress of the CPEC will also depend on how
much sustained interest Chinese leaders take in Pakistan; this outcome will
depend partly on geopolitics and for China will involve issues and areas
that do not necessarily have anything to do with Pakistan.
All of this also has implications for the larger China-India-Pakistan
triangle.
CPEC and India
Beyond the conflictual dynamics, there are other ways in which the CPEC
is viewed in Pakistan and in China. For Pakistan, the CPEC connects
China with West Asia and Central Asia, and the Chinese see the Corridor
as providing them with “an important land route to its markets in Europe
and Africa.”78 While the Pakistanis see the CPEC as part of Chinese stabi-
lization efforts in the AfPak (Afghanistan and Pakistan) region, they also
view the CPEC as “ultimately expand[ing] to link other countries, stimu-
lating an economic and trade boom in the region.”79 Surely, then India
must also be part of the mix.
Indeed, Pakistani analysts have noted that despite the boundary dispute
with India and tensions due to growing Indo-US ties, China has tried to
maintain good relations with India with a growing economic relationship.
Pakistani leaders “need to learn from the sophistication of China’s foreign
policy.”80
A People’s Daily commentary specifically stated that “China, Pakistan and
India have all recognized that the zero-sum game can only result in mutual
pain” before going on to state that “Sino-Pakistan cooperation is not only
conducive to improving the trade and investment environment in Pakistan,
but also helps improve the security environment in [the] South Asia and
Central Asia region as well as reduce security risks in the region.”81 In the
latter statement, it is not entirely clear if the “security risks” are emanating
from India or from Pakistan, but as it is left open-ended, there is a certain
display of neutrality and an acknowledgement that economic engagement,
perhaps involving India, was essential for stability in the region.
China’s BRI strategy presents India with a challenge from which it can-
not run away. Indian policymakers have declared that while India joined
118 J.T. JACOB
Conclusion
On his arrival in Islamabad, Xi declared that he felt like he was “returning
to the home of my own brother.”90 Chinese Foreign Minister Wang Yi
characterized China and Pakistan as “iron brothers” and stated that the
brotherhood “will never go rusty.”91 Perhaps not, but the brotherhood
certainly has cracks in it. An op-ed in the Global Times on the eve of the Xi
visit seemed to be at pains to emphasize:
The need to stress this aspect suggests there are, in fact, tensions in the
relationship, or that there is a need for China to be seen as a neutral, hands-
off partner perhaps not just by Pakistan but also by other external actors.93
Leaving aside the security situation, it is not clear the Pakistanis are
likely to give the Chinese any quarter when it comes to taking their cut—
the lack of a strong legal framework or of much organized labor in
Pakistan, and the reality of the way businessmen-politicians work there, for
example former Pakistani President Asif Ali Zardari or Prime Minister
Nawaz Sharif, suggests that there are at least as many opportunities for
rent-seeking on both sides as there are for national development in
Pakistan or for China to achieve its strategic goals.
In effect, just as in the case of the Sino-Indian economic relationship
where the bonhomie evaporated as soon as India’s trade surpluses turned
into persistent trade deficits with China, the CPEC and its attendant con-
sequences might actually introduce more complications in the relation-
ship, which cannot always be transcended at the highest leadership level or
by the Pakistani security forces capturing and handing over a few Uyghur
militants to the Chinese.
Indeed, problems will not be far from the surface once the Corridor
finally starts taking shape, in particular if the promised benefits do not
materialize for certain sections, ethnic groups, or provinces in Pakistan.
If this happens, then China will be far more exposed and vulnerable to
Pakistan’s internal political dynamics than it has hitherto been. And this is
not something it can really rely on either the Pakistan Army or the central
government civilian leadership to help it tackle.
THE CHINA–PAKISTAN ECONOMIC CORRIDOR... 121
Notes
1. The People’s Republic of China, Ministry of Foreign Affairs, “Remarks by
Foreign Minister Wang Yi at the Inauguration of The Year of China-
Pakistan Friendly Exchanges,” February 13, 2015, http://www.fmprc.
gov.cn/mfa_eng/wjb_663304/wjbz_663308/2461_663310/
t1244615.shtml.
2. For more on these concerns in China’s policy towards Pakistan, see Jabin
T. Jacob, “China-Pakistan Relations: Reinterpreting the Nexus,” China
Report, 46, no. 3 (2010), 216–228; and Jabin T. Jacob, “The Future of
China-Pakistan Relations after Osama bin Laden,” Associate Paper, Future
Directions International, August 8, 2011, http://futuredirections.org.
au/wp-content/uploads/2011/08/FDI%20Associate%20Paper%20-%20
08%20August%202011.pdf.
3. “China Voice: Old friends, new cooperation,” Xinhua, June 4, 2015,
http://news.xinhuanet.com/english/2015-06/04/c_134297754.htm.
Other reports call the CPEC “key” to or an “important model” for the
entire BRI. See for example, Chu Daye, “Pakistan Corridor Key to ‘One
Belt, One Road,”’ Global Times, April 16, 2015, http://www.globaltimes.
cn/content/917083.shtml.
4. See, for example, Shi Zhiqin and Lu Yang, “The Benefits and Risks of the
China-Pakistan Economic Corridor,” Carnegie-Tsinghua Center, December
21, 2016, http://carnegietsinghua.org/2016/12/21/benefits-and-risks-
of-china-pakistan-economic-corridor-pub-66507.
5. “Xi Jinping to Make First State Visit to Pakistan,” South China Morning Post,
February 13, 2015, http://www.scmp.com/news/china/article/1711762/
xi-jinping-make-first-state-visit-pakistan; and Ananth Krishnan, “China
Considers Presidential Visit to Pakistan Amid Security Concern,” India Today,
February 4, 2015, http://indiatoday.intoday.in/story/china-presidential-
visit-pakistan-amid-security-concerns/1/416916.html.
6. “Regional security discussed with China,” Dawn, October 29, 2013,
https://www.dawn.com/news/1052580.
7. “China Pledges Cooperation with Pakistan against Terrorism,” People’s
Daily Online, June 6, 2014, http://en.people.cn/n/2014/0606/c90883-
8737539.html.
122 J.T. JACOB
16. Mandip Singh, “Li Keqiang Visit to Pakistan: Assessing the Outcome,”
Institute for Defence Studies and Analyses, June 5, 2015, http://www.
idsa.in/issuebrief/LiKeqiangVisittoPakistan_mandipsingh_050613.
17. “Pakistani Air Commodore: 11 Countries Want to Purchase JF-17,” China
Military Online, January 27, 2015, http://eng.chinamil.com.cn/news-
channels/china-military-news/2015-01/27/content_6325314.htm.
18. “俄媒:中巴哈立德坦克若能大卖将击败西方坦克” (Emei: Zhong-Ba Halide
tanke neng da mai jiang jibai xifang tanke) [Russian Media: China-Pakistan
jointly developed “Khalid” tank, if sold, will challenge the hegemony of
Western tanks], Huanqiu Shibao [Global Times], February 16, 2015, http://
oversea.huanqiu.com/article/2015-02/5700703.html.
19. Jonah Blank, “Thank You for Being a Friend,” Foreign Affairs, October
15, 2015, https://www.foreignaffairs.com/articles/china/2015-10-15/
thank-you-being-friend.
20. “China, Pakistan Pledge to Strengthen Air Force Cooperation,” Xinhua,
November 14, 2014, http://news.xinhuanet.com/english/china/2014-
11/14/c_133790591.htm.
21. “China, Pakistan to Sign Largest Military Contract: Reports,” People’s Daily
Online, June 3, 2015, http://en.people.cn/n/2015/0403/c90786-
8873628.html.
22. Zhao Gancheng, Shanghai Institutes of International Studies, quoted in
Liu Sha and Chen Heying, “Gwadar Set to Be Regional Hub as Port
Readies Launch,” Global Times, April 15, 2015, http://www.globaltimes.
cn/content/916884.shtml.
23. Jean-Marc F. Blanchard, “Probing China’s Twenty-First-Century Maritime
Silk Road Initiative (MSRI): An Examination of MSRI Narratives,”
Geopolitics 22, no. 2 (2016), 246–268.
24. “Two Chinese Vessels Arrive to Secure Gwadar Port,” The Express Tribune,
January 15, 2017, http://tribune.com.pk/story/1295572/two-chinese-
vessels-arrive-secure-gwadar-port.
25. “Zardari Awards Nishan-e-Imtiaz to Chinese Commander,” Dawn, April
11, 2009, http://www.dawn.com/news/456613/zardari-awards-nishan-
e-imtiaz-to-chinese-commander; and Singh, “Li Keqiang Visit to Pakistan.”
26. Omer Qayyum and Sabahat Afsheen, “Launching Ceremony of Book
“President Xi Jinping—The Governance of China,”” Pakistan-China
Institute, December 27, 2014, http://www.pakistan-china.com/news-
detail.php?id=Mzk0&pageid=news.
27. Muhammad Shahbaz Sharif, “Xi’s Heartwarming Visit Demonstrates Iron
Brotherhood of China and Pakistan,” Global Times, June 1, 2015, http://
www.globaltimes.cn/content/924836.shtml.
28. The CPEC also is addressed in Xinmin Sui’s chapter (Chap. 4) in the spe-
cific context of China’s strategy towards SA as well as the challenges China
faces in bringing the MSRI to fruition.
124 J.T. JACOB
39. Josh Chin and Liyan Qi, “China Makes Multibillion-Dollar Down-
Payment on Silk Road Plans,” The Wall Street Journal, April 21, 2015,
http://blogs.wsj.com/chinarealtime/2015/04/21/china-makes-
multibillion-dollar-down-payment-on-silk-road-plans.
40. “Foundation Stone of China-Pakistan Economic Corridor’s Motorway
Laid,” Xinhua, November 30, 2014, http://news.xinhuanet.com/eng-
lish/china/2014-11/30/c_133822684.htm.
41. Chen Jia, “Silk Road Fund Makes First Investment,” China Daily, April
22, 2015, http://www.chinadaily.com.cn/business/2015-04/22/con-
tent_20501255.htm.
42. Chin and Qi, “China Makes Multibillion-Dollar Down-Payment on Silk
Road Plans.”
43. Wang Ting, “China Gets 40-Year Rights at Pakistani Port,” China Daily,
April 14, 2015, http://www.chinadaily.com.cn/world/2015-04/14/
content_20433493.htm.
44. Chin and Qi, “China Makes Multibillion-Dollar Down-Payment on Silk
Road Plans.”
45. “Backgrounder: China-Pakistan Economic Corridor,” China Daily,
April 22 2015, http://www.chinadaily.com.cn/world/2015xivisitpse/
2015-04/22/content_20503693.htm.
46. Chin and Qi, “China Makes Multibillion-Dollar Down-Payment on
Silk Road Plans”; “Backgrounder: China-Pakistan Economic Corridor”;
and Mian Abrar, “2017—Year of the CPEC Take-Off,” Pakistan Today,
February 19, 2017, http://www.cpecinfo.com/cpec-news-detail?id=
MTI5NQ, date accessed 10 March 2017.
47. Blanchard, “Probing China’s Twenty-First Century Maritime Silk Road
Initiative (MSRI).”
48. Zhao Shengnan, “Corridor to Progress,” China Daily, January 30, 2015,
http://www.chinadaily.com.cn/china/2015-01/30/content_19453160.
htm; and Zhang Dejiang “China, Pakistan Vow Closer Parliamentary
Links,” Xinhua, January 29, 2015, http://news.xinhuanet.com/english/
china/2015-01/29/c_127437741.htm.
49. “China Vows to Back Pakistan’s Anti-Terrorism Efforts,” Xinhua,
January 26, 2015, http://news.xinhuanet.com/english/china/2015-
01/26/c_133948230.htm.
50. “China Pledges Cooperation with Pakistan against Terrorism,” People’s
Daily Online, June 6, 2014, http://en.people.cn/n/2014/0606/
c90883-8737539.html.
51. “巴基斯坦拟设特别安全部队保护中国工人促走廊建设” (Bajisitan ni she
tebie anquan budui baohu zhongguo gongren cu zoulang jianshe) [Pakistan
plans to create Special Security Forces to protect Chinese workers engaged
in construction of the Economic Corridor], Huanqiu Shibao [Global Times],
126 J.T. JACOB
65. “China Picks Pakistan Dam as First Stop on US$40b Silk Road Investment
Plans.” For a Chinese survey of Chinese attitudes towards Pakistan,
see “Online Survey Confirms China-Pakistan Ironclad Friendship,”
Xinhua, April 18, 2015, http://news.xinhuanet.com/english/2015-
04/18/c_134162237.htm. Issues of integrity apart, of those surveyed 89
percent of the Chinese and 90 percent of the Pakistanis described the Sino-
Pak relationship as one between “iron brothers.”
66. Shi and Lu, “The Benefits and Risks of the China-Pakistan Economic
Corridor.”
67. Chin and Qi, “China Makes Multibillion-Dollar Down-Payment on Silk
Road Plans.”
68. “Power China to Build Power Plant outside Karachi,” Global Times,
April 10, 2015, http://en.people.cn/business/n/2015/0410/c90778-
8876505.html.
69. Muhammad Luqman, “CPEC: The Sino-Pak Project All Set to Generate
2.32 Million Jobs in Pakistan,” CPEC Info, February 8, 2017, http://
www.cpecinfo.com/cpec-news-detail?id=MTE4NA.
70. Faseeh Mangi, “Banker Fears Flow of Chinese Goods on Silk Road in
Pakistan,” Bloomberg, January 20, 2017, https://www.bloomberg.com/
news/articles/2017-01-19/banker-fears-influx-of-chinese-goods-on-silk-
road-in-pakistan.
71. Siddique, “Chinese Investments Divide Pakistani Provinces”; and Zaman,
“China-Pakistan Economic Corridor.”
72. “China Picks Pakistan Dam as First Stop on US$40b Silk Road Investment
Plans.”
73. On cost issues, see Khurram Husain, “IMF Warns of Looming CPEC Bill,”
Dawn, October 17, 2016, https://www.dawn.com/news/1290523;
Khurram Husain, “Pakistan’s Road to China,” Dawn, November 26,
2016, http://www.asianews.network/content/asian-editors-circle-pak-
istans-road-china-29495; and Maha Qasim, “How Chinese Money Will
Transform Pakistan,” China Dialogue, October 13, 2016, https://www.
chinadialogue.net/article/show/single/en/9307-How-Chinese-money-
will-transform-Pakistan?mc_cid=6188ba8005&mc_eid=1a1f63d25d.
On transparency issues, see “Pakistan Should Be More Transparent on
$46 Billion China Deal: SBP,” The Express Tribune, December 4, 2015,
https://tribune.com.pk/stor y/1004177/cpec-needs-to-be-more-
transparent-sbp; Abrar, “2017—Year of the CPEC Take-Off”; and Saad
Ahmed Dogar, “Four Reasons Why CPEC Will Not Be Another East India
Company,” The Express Tribune, January 3, 2017, http://tribune.com.pk/
story/1282887/four-reasons-cpec-will-not-another-east-india-company.
128 J.T. JACOB
74. Zia Banday, “Chinese Are Not in Pakistan for Charity,” The Express Tribune,
May 9, 2016, https://tribune.com.pk/story/1099554/wooing-investors-
chinese-are-not-here-for-charity. See also Farooq Tirmizi and Syeda
Masooma, “Pakistan’s Next Economic Crisis,” Profit, Pakistan Today,
February 20, 2017, http://profit.pakistantoday.com.pk/2017/02/20/
pakistans-next-economic-crisis.
75. “习近平4月访问巴基斯坦 启动瓜达尔港’, (Xi Jinping 4 yue fangwen
Bajisitan qidong Guadaer gang) [President Xi to visit Pakistan in April, will
inaugurate the Gwadar Port], DWNews, April 7, 2015, http://global.
dwnews.com/news/2015-04-06/59645576.html.
76. Chen, “Pakistani Ambassador Welcomes China’s Help in Developing
Agriculture.”
77. Hyder, “Xi’s Visit Cements Sino-Pakistani Cooperation.”
78. For Pakistani views on CPEC connecting China with Afghanistan, West
Asia, and Central Asia, see “Pakistan Hails CPEC as Fate Changer, Vital in
Driving Economic Growth,” Xinhua, June 5, 2015, http://news.xinhua-
net.com/english/2015-06/05/c_134299244.htm. The quotation comes
from “China Voice: Old Friends, New Cooperation,” Xinhua, June 4,
2015, http://news.xinhuanet.com/english/2015-06/04/c_134297754.
htm.
79. Rooh-ul-Amin, “China’s role as Peacemaker Welcomed in AfPak Region,”
Global Times, May 8, 2015, http://www.globaltimes.cn/content/920663.
shtml; and “China Voice: Old Friends, New Cooperation.”
80. Masood, “Pakistan’s Unique Relations with China.”
81. Jia Xiudong, “Sino-Pakistani Ties to Get Closer,” People’s Daily Online
(trans.), February 11, 2015, http://en.people.cn/n/2015/0211/c98649-
8849317.html.
82. Charu Sudan Kasturi, “India Wrinkle on China Silk: Jaishankar Speaks Out
on Absence of Consultations,” The Telegraph, July 21, 2015, http://www.
telegraphindia.com/1150721/jsp/frontpage/story_32798.jsp.
83. See Government of India, Ministry of External Affairs, “Speech by Foreign
Secretary at Raisina Dialogue in New Delhi,” March 2, 2016, http://
mea.gov.in/Speeches-Statements.htm?dtl/26433/Speech_by_Foreign_
Secretary_at_Raisina_Dialogue_in_New_Delhi_March_2_2015.
84. See also Chap. 6, by David J. Karl, on Sri Lanka and Chap. 7, by Srikanth
Kondapalli, on Maldives.
85. “India Should ‘Shun Enmity’ and Join CPEC: Pakistani General,” The Indian
Express, December 21, 2016, http://indianexpress.com/article/india/
india-should-shun-enmity-and-join-cpec-pakistani-general-4438849.
86. For instance, see Wang, “China Gets 40-Year Rights at Pakistani Port.”
87. “China Strives for SCO Development, FMs Urge Bigger UN Role,”
Xinhua, August 1, 2014, http://news.xinhuanet.com/english/china/
2014-08/01/c_133524872.htm.
THE CHINA–PAKISTAN ECONOMIC CORRIDOR... 129
88. Ibid.
89. “Chinese, Indian Senior Defense Officials Call for Cooperation in Fighting
Terrorism,” Xinhua, November 17, 2015, http://news.xinhuanet.com/
english/2015-11/17/c_134822847.htm
90. “China, Pakistan Will Always Stand Together, Move Forward Together:
Xi,” Xinhua, April 21, 2015, http://news.xinhuanet.com/english/2015-
04/21/c_134171244.htm
91. “Pakistan, China Vow to Expedite Work on Economic Corridor,” Xinhua,
February 14, 2015, http://news.xinhuanet.com/english/china/2015-
02/14/c_127494926.htm
92. “Sino-Pakistan Ties Set Win-Win Example,” Global Times, April 19, 2015,
http://www.globaltimes.cn/content/917624.shtml.
93. However, see also “外媒:中巴关系”铁上加铁”令美印侧目,” (Wai mei:
Zhong-Ba guanxi “tie shang jia tie” ling Mei-Yin cemu) [Foreign media:
China-Pakistan “cast-iron” relationship raises American and Indian eye-
brows], Cankao Xiaoxi [Reference News], April 24, 2015, http://col-
umn.cankaoxiaoxi.com/2015/0424/755146.shtml; and “美媒吃醋中国
巴基斯坦铁杆关系称美战略极失败” (Mei chicu Zhongguo Bajisitan tiegan
guanxi cheng mei zhanlüe ji shibai) [American media envies China and
Pakistan for their “iron friendship,” calls US strategy a failure], Huanqiu
Shibao [Global Times], April 21, 2015, http://mil.huanqiu.com/obser-
vation/2015-04/6243259.html.
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Zia, Banday. “Chinese are not in Pakistan for charity.” The Express Tribune, May
9, 2016. https://tribune.com.pk/story/1099554/wooing-investors-chinese-
are-not-here-for-charity/.
CHAPTER 6
David J. Karl
Developments in the island nation of Sri Lanka will have a major bearing
on India’s calculus regarding China’s “Maritime Silk Road” (MSR) initia-
tive (MSRI) – and by extension, New Delhi’s overall approach to Beijing
in the years ahead. With a population of some 22 million people, the
country is tiny compared to Asia’s two titan-size states. Yet it has dispro-
portionate strategic importance. Lying just off the southeast coast of the
Indian subcontinent, the island sits on India’s doorstep, separated by a
stretch of water (the Palk Strait) which is shallow and narrow enough
(53 km wide at its thinnest) that there is recurring talk of infrastructure
projects to physically link Sri Lanka and India.1 Such geographic propin-
quity means both states have deep, millennia-long historical and cultural
affinities with each other. The island features prominently in the Ramayana,
the ancient Sanskrit epic that is a central part of Hindu literature. The pres-
ence in Sri Lanka’s northern and eastern areas of a significant Tamil minor-
ity, who have close ties with ethnic kin lying just across a slim maritime
border, has serious ramifications for domestic politics in both countries as
well as for bilateral relations.2 Finally, Beijing’s increasing commercial and
military dealings with Colombo engage not only New Delhi’s traditional
The key issue is whether we will build our connectivity through consultative
processes or more unilateral decisions. Our preference is for the former …
But we cannot be impervious to the reality that others may see connectivity
as an exercise in hard-wiring that influences choices. This should be discour-
aged, because particularly in the absence of an agreed security architecture
SRI LANKA, THE MARITIME SILK ROAD, AND SINO-INDIAN RELATIONS 139
In some ways, the stage is thus set for Sri Lanka to become an arena of
maritime competition and geopolitical rivalry as both China and India
increase their national power and strategic reach.9 This is all the more so
since Colombo is looking to continue tapping Beijing as a major source
of foreign investment and infrastructure development – functions at
which New Delhi is notoriously deficient. Yet it is also possible to imag-
ine a different, more sanguine, future in light of India’s growing focus
on building up the maritime elements of its national economy and
engaging in the potentially vast commercial opportunities proffered by
its northern neighbor.
Indeed, the contours of these alternative scenarios were visible during
President Xi’s visit to India in September 2014 when he met with newly
elected Prime Minister Narendra Modi. The Indian leader had made his
political reputation as the business-friendly chief minister of his home state
of Gujarat and actively sought out Chinese investment there. On one of a
number of trips he made as chief minister to China, he proclaimed that the
two countries “will make Asia the center-stage of the global economy.”10
At the time of Modi’s elevation to the prime ministership, the bulk of
Chinese investments in India were in Gujarat and analysts in China saw
him as “ready to do business” with Beijing.11
Modi no doubt saw Xi’s visit as an opportunity to strike a deal that
would channel China’s vast foreign currency reserves toward his country’s
massive infrastructure needs and enlist Chinese companies in his own sig-
nature Make in India program, which seeks to transform the country into
a global manufacturing powerhouse. Earlier in the year, the Chinese gov-
ernment communicated its willingness to fund a large part of India’s infra-
structure requirements, including in such key sectors as transportation,
telecommunications, and power generation.12 In the run-up to the sum-
mit, Modi’s national security advisor proclaimed that bilateral relations
were on the verge of an “orbital jump” and one media analysis noted that
the Modi government was preparing to “overcome the reflexive suspicion
of its giant neighbor and open the floodgates to Chinese capital.”13 The
Indian leader made a special effort to woo his Chinese counterpart by
140 D.J. KARL
hosting him in Gujarat. The outing featured the two leaders seated
together on a swing in a riverfront park and an elaborate dinner in celebra-
tion of Modi’s birthday, all symbolism evoking the long-ago days of Hindi
Chini Bhai (“India-China brotherhood”). Indeed, Xi revealed during the
visit that Modi had told him during the BRICS (Brazil, Russia, India,
China, and South Africa) summit in Brazil two months earlier that both
countries were like “two bodies, one spirit.”14
Yet alongside the summit bonhomie were open signs of the ulcerating
strains in India–China relations. The day before Xi’s arrival in India, media
accounts reported that Modi’s government was about to launch its own
maritime initiative designed to counter Beijing’s growing heft in the
Indian Ocean region.15 And the summit itself was upended by a major
standoff between Indian and Chinese military forces along their disputed
Himalayan border that began just prior to Xi’s arrival. The episode, which
reportedly involved more than 1000 troops on each side, was the most
serious border confrontation in nearly three decades.16 Many in the Indian
security establishment interpreted the incident as a deliberate provocation
by Xi, intended to test the mettle of Modi, who at the time had been in
office for less than three months. This impression was strengthened by the
fact that, less than a year earlier, the two countries had signed an agree-
ment to stabilize the border dispute.17
Reinforcing this dim view of Chinese strategic intentions was the berth-
ing, just days before Xi showed up in India, of a Chinese diesel-powered
attack submarine at a container facility in Colombo that was constructed
and managed by a Chinese state-owned company.18 The episode was
unusual on a number of counts: the submarine did not dock in the port
area commonly allotted to foreign military vessels; it was the first time a
Chinese submarine had docked in any Indian Ocean port; and it seemingly
violated a long-standing understanding between New Delhi and Colombo
that Sri Lankan territory was not to be used by foreign militaries in ways
unconducive to Indian equities. Sri Lanka’s initial attempts at secrecy,
combined with China’s unconvincing explanation that the submarine was
on its way to join antipiracy patrols in the Gulf of Aden, aroused concerns
that Colombo was ending its traditional deference to New Delhi’s security
imperatives.19 The episode was so disquieting from New Delhi’s perspec-
tive that a senior Indian diplomat subsequently characterized it as “the last
straw.”20 If this was not enough, another Chinese submarine – this one
nuclear-powered – turned up in Colombo six weeks later even after the
Modi government had raised protests about the first visit with Sri Lankan
SRI LANKA, THE MARITIME SILK ROAD, AND SINO-INDIAN RELATIONS 141
… the Chinese presence in Sri Lanka has increased so much so that there is
no major infrastructure project in which the Chinese have not invested. It is
estimated that China was Sri Lanka’s biggest source of foreign funding in
2009, providing $ 1.2 billion, or nearly triple the $424 million given by the
number two overseas lender, the Asian Development Bank.29
SRI LANKA, THE MARITIME SILK ROAD, AND SINO-INDIAN RELATIONS 143
In the end, Rajapaksa’s close dealings with the Chinese proved costly. The
infrastructure projects in Hambantota have so far failed to provide much
return on investment, and repayment of the loans taken out from Beijing
has badly strained the Sri Lankan treasury.30 The construction spree also
generated concerns within the country about corruption and environmen-
tal degradation that played a role in Rajapaksa’s startling defeat in the
country’s January 2015 presidential elections. Rajapaksa’s embrace of
Beijing also had negative foreign-policy consequences. China’s heavy
involvement in the port projects – coming just as the Chinese navy began
making regular transits through the Indian Ocean in support of counter-
piracy operations in the Gulf of Aden – fed easily into the “String of Pearls”
narrative that has wide currency both in the Indian media and strategic
communities. This perspective posits that China is aiming to complete the
strategic encirclement of India by building a network of civilian port facili-
ties that could be utilized for the projection of naval power into the Indian
Ocean.31 Over the past decade or so, China has been quite active in con-
structing significant maritime infrastructure around the region’s periph-
ery – not just in Sri Lanka, but also Pakistan, Bangladesh, Myanmar, the
Maldives, Seychelles, and the Horn of Africa. Although there is a debate
over whether this intense activity has an explicit military dimension, these
port facilities could be used to support a more sustained Chinese naval
presence, particularly extended patrols of nuclear-powered attack subma-
rines, thereby undermining Indian national security and eroding New
Delhi’s traditional ascendancy in the region.32
China now has one of the world’s largest attack-submarine fleets and its
deployment in South Asian waters would give Beijing the capacity to men-
ace Indian overseas commerce, strike at targets ashore using land-attack
cruise missiles, and threaten the Indian navy’s emerging submarine-based
nuclear deterrent force.33 This fear is all the more acute since Indian capa-
bilities in terms of undersea warfare and anti-submarine operations are
quite deficient.34 In early 2013, an Indian defense ministry report surfaced
in the media warning that Chinese nuclear-powered submarines were
making frequent forays into the Indian Ocean. It cautioned that Beijing
was building up “expeditionary maritime capabilities” and that the deploy-
ments were aimed at undermining the Indian navy’s capacity “to control
highly-sensitive sea lines of communications.” It also foresaw the emer-
gence of an intense Sino-Indian naval rivalry.35 In late 2013, Beijing
alerted New Delhi that it was dispatching a nuclear-powered attack sub-
marine into the Indian Ocean for a two-month patrol, the first time China
144 D.J. KARL
The two sides will use the development of a 21st Century Maritime Silk
Road as an opportunity to further advance infrastructure development, the
China-Sri Lanka [free trade agreement] negotiations, promote joint ven-
tures and expand cooperation in the areas of economy, culture, science and
technology and people to people contacts.48
administration, and financial resources means that Beijing has been able to
economically knit together the region in a way that New Delhi has failed
to do. India has a notoriously poor implementation record when it comes
to connectivity projects within the country and along its periphery.53 New
Delhi has been involved in a number of infrastructure projects in Sri
Lanka, though none as ambitious as what the Chinese accomplished and
in any case Indian performance has not been particularly impressive.54 A
prominent Indian commentator laments that “Delhi does not have the
capacity or a policy framework to bid for and execute major infrastructure
projects in the Indian Ocean littoral,” while a major newspaper notes that
Indian infrastructure projects “have been delayed by tardy Sri Lanka gov-
ernment clearances, but a bulk of the blame for the lack of progress must
lie with Indian inefficiency. India cannot cavil at Chinese investment in the
island unless it is able to finish its own projects.”55 Moreover, Indian proj-
ects have focused on improving Sri Lanka’s Tamil-populated northern
areas rather than directly advancing the country’s maritime infrastructure
goals, since these would have the effect of taking commercial traffic away
from India’s own ports.56
Beijing’s relative advantage extends to an overall preponderance of eco-
nomic resources.57 As an Indian commentator observes, the Sirisena gov-
ernment “will find it hard to completely walk away from the Chinese for a
variety of reasons. The fact that India is not yet in a position to match
Chinese economic investments in Sri Lanka is a big factor.”58 A Western
expert on the region concurs, noting: “There has been an underestima-
tion of the power of Chinese money, the simple and pure power, and how
much of it they are willing to throw around the region,” while another
analyst simply notes that “The Chinese are the only game in town.”59
Although the new leadership in Colombo has broadcast its openness to
additional Indian investment, New Delhi, unlike Beijing, has yet to submit
proposals regarding Sri Lanka’s newly formed special economic zones.60
A Cooperative Future?
If New Delhi is in danger of being outcompeted in Sri Lanka, might it
choose to join forces with Beijing to work collaboratively on such issues as
regional economic partnership and infrastructure connectivity? More spe-
cifically, how likely is it that Indian leaders will assume a more forthcoming
posture toward the MSRI, both on projects within India and those around
its periphery? This scenario, which is a dramatic counterpoint to the
SRI LANKA, THE MARITIME SILK ROAD, AND SINO-INDIAN RELATIONS 147
“String of Pearls” narrative, is not implausible. New Delhi, after all, has
worked with Beijing to establish the Asian Infrastructure Investment Bank
(AIIB), in which it is the second largest shareholder, as well as the New
Development Bank (NDB).61 In contrast to previous Indian administra-
tions, the Modi government has warmed up to the idea of the Bangladesh–
China–India–Myanmar (BCIM) transportation corridor, which would
link the West Bengal capital of Kolkata to Kunming in China’s Yunnan
province, via Dhaka and Chittagong in Bangladesh and Mandalay in
Myanmar.62 While Modi has not shied away from the antagonistic ele-
ments of the Sino-Indian relationship, he has also given some prominence
to the cooperative impulses of growing economic engagement. As one
observer notes, Modi’s approach toward Beijing is one of “pragmatic
engagement,” in which the Indian leader “plays geopolitical hardball with
China [but also] woos Chinese investment with unprecedented vigor.”63
In the past, national security suspicions have worked to dampen Sino-
Indian commercial interaction, with New Delhi being wary of joining
with China in regional infrastructure projects or allowing Chinese partici-
pation in critical sectors of the domestic economy. Yet this is beginning to
change as China has emerged as India’s largest merchandise trade partner
and as New Delhi becomes more receptive toward Beijing’s deeper
involvement in the Indian economy, especially in infrastructure and indus-
trial development. One well-informed Indian analyst notes how Modi is
determined to forge a new bilateral relationship, in part by expanding
commercial linkages:
Modi has recognized that India can’t construct a serious business relation-
ship with China—the world’s second largest economy and a major exporter
of capital—by giving the security establishment a veto over economic policy.
Whether it is granting business visas or attracting Chinese investments, secu-
rity fears in Delhi, borne out of the limited border war that the two sides
fought in 1962, have often trumped economic common sense.64
The Modi government has been active in knocking down the security bar-
riers that in the past blocked significant Chinese involvement in critical
economic sectors.65 Indeed, according to one media report, the prime
minister’s office has explicitly told the security bureaucracy that “stringent
security clearance rules are contrary to Modi’s Make in India campaign.”66
Modi also overruled objectives from Indian security authorities to ease
rules for the granting of electronic tourist visas to Chinese nationals.67
148 D.J. KARL
which hosts one of the world’s largest natural harbors and served as the
main base for the British navy’s eastern fleet during World War II. Modi
also announced the creation of a joint task force on the ocean economy,
declaring that “The ocean economy is a new frontier that holds enormous
promise for both of us. It is a priority for our two countries.”85
Yet even while Modi was busy reasserting India’s profile in the Indian
Ocean area, he also signaled a willingness to work with external powers in
enhancing regional security and economic cooperation. One analyst
reports:
Looking Ahead
Sino-Indian relations are headed into a new era, one in which both coun-
tries are seeking to expand their security reach and economic power via
regional connectivity projects around the Indian Ocean littoral. The poten-
tial for further competition is strong if each side pursues plans without
regard for the other. As Chinese naval deployments become more frequent
in the region, the construction of maritime infrastructure promised under
the MSR banner will inevitably intensify New Delhi’s “String of Pearls”
fears and sharpen the security dilemma between the countries.88 The
expansion of China’s maritime presence as a result of the Gwadar port
project in Pakistan and the establishment of a naval outpost in Djibouti on
the Horn of Africa—Beijing’s first military base in the Indian Ocean litto-
ral – is already having this effect.89 Renewed activity in Sri Lanka, such as
the expansion of Chinese commercial operations at the ports in Colombo
and Hambantota, will likewise have the same outcome. As a former Indian
foreign secretary recently exclaimed, “China’s strategic encirclement of
India is evident in its Indian Ocean strategy, in which Sri Lanka is a pivot.”90
SRI LANKA, THE MARITIME SILK ROAD, AND SINO-INDIAN RELATIONS 151
Notes
1. a For recent proposals, see N. Sathiya Moorthy, “A Bridge across the Palk
Strait,” Hindu Business Line, January 27, 2015; C. Raja Mohan, “A Bridge
to Sri Lanka,” Indian Express, September 15, 2015; “India to Build Sea
Bridge, Tunnel to Connect Sri Lanka at a Cost of Rs 24,000 crore: Nitin
Gadkari,” Economic Times, December 17, 2015; and P.K. Balachandran,
“Sri Lanka Scuttles Plan for Bridge Over Palk Strait,” New Indian Express,
December 19, 2015.
152 D.J. KARL
24. See Dharisha Bastian and Gardiner Harris, “Chinese Leader Visits Sri
Lanka, Challenging India’s Sway,” New York Times, September 17, 2014;
Anusha Ondaatjie, “China Maritime Silk Road Is Sri Lanka’s Boon as Xi
Visits,” Bloomberg, September 16, 2014; and James Crabtree, “Sri Lanka
Sees Benefits of China’s ‘Maritime Silk Road Plan,” Financial Times,
September 17, 2014.
25. Quotation in Daniel, “As Obama Visits, Signs that India Is Pushing Back
against China.”
26. For overviews of the expansion of Chinese clout during the Rajapaksa
period, see Gunjan Singh, “Growing Chinese Influence in Sri Lanka”
(New Delhi: Institute for Defense Studies and Analyses, June 8, 2009);
and Nilanthi Samaranayake, “Are Sri Lanka’s Relations with China
Deepening? An Analysis of Economic, Military, and Diplomatic Data,”
Asian Security 7, no. 2 (2011), 119–146.
27. For a report that India was accelerating military training programs and the
supply of defensive weapons for Colombo in order “to counter China’s
ever-growing strategic inroads into Sri Lanka,” see Rajat Pandit, “India to
Train Lankan Soldiers,” Times of India, July 1, 2008.
28. Quotations in Sandra Destradi, Indian Foreign and Security Policy in South
Asia: Regional Power Strategies (London and New York: Routledge,
2012), 79; and “Won’t Stop Military Cooperation with Lanka: Pranab,”
Indian Express, October 24, 2008.
29. Harsh V. Pant, “The New Battle for Sri Lanka,” ISN Security Watch,
June 17, 2010, http://www.isn.ethz.ch/Digital-Library/Articles/
Detail/?lang=en&id=117624; and R.N. Das, “China’s Foray into Sri
Lanka and India’s Response.” New Delhi: Institute for Defence Studies
and Analyses, August 5, 2010.
30. See Wade Shepard, “Sri Lanka and China’s Hambantota Debacle May Now
Be ‘Too Big to Fail,’” Forbes, August 4, 2016, https://www.forbes.com/
sites/wadeshepard/2016/08/04/sri-lanka-and-chinas-hambantota-
debacle-is-too-big-to-fail; Wade Shepard, “The Story Behind the World’s
Emptiest International Airport,” Forbes, May 28, 2016, https://www.
forbes.com/sites/wadeshepard/2016/05/28/the-story-behind-the-
worlds-emptiest-international-airport-sri-lankas-mattala-rajapaksa; and
Jeff M. Smith, “China’s Investments in Sri Lanka,” Foreign Affairs,
May 23, 2016, https://www.foreignaffairs.com/articles/china/2016-
05-23/chinas-investments-sri-lanka; Sammer Lalwani, “China’s Port to
Nowhere,” Foreign Affairs, April 8, 2015, https://www.foreignaffairs.
com/articles/china/2015-04-08/chinas-port-nowhere. According to one
report, the Hambantota airport is so commercially unviable government
officials were once considering converting it into a rice storage facility.
See Annie Gowen, “Can Sri Lanka’s new Government Break Free from
China?” Washington Post, August 16, 2015.
SRI LANKA, THE MARITIME SILK ROAD, AND SINO-INDIAN RELATIONS 155
31. For useful background, refer to James R. Holmes and Toshi Yoshihara,
“China’s Naval Ambitions in the Indian Ocean,” Journal of Strategic
Studies 31, no. 3 (2008): 367–394; Daniel J. Kostecka, “Places and Bases:
The Chinese Navy’s Emerging Support Network in the Indian Ocean,”
Naval War College Review 64, no. 1 (Winter 2011): 59–78; C. Raja
Mohan, Samudra Manthan: Sino-Indian Rivalry in the Indo-Pacific
(Washington, DC: Carnegie Endowment for International Peace, 2012),
esp. Chapter 7; Jonathan Holslag, “The Reluctant Pretender: China’s
Evolving Presence in the Indian Ocean,” Journal of the Indian Ocean
Region 9, no. 1 (2013), 42–52; and Saji Abraham, China’s Role in the
Indian Ocean: Its Implications on India’s National Security (Delhi: Vij
Books India, 2015).
32. On the debate over the strategic consequences of China’s maritime and
naval activity in the region, consult Christopher D. Yung et al., “Not an
Idea We Have to Shun”: Chinese Overseas Basing Requirements in the
Twenty- First Century” (Washington, DC: National University Press,
October 2014); David Brewster, “An Indian Ocean Dilemma: Sino-Indian
Rivalry and China’s Strategic Vulnerability in the Indian Ocean,” Journal
of the Indian Ocean 11, no. 1 (2015): 48–59; and Morgan Clemens, “The
Maritime Silk Road and the PLA,” manuscript, July 2015.
33. For an argument that forward deployments of Chinese nuclear subma-
rines would breach a “redline” set by New Delhi vis-à-vis Chinese naval
activities in the Indian Ocean, see James R. Holmes and Toshi Yoshihara,
“Redlines for Sino-Indian Naval Rivalry,” in Deep Currents and Rising
Tides: The Indian Ocean and International Security, edited by John
Garofano and Andrea J. Dew (Washington, DC: Georgetown University
Press, 2013), 185–209. On a discussion in Chinese defense-policy cir-
cles about using submarines to blockade the Indian coast, see Zachary
Keck, “Can China’s Nuclear Submarines Blockade India?” National
Interest blog, June 5, 2015, http://nationalinterest.org/blog/the-buzz/
can-chinas-nuclear-submarines-blockade-india-13053.
34. Consult, inter alia, Rajat Pandit, “India’s Submarine Fleet Sinking: CAG,”
Times of India, October 25, 2008; “CAG Report Pulls Up Navy on
Submarine Maintenance, IAF On Procurement Shortcomings,” Indian
Express, July 19, 2014; and “How India Lags Behind China in Submarine
Race,” Times of India, July 20, 2015.
35. “China’s ‘String of Pearls’ Is Closer Than You Think, Red Intrusion in
Indian Waters Sends Jitters,” India Today, April 5, 2013, http://indiato-
day.intoday.in/story/chinese-nulcear-submarines-in-indian-ocean-send-
alarm-bells-ringing/1/260806.html; Rahul Singh, “China’s Submarines
in Indian Ocean Worry Indian Navy,” Hindustan Times, April 7, 2013;
and “China Flexes Muscle in Indian Ocean, Navy Concerned,” Times of
India, May 13, 2013.
156 D.J. KARL
36. Sandeep Unnithan, “Indian Navy Headless as Chinese Nuclear Sub Prowls
Indian Ocean,” India Today, March 21, 2014, http://indiatoday.intoday.
in/story/indian-navy-chinese-nuclear-sub-indian-ocean/1/350498.html.
37. “Chinese Submarine Lurked Past Indian Waters, Docked in Karachi,”
India Today, June 27, 2015, http://indiatoday.intoday.in/story/chinese-
submarine-indian-navy-karachi-indian-ocean-pm-modi/1/447505.html.
38. Vishnu Som, “Navy Alert to Chinese Nuclear Submarine Threat in Indian
Ocean,” NDTV, June 2, 2015, http://www.ndtv.com/india-news/navy-
alert-to-chinese-nuclear-submarine-threat-in-indian-ocean-767781. Also
consult Manu Pubby, “As Sightings of Chinese Submarines Become
Frequent, Navy Steps Up Guard in Indian Ocean Region,” Economic
Times, August 8, 2015.
39. T. Ramakrishnan, “Sri Lanka is Neither Pro-India Nor Pro-China: Ranil,”
The Hindu, April 8, 2016.
40. According to one analyst, Rajapaksa’s defeat showed how Prime Minister
Modi’s government “was able to snatch back this pearl from Beijing’s
string.” Kadira Pethiyagoda, India v. China in Sri Lanka–Lessons for Rising
Powers (Washington, DC: Brookings Institution, May 1, 2015). Also con-
sult Heather Timmons, “Sri Lanka’s Election Upset Just Destroyed a
Linchpin of China’s Foreign Policy,” Quartz India, January 8, 2015,
http://qz.com/323718/how-sri-lankas-surprising-election-results-
could-destroy-a-lynchpin-of-chinas-foreign-policy/; Ellen Barry, “New
President in Sri Lanka Puts China’s Plans in Check,” New York Times,
January 9, 2015; and “Wooing Sri Lanka From China’s Embrace,”
Bloomberg View, January 11, 2015, http://www.bloombergview.com/
articles/2015-01-11/sri-lankas-new-president-offers-a-fresh-start.
41. As Sri Lanka’s new deputy foreign minister recently stated, “If we manage
our policies right, we will become the next or even better Singapore or
Dubai.” Quoted in Gauri Bhatia, “China, India Tussle for Influence as Sri
Lanka Develops,” CNBC.com, April 24, 2016, http://www.cnbc.
com/2016/04/24/global-opportunities-china-india-tussle-for-influ-
ence-as-sri-lanka-develops.html. Similarly, the country’s prime minister
wants to turn the port of Hambantota into a new Shenzhen. Atul Aneja,
“China, Sri Lanka to Redefine Colombo Port City Project,” The Hindu,
April 9, 2016.
42. Ananth Krishnan, “Sri Lanka Says Will Not Allow Repeat of Chinese
Submarine Visits,” India Today, February 28, 2015, http://indiatoday.
intoday.in/story/sri-lanka-says-will-not-allow-repeat-of-chinese-subma-
rine-visits/1/421571.html; and Ravi Velloor, “Sri Lanka to Allow Chinese
Submarines to Visit, Says PM Wickremsinghe,” Straits Times, October 19,
2015.
SRI LANKA, THE MARITIME SILK ROAD, AND SINO-INDIAN RELATIONS 157
43. Quotation in Barry, “New President in Sri Lanka Puts China’s Plans in
Check.” Also consult Meera Srinivasan, “Colombo Opposition Takes
Anti-China Stand,” The Hindu, December 21, 2014.
44. Debasish Roy Chowdhury, “Sri Lanka Looks to China to Buoy Sinking
Port,” South China Morning Post, October 11, 2015. Also see Daniel Ten
Kate and Anusha Ondaatjie, “China’s Cash Proves Too Irresistible for Sri
Lanka to Ignore,” Bloomberg, August 18, 2015; and Debasish Roy
Chowdhury, “Let Bygones Be Bygones, Colombo Urges Beijing, as
Chinese Loans Take Their Toll,” South China Morning Post, October 18,
2015.
45. Wade Shepard, “Sri Lanka’s Hambantota Port and the World’s Emptiest
Airport Go to the Chinese,” Forbes, October 28, 2016, https://www.forbes.
com/sites/wadeshepard/2016/10/28/sold-sri-lankas-hambantota-port-
and-the-worlds-emptiest-airport-go-to-the-chinese. Also consult B. Channa
Kumara, “Sri Lanka Launches China-Led Investment Zone amid Protests,”
Reuters, January 7, 2017; and “China Plans to Invest $5 bn in Southern Sri
Lanka Economic Zone,” Business Standard, January 8, 2017.
46. Atul Aneja, “China, Sri Lanka Eye New Infra Road Map to Anchor Ties,”
The Hindu, April 9, 2016.
47. Aneja, “Expectations High from Ranil’s China Visit,” The Hindu, April 8,
2016; Aneja, “China, Sri Lanka to Redefine Colombo Port City Project;”
and Munza Mushtaq, “China Invites India to Join Sri Lanka Offshore City
Project,” Asia Times, October 10, 2016.
48. Aneja, “China, Sri Lanka to Redefine Colombo Port City Project;” and
“Sri Lanka Approves Chinese Port Project,” Reuters, January 12, 2016.
Also see “Sri Lanka Deepening Trade Agreements, Exploring China
FTA: Malik,” Lanka Business Online, January 29, 2016, http://www.
lankabusinessonline.com/sri-lanka-deepening-trade-agreements-explor-
ing-china-fta-malik/; and Ben Blanchard, “Sri Lanka Eyes China Free-
Trade Deal This Year, PM to Visit in May,” Reuters, February 4, 2017.
49. Sachin Parashar, “Debt-Ridden Sri Lanka Snuggles Up to China Again at
India’s Expense,” Times of India, May 1, 2016.
50. Quotations in Shihar Aneez, “Short of Options, Sri Lanka Turns Back to
Beijing’s Embrace,” Reuters, February 11, 2016; and Bhatia, “China,
India Tussle for Influence as Sri Lanka Develops.”
51. “Maldives Prefers Chinese Proposals As They Are More Attractive:
Gayoom,” Business Standard, March 9, 2016.
52. Jonah Blank: “India’s Engagement with Myanmar: Regional Security
Implications of Acting East Slowly,” in Heading East: Security, Trade and
Environment between India and Southeast Asia, edited by Karen Stoll Farrell
and Sumit Ganguly (New Delhi: Oxford University Press, 2016), 83.
158 D.J. KARL
53. Bureaucratic lassitude in New Delhi, for example, is a major reason why
development of the Chabahar port complex on Iran’s Makran coast—a
project India emphasizes is critical to its Central Asian ambitions—has been
stalled for years. For more, refer to Gohar Motevalian and Iain Marlow,
“India Slow to Expand Iran Port as China Races Ahead at Rival Hub,”
Bloomberg, October 4, 2016; Amitav Ranjan, “Speed Up Assistance Or
Lose Chabahar, Hints Iran,” Indian Express, January 27, 2016; Kabir
Taneja, “India’s Missed Iran Opportunity,” The Diplomat, May 21, 2015,
http://thediplomat.com/2015/05/indias-missed-iran-opportunity/; and
M. Ramesh, “The Price of Inaction,” Hindu Business Line, July 24, 2014.
54. Shashi Tharoor, Pax Indica: India and the World of the Twenty-First
Century (New Delhi: Allen Lane, 2012), 106. A similar argument is con-
tained in N. Sathiya Moorthy, “Sri Lanka: ‘Re-Defining’ or reiterating
China-India equations,” South Asia Weekly IX, no. 15 (April 11, 2016).
55. Quotations in C. Raja Mohan, “Modi’s Sagar Mala,” Indian Express,
March 11, 2015; and “Modi’s Visit to Sri Lanka,” The Hindu, March
16, 2015. Also refer to Sharmadha Srinivasan, “Assessing India’s
Infrastructure Aid Diplomacy,” (Mumbai: Gateway House–Indian Council
on Global Relations, March 19, 2015); and M.K. Bhadrakumar, “China’s
Regional Strategy Outshines India’s,” Rediff, May 31, 2013, http://
blogs.rediff.com/mkbhadrakumar/2013/05/31/chinas-regional-
strategy-outshines-indias/.
56. Nilanthi Samaranayake, “India’s Key to Sri Lanka: Maritime Infrastructure
Development,” The Diplomat, March 31, 2015, http://thediplomat.
com/2015/03/indias-key-to-sri-lanka-maritime-infrastructure-develop-
ment. Also see Nidhi Verma and Krishna N. Das, “With Eye on China, India
Doubles Down on Container Hub Ports,” Reuters, July 28, 2016.
57. On Beijing’s emergence as the world’s largest overseas investor, see David
Dollar, China as a Global Investor (Washington, DC: Brookings Institution,
May 2016); and James Kynge, “China Becomes Global Leader in
Development Finance,” Financial Times, May 17, 2016.
58. Rajeswari Pillai Rajagopalan, “India-Sri Lanka Relations under Modi,” in
Neighbourhood First: Navigating Ties under Modi, edited by Aryaman
Bhatnagar and Ritika Passi (New Delhi: Observer Research Foundation,
2016), 131.
59. Quotations in Barry, “New President in Sri Lanka Puts China’s Plans in
Check” and Jessica Meyers, “Sri Lankans Who Once Embraced Chinese
Investment Are Now Wary of Chinese Domination,” Los Angeles Times,
February 25, 2017.
60. Aneez, “Short of Options, Sri Lanka Turns Back to Beijing’s Embrace.”
61. “India Elected to Board of Directors of AIIB,” Business Standard, January
18, 2016; and Ananth Krishnan, “India Commits $8 billion to China-led
SRI LANKA, THE MARITIME SILK ROAD, AND SINO-INDIAN RELATIONS 159
India’s Major Geopolitical Challenge,” The Wire, May 11, 2015, http://
thewire.in/2015/05/11/the-rise-of-china-as-indias-major-geopolitical-
challenge-1467.
72. Quotation of Shyam Saran in Charu Sudan Kasturi, “Call to Embrace
China Projects–Don’t Veto Connectivity Plans: Experts,” The Telegraph,
May 14, 2015.
73. Samir Saran and Ritika Passi, “Seizing the ‘One Belt, One Road’
Opportunity,” The Hindu, February 2, 2016. Also consult Rinku Ghosh,
“Dragon Puffs Beyond Borders,” The Pioneer (New Delhi), June 28, 2015;
Amitendu Palit, “China’s MSRI and Indian Business,” Financial Express,
December 12, 2015; and Pravakar Sahoo, “India Should Be Part of the
new Silk Route,” Hindu Business Line, December 22, 2015.
74. In a recent interview, a former Chinese ambassador who serves as head of
the China-Pakistan Friendship Association called the corridor “China’s
flagship project” in the Belt and Road initiatives. “CPEC is Flagship
OBOR Project,” Business Recorder (Karachi), January 29, 2016. For more
on the CPEC, see Jabin Jacob’s Chap. 5 herein.
75. Consult Rajat Pandit, “India Expresses Strong Opposition to China
Pakistan Economic Corridor, Says Challenges Indian Sovereignty,”
Economic Times, March 16, 2017; Devirupa Mitra, “Modi Criticises
China’s One Belt One Road Plan, Says Connectivity Can’t Undermine
Sovereignty,” The Wire, January 17, 2017, https://thewire.in/100803/
modi-criticises-chinas-one-belt-one-road-plan-says-connectivity-corridors-
cant-undermine-sovereignty/; and “Modi Told China, Pakistan Economic
Corridor Unacceptable: Sushma,” Business Standard, May 31, 2015.
76. For more on this point, see Andrew Small, The China-Pakistan Axis: Asia’s
New Geopolitics (Oxford University Press, 2015); and M.D. Upadhyay,
Sino-Pak Nexus and Implications for India (New Delhi: Vij Books India:
2015).
77. Quotation in James Kynge et al., “How China Rules the Waves,” Financial
Times, January 12, 2017. Also consult “Chinese Navy Ships to be Deployed
at Gwadar Port: Pakistan Navy Official,” Economic Times, November 25,
2016. For a report that Beijing may station marines at Gwadar, see Minnie
Chan, “As Overseas Ambitions Expand, China Plans 400 Per Cent Increase
to Marine Corps Numbers, Sources Say,” South China Morning Post,
March 13, 2017.
78. C. Raja Mohan, “The Great Game Folio,” Indian Express, July 10, 2013.
79. C. Raja Mohan, “Redoing India-China Sums,” Indian Express, March 23,
2015. Also see his argument in “Reimagining the Triangle,” Indian
Express, April 20, 2015.
80. Salman Haider, “Karakoram Corridor,” The Statesman (Calcutta),
February 25, 2014; and “India Not Worried Over the Construction of the
SRI LANKA, THE MARITIME SILK ROAD, AND SINO-INDIAN RELATIONS 161
88. According to Indian naval officials, Chinese submarines have been sighted
in the Indian Ocean an average of four times every three months. Sanjeev
Miglani and Greg Torode, “Wary of China’s Indian Ocean Activities, US,
India Discuss Anti-Submarine Warfare,” Reuters, May 2, 2016. For
acknowledgment by a top US military commander that the USA and India
are jointly monitoring Chinese naval traffic in the Indian Ocean, consult
Ajai Shukla, “US Pacific Commander Admits US-India Jointly Tracking
Chinese Submarines,” Business Standard, January 18, 2017.
89. “China Hints More Bases on Way after Djibouti,” Reuters, March 8, 2016;
Mandip Singh, “Port de Djibouti: China’s First Permanent Naval Base in
the Indian Ocean,” (New Delhi: Institute for Defense Studies and Analyses,
February 22, 2016); and David Brewster, “China’s First Overseas Military
Base In Djibouti Likely To Be A Taste Of Things To Come,” The Lowy
Interpreter, December 27, 2015, http://www.lowyinterpreter.org/
post/2015/12/02/Chinas-first-overseas-military-base-in-Djibouti-
likely-to-be-a-taste-of-things-to-come.aspx.
90. Kanwal Sibal, “Trouble All Around,” Telegraph (Calcutta), October 3,
2016.
91. Sutirho Patranobis, “Expanding Indo-China Ties a Win-Win Oppor-
tunity: New Devpt Bank’s KV Kamath,” Hindustan Times, Septem-
ber 4, 2016; and Madhura Karnik and Manu Balachandran, “An Old
Hand In Indian Banking Will Head The New BRICS Bank,” Quartz
India, May 11, 2015, http://qz.com/402168/an-old-hand-in-indian-
banking-will-head-the-new-brics-bank/.
92. For a positive sign, consult Simon Denyer, “Asia’s New Infrastructure
Bank Is Out to Prove it’s Not China’s Pawn,” Washington Post, June 23,
2016.
93. See “Beijing Wants India, Others to Join CPEC Due to Pakistan’s Appetite,
Says Chinese Media,” Economic Times, December 30, 2016; and Dipanjan
Roy Chaudhury, “China Wants India in One-Belt-One-Road Meet, India
Remains Wary,” Economic Times, January 7, 2017.
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CHAPTER 7
Srikanth Kondapalli
S. Kondapalli (*)
Jawaharlal Nehru University, New Delhi, India
Vice Premier Zhang Gaoli quoted a figure of USD $ 900 billion, as noted
above, Chinese Foreign Minister Wang Yi has suggested a figure of USD
$ 890 billion. The China Development Bank and other financial institu-
tions have also outlined financing of projects roughly coinciding with the
OBOR projects.
However, having learned lessons from its own experiments in infra-
structure project development in China in the wake of the 1997 Asian
financial crisis and the 2007 global financial crisis, today China insists on
public–private partnership and market principles. For, as Luo Yuze has
argued, OBOR emphasizes, on the one hand, the role of the market and
“risk reduction and profitability” and, on the other, “ non-alliance, non-
confrontation and not directed against any other country.”9 OBOR is
not without its security risks. According to Liu Haiquan and other con-
tributors to this book, OBOR and its component the MSRI face acute
security hurdles, including sovereignty issues, transnational crime,
piracy and others. Liu argues that to bring about the successful imple-
mentation of OBOR, China should, in addition to its own deployments,
factor in American and Russian roles.10
Turning to the Indian Ocean Region (IOR), which is the thrid largest
ocean in the world and has come to prominence recently due to the rise of
China and India as well as the continuing energy-dependence of South
Korea, Japan, and Southeast Asia on it, a number of Chinese scholars have
suggested a revision of China’s policy in this area. Previously, many
Chinese people have argued that India intends to “control” the IOR
through its naval modernization program.11 It is also a common refrain in
China that the main driver for the growth in Indian enthusiasm is to fulfill
its “great power” (大国心态) ambition, although Chinese scholars do not
mention China’s own ambitions in this regard.12 However, recently, some
have seen an opportunity to work with India in enhancing maritime secu-
rity in the region.13 For instance, Xie Bo and Yue Rong suggest that the
IOR provides foreign countries with a “wide strategic choice” to enter it,
as neither the United States of America (USA) nor the Indian navies could
dominate the entire region. They suggest that while giving full play to
consultations and cooperative mechanisms in the maritime domain, China
should fully utilize its position as a UN Security Council (UNSC) member
176 S. KONDAPALLI
for visa exemption for Hong Kong.22 Vice Minister of Foreign Trade and
Economic Cooperation Liu Shanzai visited Maldives on April 23, 1998 in
order to further economic and trade contacts.23 The following year, the
Chairman of the Chinese People’s Political Consultative Conference
(CPPCC), Li Ruihuan, visited Malé. The first military visit was made by
the Maldivian side when in September 2000 its Defense Minister and
Abdullah Satar Anmair voyaged to China.
In February 2001, Assistant Foreign Minister Wang Yi visited Maldives
and termed bilateral relations “excellent.”24 Two months later, People’s
Liberation Army (PLA) Chief of Staff Fu Quanyou travelled to the
country. On that occasion, President Gayoom briefed him on the pro-
tection and security of small states as well as the threat posed by rising
sea levels, both high-priority issues for Maldives.25 In the following
month, March 2001, Premier Zhu Rongji visited Maldives—the first
time such a high-ranking leader from China had come—and partici-
pated in the inauguration functions for the fourth phase of a housing
project in Malé.26 The first phase had been launched earlier, in 1988.27
During Zhu’s visit, the two countries signed an Agreement on Economic
and Technical Co-Operation.28 On this occasion, Zhu stated that “China
wants to be a friend and a good partner of the Maldives forever.”29 He
also supported Maldivian concern about the effect of rising sea levels on
the status of the least developed countries.30
In November 2001, Defense Minister Chi Haotian along with PLA
Navy Deputy Commander Ma Xingyuan went to Maldives. On the occa-
sion, Brigadier General Mohamed Zahir, chief of the Maldives National
Security Service, stated that his country was “willing to make joint efforts
with China to safeguard peace and development in the region and in the
world” and expressed gratitude for the support and assistance given by the
Chinese government and military to the nation-building and military con-
struction of Maldives.31 Another Chinese report quoted Zahir as thanking
the “Chinese armed forces for their long-term support and help to
Maldives’ national development and army building.”32 However, a
reported Chinese proposal for building a submarine base at Marao proved
to be illusory.33
Since 2002, both foreign ministries have been holding annual consulta-
tions about foreign policy. In September 2002, Maldives expressed satis-
faction at China’s ratification of the Kyoto Protocol.34 Vice Premier Wu Yi
visited Maldives in March 2004 and stated that her country “counted the
Maldives among its very close friends and that her Government attached a
178 S. KONDAPALLI
Wang Fukang, the idea of the MSRI with Maldives was first mooted with
Maldives in January 2014 during a meeting between officials from the two
sides. With respect to Maldives, in June 2014, Ali Hameed, former Vice
Foreign Minister and member of the National Executive Committee of
the Republican Party of the Maldives, suggested his country could benefit
from the MSRI in terms of tourism, trade, and culture. Two months later,
President Yameen offered a positive response to the MSRI.
The Xi–Yameen joint statement in September 2014 mentions the same
in addition to specific issues of maritime cooperation. More concretely, it
states, “We have agreed to jointly build the 21st Century Maritime Silk
Road and take this opportunity to enhance cooperation in the fields of
maritime economy, maritime security, ocean research, environment pro-
tection, and disaster prevention. We will also try to start some key projects
that can yield quick results, at an early date.”46
In December 2014 a Joint Committee on Trade and Economic Coope
ration between the two sides signed a Memorandum of Understanding
(MoU) for furthering the MSRI.47 The second meeting of this Joint
Committee in September 2015 signed an MoU to initiate discussions on
a free-trade area.48
The Xi-Yameen talks in September 2014 yielded the following outcomes:
It is worth noting that the month before Xi’s visit to Maldives, the latter’s
President Abdulla Yameen journeyed to China and attended the second
Summer Youth Olympic Games in Nanjing. Two meetings of top leaders
180 S. KONDAPALLI
Wang stated that China would provide concessional loans and invest-
ments to Maldives for projects relating to the fisheries sector, aquatic
products, and so on.
Thirdly, Maldives offers unlimited tourism potential and Chinese are
flocking to the islands. In 2013, 284,000 Chinese tourists visited the
Maldives, accounting for almost 31 percent of total tourist arrivals. Three
years earlier, only 120,000 Chinese visited Maldives. Tourism Minister
Ahmed Adeeb stated in late June that his country will borrow $400 mil-
lion from China Exim Bank to develop a runway for the Ibrahim Nasir
International Airport. The contract previously had been given to an
Indian company, GMR, but in early 2012 GMRit exited the project and
182 S. KONDAPALLI
Indian Role
India’s Ministry of External Affairs’ annual report states bilateral ties with
Maldives are “close and friendly [and that] India attaches the highest impor-
tance to its relations with the Maldives and is committed to cooperate with
the Maldives in its developmental efforts especially in the human resource
development and health sectors.” (Ministry of External Affairs, 2009–2010)
Besides the maritime areas, both have been conducting a series of Dosti
(friendship) exercises at the coastguard level since the mid-1990s. Aside from
this, due to the tension between different political parties in the Maldives,
various leaders at different times have sought Indian involvement and help
because of the latter’s geographical proximity, resources, democratic system,
and ability to assist quickly. For instance, at the request of the then belea-
guered Maldivian president, India launched Operation Cactus in November
1988, mobilizing over 1600 troops to counter a coup attempt. Today, India
has a trilateral naval cooperation agreement with Maldives and Sri Lanka and
has given naval craft to Maldives to protect the atolls.
The bickering among Maldives political parties is legendary, with dif-
ferences between the Maldivian Democratic Party, Jumhooree Party,
Dhivehi Qaumee Party, Progressive Party of Maldives, and others coming
to the fore frequently.59 Recently these differences have also been spilling
into the international domain, with several leaders voicing preferences for
this or the other country. The maverick political nature of island politics
THE MARITIME SILK ROAD AND CHINA–MALDIVES RELATIONS 183
also tested relations with India when pro-Indian president Nasheed was
ousted and sent to jail for 13 years.60
With Nasheed gone, so were the Indian private company’s fortunes in
terms of their prospects of building the capital airport; this project, as noted
above, has gone to a Chinese company.61 In 2010, the Indian private firm
GMR was given contracts to upgrade the capital’s airport but this was
revoked in 2012 following allegations of corruption and financial burden.62
The arbitration procedure and the wrangling that ensued threatened to
affect the bilateral relations between Maldives and India.63 India also fretted
about Maldives’ passage in July 2015 of a law that provided 10 percent of
the 298 km2 of Maldivian territory to foreign bidders for land reclamation
and development.64 The law also provides that foreigners who invest more
than USD $1 billion can purchase land for development as long as 70 per-
cent of the land is reclaimed.65 These constitutional amendments giving con-
tracts to foreign countries to reclaim land provide new opportunities for
China because it has huge resources and experience in such reclamation
activity in the South China Sea.66 Chinese scholars such as Hu Shisheng and
Fu Xiaoqiang suggest that these lands could be utilized by Chinese compa-
nies for economic development.67 Scoffing at speculations that China will
exploit the latest legislation to build bases in the south central Laamu Atoll
(where China is involved in a road development project), China’s foreign
ministry spokesman stated on July 28, 2015 that such conjectures were
“baseless.”68
In recent times, China’s stock among some political parties has been
rising, including with the current President of Maldives. For instance, the
Dhivehi Qaumee Party is considered to be weighing up China as an
opportunity and a counterbalance to India. Another, the Progressive Party
of Maldives, promotes Islamic traditions. One of its MPs, Ibrahim
Muththalib, was quoted in the local press as stating:
China is a good country. They help us a lot. They have built schools here.
China has been helping Maldivian citizens. And Chinese vegetables are
great. And so are Chinese fruits. Chinese hotels are being built across the
world even as we speak. We love the Chinese people very much. China is a
country that Maldivian people love very much. China also has a lot of land.
And China even has a sustainable economy. Therefore, I use this moment to
declare the Maldivian people’s love for China.69
role in the Maldivian politics, although officially it says that it will not
interfere in the internal affairs of any country. During demonstrations over
the arrest of former President Nasheed or the arrest of the Vice President
on charges of attempting to assassinate the President in a recent bombing
incident, China’s spokespersons called for no outside interference or stated
that independence of the island nation should be respected. In the light of
the above political turmoil and past history, the threat of a coup with for-
eign mercenaries’ assistance was said to be high by Vice President
Mohamed Waheed Deen in January 2013.70
Although China’s political influence in Maldives is increasing, the latter
cannot ignore India given India’s proximity, regional prominence, and
capabilities. In the past, India has provided Maldives with quick assistance
when needed. For example, in December 2004, in the wake of a major
tsunami, India rushed ships, planes, and helicopters with relief material,
medical teams, and specialized personnel to Maldives and provided emer-
gency relief while China, for its part, contributed relief “commensurate to
its ability” and in cash. When in December 2014, the desalination plant
supplying water to the capital city of Malé was damaged and Maldives asked
for international help, India was the first to send emergency supplies by air
and then 900 tonnes of water by sea through INS Deepak, with an addi-
tional production of 200 tonnes a day. Others also pitched in, with China
sending 20 tonnes of water by air a day after and 600 tonnes by sea in less
than a week.71 On this occasion, China’s foreign ministry spokesman Hong
Lei said: “We will keep close contact with the Maldives side and [review]
subsequent aid measures based on the [situation in] the Maldives.”72
Conclusions
As the MSRI takes shape, Maldives is increasingly becoming significant for
China as reflected in President Xi’s maiden visit to Malé in 2014. Plans for
the MSRI envisage building ports and other maritime infrastructure facili-
ties, and some of the projects that China has undertaken in Maldives fit with
this orientation. Maldives has accepted the MSRI and joined the AIIB. Still,
of an estimated nearly $1 trillion in investments embodied in the MSRI and
related projects, China’s relative allocation to infrastructure construction in
Maldives is miniscule, although it remains significant for the latter.
Overall, China–Maldives relations have been on the upswing recently and
appear to be so at the behest of Beijing’s increasing initiatives. The September
2014 joint statement ushered in a “Future-Oriented All-Round Friendly
and Cooperative Partnership” between the two. Today, bilateral ties are
THE MARITIME SILK ROAD AND CHINA–MALDIVES RELATIONS 185
China 9523.65 0.20 12,528.99 0.27 19,017.09 0.40 34,678.15 0.69 36,981.12 0.61
Taiwan 14,773.04 0.31 19,844.75 0.43 25,202.88 0.53 14,426.05 0.29 19,875.88 0.33
Hong Kong 71,393.74 1.51 63,528.63 1.39 53,920.55 1.14 115,571.02 2.30 123,401.81 2.05
investments from China in the fields of tourism, real estate, banking and
finance, transportation, and renewable energy.81
Defense cooperation between the two countries is imminent, with
long-term consequences for both India and the USA. China’s ambassador
to Maldives has already alluded to the maritime cooperation between the
two in the field of training maritime personnel, discussions, and the sign-
ing of MoUs in the area of maritime cooperation. This was also reiterated
in the joint statement by Xi and Yameen. In 2000 it was reported, but later
denied, that China contemplated building a submarine base at Marao in
Maldives. This issue is likely to be revived in future. It is interesting to
note that President Xi termed Maldives (and later Sri Lanka) as a “pearl”
in the Indian Ocean, reviving the “String of Pearls” construct. While
China does not appear to be implementing a “String of Pearls” strategy in
Maldives right now, its geographical location is increasingly wooing
Beijing’s its global ambitions. It is interesting that the iHavan location of
Chinese investments appears to be more strategic than commercial.
Notes
1. “一带一路”大事记” (“‘Yidai Yilu’ Dashiji”) [Chronology of One Belt, One
Road] 大陆桥视 [New Silk Road Horizon], No. 1 (2015), 23.
2. “Belt and Road Initiative facilitates more opening-up China,” Xinhua,
April 22, 2015 http://news.xinhuanet.com/english/2015-04/22/
c_134174847.htm.
188 S. KONDAPALLI
26. “The President felicitates the Chinese President on the Occasion of the
30th Anniversary of the Establishment of Diplomatic Relations between
the Maldives and China,” The Maldives, October 14, 2002, http://
www.themaldives.com/scripts/externallink.asp?main=http://www.
presidencymaldives.gov.mv.
27. “President Gayoom and Chinese Premier Zhu Rongji Inaugurate the
Fourth Phase of the Malé Housing Project,” The Maldives, May 17, 2001,
http://www.themaldives.com/scripts/externallink.asp?main=http://
www.presidencymaldives.gov.mv.
28. “The Maldives and China hold official talks,” The Maldives, May 17, 2001,
http://www.themaldives.com/scripts/externallink.asp?main=http://
www.presidencymaldives.gov.mv.
29. “Premier Zhu Rongji Held Talks with Maldivian President,” May 17, 2001,
http://www.fmprc.gov.cn/eng/10364.html.
30. “China backs Maldives battle over rising sea level,” Haveeru, May 17, 2001,
http://www.haveeru.com.mv/English.
31. Han Jie, “Chi Haotian Meets with Maldives Guests,” Xinhua Hong Kong
Service November 12, 2001.
32. “Chinese Defense Minister Meets Maldivian Delegation,” Xinhua,
November 12, 2001.
33. A.B. Mahapatra, “China Acquires a Base in Maldives against India with
Some Help from Pakistan,” July 27, 2001, http://www.indiareacts.com.
34. “The President Identifies China’s ratification of the Kyoto Protocol,”
September 4, 2002, http://www.themaldives.com/scripts/externallink.
asp?main=http://www.presidencymaldives.gov.mv.
35. “The President Meets the Vice Premier of the Chinese State Council,”
March 29, 2004, http://www.themaldives.com/scripts/externallink.
asp?main=http://www.presidencymaldives.gov.mv.
36. “The Vice Chairman of the Standing Committee of the National People’s
Congress of China, Calls on the President,” June 13, 2004, http://
www.themaldives.com/scripts/externallink.asp?main=http://www.
presidencymaldives.gov.mv.
37. On this occasion, Li met with the Chinese staff of the Shanghai Construction
Group who were involved in the construction of Ministry of Foreign Affairs
building. See “Li Zhaoxing Holds Talks with Maldivian Foreign Minister,”
April 2, 2005, http://www.fmprc.gov.cn/eng/zxxx/t190336.htm.
38. Ministry of Foreign Affairs, Department of Policy Planning, China’s Foreign
Affairs 2006 (Beijing: World Affairs Press, 2006), 231. When the Wenchuan
earthquake hit Sichuan Province in 2008, Maldives made a donation of
$50,000. See Ministry of Foreign Affairs, Department of Policy Planning,
China’s Foreign Affairs 2009 (Beijing: World Affairs Press, 2009), 227.
192 S. KONDAPALLI
52. “Li Yuanchao to Attend 3rd China-South Asia Expo and 23rd China
Kunming Import and Export Fair,” June 9, 2015, http://www.fmprc.gov.
cn/mfa_eng/wjdt_665385/wsrc_665395/t1271758.shtml.
53. “Negotiations Launched for China-Maldives Free Trade Agreement,”
September 9, 2015, http://maldivesindependent.com/business/
negotiations-launched-for-china-maldives-free-trade-agreement-117176.
54. Teddy Ng, “Maldives Supports China’s Plan for ‘Maritime Silk Road,’”
South China Morning Post, September 16, 2014.
55. “China among Four Countries Interested in Maldives Youth City Project,”
Xinhua, July 22, 2014.
56. “Chinese Envoy Sees Expanded China-Maldives Economic Cooperation,”
Xinhua, October 28, 2014.
57. “Chinese Envoy Sees Expanded China-Maldives Economic Cooperation,”
Xinhua, July 21, 2014; and Bi Mingxin, “Maldives Supports China’s Plan
for ‘Maritime Silk Road,’” Xinhua, September 13, 2014.
58. Faisal’s interview by Yin Yeping, “Maldives Ambassador Talks Cultural
Exchange,” Global Times, February 8, 2015, http://www.globaltimes.cn/
content/906611.shtml.
59. Seema Guha, “China Widens Maldives Reach as India Falls Behind,” The
Quint, August 8, 2015, http://www.thequint.com/world/2015/08/08/
china-widens-maldvies-reach-as-india-falls-behind-2. On the limitations in
the democratic experiment in Maldives, see Azra Naseem, “Keeping Up
with the Authoritarians,” Dhivehi Sitee, September 2, 2015, http://www.
dhivehisitee.com/executive/keeping-up-with-the-authoritarians.
60. The anti-Indian rhetoric of some parties in Maldives and China’s new role
in the island nation is said to be the basis for Prime Minister Modi’s Indian
Ocean diplomacy recently, when he skipped Malé but went to Sri Lanka,
Seychelles, and Mauritius. See Darshana M. Baruah, “Modi’s Trip and
China’s Islands: The Battle for the Indian Ocean,” The Diplomat, March 11,
2015, http://thediplomat.com/2015/03/modis-trip-and-chinas-islands-
the-battle-for-the-indian-ocean. It is also said that under Indian influence
the Addu Summit of the SAARC had insisted on “institutionalization” of
the SAARC instead of expanding it with new members (like China).
61. Anand Kumar, “Chinese Engagement with the Maldives: Impact on Security
Environment in the Indian Ocean Region,” Strategic Analysis, 36, no. 2
(2012).
62. “GMR-Maldives spat: China behind Scrapped GMR Deal to Extend
Footprint in Maldives?” The Economic Times (December 15, 2012), http://
economictimes.indiatimes.com/industr y/transportation/airlines-/
-aviation/gmr-maldives-spat-china-behind-scrapped-gmr-deal-to-extend-
footprint-in-maldives/articleshow/17622309.cms.
194 S. KONDAPALLI
63. “Maldives to Face $800 million Claim,” Global Times, December 13, 2012,
http://www.globaltimes.cn/content/750092.shtml.
64. “Maldives Constitutional Amendment Opens Door for Chinese Military
Base,” July 25, 2015, http://www.wantchinatimes.com/news-subclass-
cnt.aspx?id=20150725000082&cid=1101.
65. Shubhajit Roy, “New Land Law in Maldives Gives India China Chills,”
Indian Express, July 23, 2015, http://indianexpress.com/article/india/
india-others/new-land-law-in-maldives-gives-india-china-chills.
66. Eva Abdullah, one of the 14 parliament members who opposed the amend-
ment, was cited as saying that this measure would lead to Maldives becom-
ing a colony of China. Zachary Keck, “Get Ready: China Could Build New
Artificial Islands Near India,” National Interest, July 29, 2015, http://
www.nationalinterest.org/blog/the-buzz/get-ready-china-could-
build-new-artificial-islands-near-13446.
67. Li Xiaokun, “Land Sale Isn’t for Military Purpose, Says Maldives,” China
Daily, July 25, 2015, http://europe.chinadaily.com.cn/world/2015-
07/25/content_21404565.htm.
68. “China says not planning military bases in the Maldives,” Reuters July 28,
2015, http://www.reuters.com/article/2015/07/28/us-china-maldives-
idUSKCN0Q20IU20150728.
69. Quoted by Azra Naseem, “From Maldives, With Love,” Dhivehi Sitee, April 26,
2012, http://www.dhivehisitee.com/executive/maldives-%E2%99%A5-china.
70. “Threat of a Coup with the Assistance of Mercenaries Is Still Imminent—
Vice President,” Miadhu, January, 13, 2013.
71. See Azra Naseem, “Like Water for Politics: Lessons from Malé Water
Crisis,” Dhivehi Sitee, December 9, 2014, http://www.dhivehisitee.com/
executive/Malé-water-crisis.
72. Hong cited at “Spokesman: China to Continue to Aid Maldives,” Global
Times, December 10, 2014, http://www.globaltimes.cn/content/
896022.shtml.
73. “China and Maldives.”
74. In 2000, over 5000 Chinese tourists visited Maldives and in 2001 it
increased to 6707. See “Maldives Embarks on Advertising Tourism in
China,” January 1, 2002, http://www.haveeru.com.mv/English.
75. People’s Republic of China, Development Resource Council, “An Analysis
on the Contribution of China’s Economic Growth to Global Economic
Growth,” 2015, http://www.chinadaily.com.cn/m/drc/2015-07/28/
content_21432074.htm.
76. Ministry of Foreign Affairs, Department of Policy Planning, China’s Foreign
Affairs 2011 (Beijing: World Affairs Press, 2011), 234.
THE MARITIME SILK ROAD AND CHINA–MALDIVES RELATIONS 195
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Economic Belt and 21st-Century Maritime Silk Road.” March 28, 2015.
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Yang, Yi, “China, Maldives eye stronger partnership with all-round cooperation.”
Xinhua, September 16, 2014a.
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eign ministry.” Xinhua, September 9, 2014b.
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of the Indian Ocean Strategy] 当代社科视野 [Contemporary Social Science
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CHAPTER 8
Amitendu Palit
The MSRI connects the Chinese coast, through the South China Sea and
the Indian Ocean, to Southeast Asia and South Asia, and further westward
to West Asia and Europe through the Persian Gulf and Mediterranean Sea.
Its purported aim is to build effective maritime transport linkages by
developing high-capacity, efficient seaports and integrating them through
sea-lanes, as well as land corridors being built as part of the new Silk Road
Economic Belt connecting China and Europe by land.1 The scale and
scope of the initiative is unprecedented leaving little doubt about the
numerous political and economic objectives it aims to secure, including
subnational objectives, from the Chinese perspective.2
A. Palit (*)
Senior Research Fellow and Research Lead (Trade and Economic Policy),
Institute of South Asian Studies, National University of Singapore, Singapore,
Singapore
Rationale
The economic rationale of the MSRI resonates with the conceptual notion
of “economic corridors.” Corridors link economic agents across specific
geographies by connecting hubs that are large concentrations of economic
resources and actors.3 They, typically, reduce costs for both producers and
consumers by improving connectivity for transporting products from
points of origin to final destinations of consumption.4 From the perspec-
tive of regional development, economic corridors aim to integrate infra-
structure improvements with opportunities in trade and investment and
facilitate linkages of regions with global production networks.5
The conceptualizations of the MSRI and the larger “One Belt, One
Road” (OBOR), of which the MSRI is a part, as economic corridors are
hardly surprising given China’s long involvement in transport corridors.
Apart from the Greater Mekong Sub-Region (GMS) corridor connecting
Western China to “IndoChina” (mainland Southeast Asia comprising
Cambodia, Lao, Myanmar, Thailand, Vietnam), China is actively involved
in corridor development in Central Asia as part of the Central Asia
Regional Economic Cooperation (CAREC)’s transport connectivity ini-
tiatives. Moreover, China also has plans for multimodal economic corri-
dors connecting China with Pakistan, and with Bangladesh, India, and
Myanmar, as connectivity constructs that would eventually merge with
the MSRI and the OBOR.
The MSRI’s new maritime traffic routes should aim to benefit eco-
nomic agents dispersed across its geography by reducing costs of maritime
movement. Lower transport costs are essential for generating higher trade
flows from a network of free-trade areas as specified in China’s National
Development and Reform Commission (NDRC)’s vision document on
the MSRI.6 For firms trading cross-border within the span of the MSRI,
the cost efficiency of the new route is fundamental with transportation and
logistics costs varying widely across the terrain.
Africa
Europe
Middle East
Central Asia
South Asia
Southeast Asia
East Asia
inefficiencies and capacity shortages and are fast losing market share to
upcoming private ports.12 But growth of new ports has been stunted by
various factors including low enthusiasm from private investors due to
high domestic capital costs, and political difficulties in acquiring land
for developing back-end infrastructure. Larger and more efficient port
facilities require the functional revamp of major ports and fresh invest-
ments in new ports, both of which are going to take time.
China’s expansive investment plans for the MSRI would include India,
given that China has been investing heavily in maritime infrastructure in
South Asia (e.g., Colombo in Sri Lanka, Gwadar in Pakistan). New
developments, like the agreement between one of India’s largest private
ports, Mundra, in the western state of Gujarat, and the Guangzhou port
of China, augur well for future.13 But Indian security concerns entail
viewing Chinese investments in Indian ports with skepticism. Indeed,
the uncertainty over whether the MSRI is primarily an economic corri-
dor for upgrading cross-continental maritime infrastructure, or a geo-
strategic design for serving China’s security interests, is instrumental
behind India’s noncommittal attitude to the project.14
enabling users to utilize the benefits of various FTAs. Not all new mari-
time facilities of the MSRI can be transshipment hubs as some may lack
the ability to handle giant containers with large cargoes. Some of the new
facilities therefore might not be attractive for users of regional FTAs.
More ROOs will be added to the region by the upcoming RCEP. Both
China and India have strong stakes in the RCEP for preserving strategic
spaces in the trade architecture of the Asia-Pacific, following the Trans-
Pacific Partnership (TPP) which excludes them both.20 The TPP would
institutionalize trade rules that are different from the ASEAN-FTA style
rules which are more familiar to China and India.21 With the RCEP having
several members common to the TPP (Australia, Brunei, Japan, New
Zealand, Malaysia, Singapore, and Vietnam), the TPP “influence” on
ongoing RCEP negotiations is inescapable. The ROOs are particularly sen-
sitive to such influence, since TPP members in RCEP would prefer largely
similar rules in both agreements for the greater benefit of their businesses.
Notwithstanding the eventual outcome, the RCEP will institute com-
mon trade rules for major economies in East, Southeast, and South Asia
(India), requiring businesses from these regions to transport cargo across
territories in defined fashions in order to avail of preferential tariff bene-
fits. Businesses trading between China and India will look at RCEP
closely as this would be the largest RTA to include both countries. It
would bring together a significant part of the MSRI extending southward
from the Chinese coast to the South China Sea and Malacca Strait, and
further westward to the Bay of Bengal, parts of the Indian Ocean, and the
Arabian Sea, as a “common” territory allowing direct consignment of
cargo. This should encourage Chinese and Indian businesses to look
closely at GVCs connecting both countries through Southeast Asia. The
MSRI’s new maritime infrastructure facilities could play a decisive role in
this regard provided businesses can use the RCEP’s ROOs conveniently
across the MSRI.
Land-Transit Challenges
The OBOR envisages that maritime cargo offloaded by containers at dif-
ferent seaports would be transported across cross-border hinterlands
through land routes provided by the Economic Belt. Vehicles carrying
cargo would require seamless transit facilities, including number plates
with dual registrations, allowing them to move easily across borders.
Extending such facilities will require political agreements to be made
212 A. PALIT
China Shanghai (1st), Shenzhen (3rd), Hong Kong SAR (4th), Ningbo-
Zhoushan (6th), Qingdao (7th), Guangzhou (8th), Tianjin (10th),
Dalian (12th), Xiamen (18th), Lianyungung (26th), Yingkou (29th),
India Jawaharlal Nehru (34th)
Other Regions along MSRI
East Asia Busan, South Korea (5th); Kaohsiung, Taiwan (14th); Keihin, Japan
(17th); Hanshin, Japan (28th); Nagoya, Japan (49th)
Southeast Asia Singapore (2nd); Port Kelang, Malaysia (13th); Tanjung Pelepas,
Malaysia (20th); Tanjung Priok, Jakarta, Indonesia (22nd); Laem
Chabang, Thailand (23rd); Ho Chi Minh, Vietnam (24th); Manila,
Philippines (36th); Tanjung Perak, Surabaya, Indonesia (44th);
South Asia Colombo (33rd)
West Asia Jeddah, Saudi Arabia (30th); Salalah, Oman (41st);
Africa Port Said East, Egypt (43rd);
Europe Rotterdam, Netherlands (11th); Hamburg, Germany (15th);
Antwerp, Belgium (16th); Bremen, Germany (25th); Algeciras Bay,
Spain (31st); Valencia, Spain (32nd); Gioia Tauro, Italy (44th);
Land Connectivity
The BBIN agreement mentioned earlier, along with India’s ongoing plans
to connect to Myanmar and Thailand, reflects some progress on land-
connectivity efforts with India’s neighbors. These efforts should comple-
ment the BCIM and link India’s northeastern states to China, Bangladesh,
Bhutan, Nepal, Myanmar, and Thailand through overlapping road net-
works. Problems will persist over transit and transport permits, as dis-
cussed earlier, as well as over efficient customs practices at cross-border
land ports. Given that a considerable portion of these road links would
traverse locations in the Himalayan mountain range at high altitude and
through ecologically fragile areas, the challenges of construction will be
arduous, particularly for building “all-weather” roads capable of trans-
porting multimodal cargo.
The challenge for land connectivity is more formidable in India’s north-
west. India’s continuing political standoff with Pakistan does not produce
encouraging prospects for integrating its northern and western states with
THE MSRI, CHINA, AND INDIA: ECONOMIC PERSPECTIVES AND POLITICAL... 217
Final Impressions
India’s relatively poor maritime infrastructure and logistics capabilities, par-
ticularly the inefficiencies of its major ports, create distinct disadvantages
for its firms in exploiting the potential economic opportunities of the
MSRI. Businesses from Chinese, European, and several Southeast Asian
economies are better placed to exploit the MSRI as an economic corridor.
More investment in maritime facilities and modernization of existing capac-
ities are important for India. Chinese investment and expertise could be
helpful in this regard. Such investments are unlikely to enthuse India until
it is convinced that OBOR and the MSRI are international ventures much
like the Asian Infrastructure Investment Bank (AIIB) and not China’s
national initiative for serving specific strategic interests, such as gaining
greater strategic control over the Indian Ocean, or creating alternative sea
routes for transporting energy from Africa in order to reduce its depen-
dence on the clogged Malacca Strait.41 The impression of “China-centrality”
in the MSRI is strengthened by the failure of its official vision statement to
mention non-Chinese regional forums. Nonetheless, notwithstanding the
geopolitical character of the MSRI, which is clearly aligned to serve Chinese
national interests, India can utilize the initiative for economic benefits, pro-
vided it can overcome its domestic infrastructure deficit.42
As argued by some Chinese experts, a more objective Indian perspective
on the MSRI will be able to emerge after a clear outlining by China of the
specific projects being planned and their economic benefits.43 Until such
clarity is forthcoming, the possibility that the MSRI might induce counter-
strategic responses from India, such as the Project Mausam, intended to
re-establish ties with ancient trade partners in the Indian Ocean, cannot be
overlooked.44 Chinese strategic opinions are already reflecting on whether
India might use its strategic influence in the Indian Ocean to leverage a
THE MSRI, CHINA, AND INDIA: ECONOMIC PERSPECTIVES AND POLITICAL... 219
Annex 1
Japan 10 14 7 19 11 9 10
Hong Kong, 15 17 14 14 13 13 18
China
Korea, Rep. 21 24 18 28 21 21 28
China 28 38 23 22 35 29 36
Southeast Asia
Singapore 5 3 2 6 8 11 9
Malaysia 25 27 26 10 32 23 31
Thailand 35 36 30 39 38 33 29
Vietnam 48 61 44 42 49 48 56
Indonesia 53 55 56 74 41 58 50
Philippines 57 47 75 35 61 64 90
Cambodia 83 71 79 78 89 71 129
Lao PDR 131 100 128 120 129 146 137
Myanmar 145 150 137 151 156 130 117
South Asia
India 54 65 58 44 52 57 51
Pakistan 72 58 69 56 75 86 123
Maldives 82 49 82 72 74 92 148
Sri Lanka 89 84 126 115 66 85 85
Bangladesh 108 138 138 80 93 122 75
Central Asia
Kazakhstan 88 121 106 100 83 81 69
Russia 90 133 77 102 80 79 84
Tajikistan 114 115 108 92 113 119 133
Uzbekistan 129 157 148 145 122 77 88
Turkmenistan 140 122 146 116 155 134 153
Kyrgyzstan 149 145 147 127 151 145 155
West Asia
Saudi Arabia 49 56 34 70 48 54 47
Oman 59 74 57 31 73 80 67
Iraq 141 149 131 139 147 136 116
Yemen, Rep. 151 159 153 134 141 144 124
Africa
Egypt, Arab 62 57 60 77 58 43 99
Rep.
Kenya 74 151 102 50 90 60 45
Ethiopia 104 102 134 121 96 97 78
Tunisia 110 146 118 73 120 124 80
(continued )
THE MSRI, CHINA, AND INDIA: ECONOMIC PERSPECTIVES AND POLITICAL... 221
(continued)
Notes
1. People’s Republic of China, National Development Reform Commission,
Ministry of Foreign Affairs, and Ministry of Commerce, “Vision and
Actions on Jointly Building Silk Road Economic Belt and Twenty-First-
Century Maritime Silk Road,” March 28, 2015, http://en.ndrc.gov.cn/
newsrelease/201503/t20150330_669367.html.
2. Jean-Marc F. Blanchard, “Probing China’s Twenty-First-Century Maritime
Silk Road Initiative (MSRI): An Examination of MSRI Narratives.”
Geopolitics 22, no. 2 (2017): 246–268.
3. Hans-Peter Brunner, “What Is Economic Corridor Development and What
Can It Achieve in Asia’s Subregions?” in ADB Working Paper Series on
Regional Economic Integration (Manila: Asian Development Bank, 2013),
http://www.adb.org/sites/default/files/publication/100110/reiwp-
117-economic-corridor-development.pdf.
4. Examples of prominent economic corridors include the EU corridor from
Latvia to Frankfurt and the Greater Mekong Sub-Region (GMS) transport
corridor connecting China to Vietnam, Lao, Cambodia, Myanmar, and
Thailand.
5. Kunal Sen, “Global Production Networks and Economic Corridors:
Can They Be Drivers for South Asia’s Growth and Regional Integration?”
In ADB South Asia Working Paper Series (Manila: Asian Development
222 A. PALIT
asian-ports/port-colombo/colombo-breaks-through-south-asia’s-next-
big-transshipment-port_20151020.html.
37. “India Needs to Be Part of China-Pakistan Economic Corridor,” The
Economic Times, October 10, 2015, http://economictimes.indiatimes.
com/news/politics-and-nation/india-needs-to-be-part-of-china-pakistan-
economic-corridor/articleshow/49298727.cms.
38. Anasua Basu Ray Chaudhary, Pratnashree Basu, and Mihir Bhonsale,
Driving across the South Asian Borders: The Motor Vehicle Agreement between
Bhutan, Bangladesh, India and Nepal (Delhi: Observer Research
Foundation, 2015). The SAARC members include Afghanistan, Bangladesh,
Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
39. The ASSOCHAM study estimates shipping cost of a container from India
at around US$1200 compared with US$600 from China and US$400
from Singapore. See “WTO pact or not; India has to catch up fast on trade
facilitation; costs are prohibitive: ASSOCHAM,” Assocham.org, August 26,
2014, http://assocham.org/newsdetail.php?id=4657. The ASSOCHAM
study vindicates similar conclusions drawn by other agencies. Organization
for Economic Cooperation and Development, “The Costs and Benefits of
Trade Facilitation,” Policy Brief, OECD Observer, October 2005, http://
www.oecd.org/trade/facilitation/35459690.pdf.
40. “Government Relaxes Cabotage Law for Special Vessels Like Ro-Ro,” The
Times of India, September 15, 2015, http://timesofindia.indiatimes.
com/india/Govt-relaxes-cabotage-law-for-special-vessels-like-Ro-Ro/
articleshow/48964834.cms.
41. “One Belt, One Road Not International Venture: India,” Deccan Herald,
July 21, 2015, http://www.deccanherald.com/content/490656/one-
belt-one-road-not.html.
42. Amitendu Palit, “India’s Economic and Strategic Perceptions of China’s
Maritime Silk Road Initiative,” Geopolitics 22, no. 2 (2017): 292–309.
43. “China Should Detail Maritime Silk Road Projects to Get India’s Support:
Chinese Think Tank,” The Economic Times, July 17, 2015, http://
economictimes.indiatimes.com/news/defence/china-should-detail-mari-
time-silk-road-projects-to-get-indias-support-chinese-think-tank/article-
show/48110690.cms.
44. Akilesh Pillalamarri, “Project Mausam: India’s Answer to China’s ‘Maritime
Silk Road,’” The Diplomat, September 18, 2014, http://thediplomat.
com/2014/09/project-mausam-indias-answer-to-chinas-maritime-
silk-road.
45. “India Using Strategic Projects as Bargaining Chip,” NDTV, April 10,
2015, http://www.ndtv.com/india-news/india-using-strategic-projects-
as-bargaining-chip-says-chinese-think-tank-753953.
46. “South China Sea Tensions Torpedo Asia Defense Chiefs Statement,” Channel
News Asia (CNA), November 4, 2015, http://www.channelnewsasia.com/
news/asiapacific/south-china-sea-tensions/2237348.html.
226 A. PALIT
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Index1
Colombo capabilities, 11
international container terminal development, 61, 69, 88, 97,
(CICT), 90, 216 109, 110, 116, 149, 181,
International Financial City 183, 207
(CIFC), 90, 96 engagement, 117, 147
Port City (CPC), 6, 95, 156n41, environment, 96
157n47, 157n48 growth, 6, 50, 111, 128n78,
Community of Common Destiny, 95, 149, 194n75
109, 124n31, 124n37 integration, 66, 205, 206
Conference on Interaction and objectives, 3, 85, 99n20, 203
Confidence-Building Measures Economic Cooperation Framework
in Asia (CICA), 209 Agreement (ECFA), 95
confidence building measures Egypt, 6, 215, 220
(CBM), 96 Eisenhower, Dwight, 38
counter-terrorism, 107, 112 Eurasian civilizations, 39
cross-border Eurasian hinterland, 56–9, 72
connectivity initiatives, 212 Europe, 4, 38, 40, 49, 52n8, 58,
economic corridors, 91 66, 72, 86, 108, 117, 173,
trade infrastructure, 206 174, 180, 203, 205–7, 214,
transport transit, 212 221, 222n7
CRRC Corporation Limited, 8 European Union (EU),
37, 221n4
D
Dacca, 94 F
Delhi-Hanoi Railway Link, 212 Faisal, 178, 182, 193n58
Deng, Xiaoping, 38 financial crisis, 185
Dhaka, 147, 178, 223n24 Five Principles of Peaceful
Dhivehi Qaumee Party, 182, 183 Co-existence, 174
Diego Garcia, 58 Five Year Plan, 37
Djibouti, 4, 63, 64, 150, 162n89 “Flying Geese” strategy, 66
Dongfang Electric Corporation, 181 foreign currency reserves, 7, 139
Dubai, 142, 156n41, 217 foreign direct investment (FDI)
inward (IFDI), 213
outward (OFDI), 7, 8, 87, 93,
E 213, 224n27
East Asia, 3, 33–44, 49, 51, 51n2, 58, free trade agreement (FTA), 101n48,
72, 73, 87, 88, 90, 204, 206, 109, 115, 145, 157n48, 185,
207, 210, 214, 215, 222n7 209–11
East China Normal University, 2 Fu, Quanyou, 177
e-commerce platform, 7 Fu, Xiaoqiang, 183
economic Fudan University, 113
annexation, 11, 68 Future-Oriented All-round Friendly
atmosphere, 13 and Cooperative Partnership, 184
INDEX
233
P
N Padma Bridge, 93
Nagaland, 216 Pakistan-China Economic Corridor
National Executive Committee Council (PCECC), 113
of the Republican Party, 179 Pakistani ports, 69
National Interstate and Defense Pakistan-occupied Kashmir,
Highway Act, 38 107, 118, 119
Nawabshah, 111 Pakistan-origin terrorism, 106
Nazim, 178 Palit, Amitendu, 4, 6, 9, 11, 16, 17,
Nehru, Jawaharlal, 83, 215 65, 160n73, 223n21, 225n42
Nepal, 46, 47, 52n16, 83, 101n40, Palk Strait, 137
101n48, 214, 216, 225n38 Panama Canal, 42
Netherlands, 57, 215, 221 People’s Liberation Army (PLA),
New Delhi, 46, 58, 102n50, 118, 44–6, 89, 108, 177
137–51, 155n33, 158n53, People’s Republic of China (PRC), 1,
161n83, 182 2, 34, 36, 44. See China; Chinese
New Development Bank (NDB), 147, government)
151, 174 People’s University, 176
INDEX
237
Pershing, John, 38 R
Persia, 57, 58 Rajapaksa, Mahinda, 63, 118, 142–4,
Persian Gulf, 36, 57, 58, 203 149, 156n40
Piraeus, 60 Rakhine State, 70, 71
PLA. See People’s Liberation Ramree Island, 48
Army (PLA) Rangoon port, 68
PLA Navy (PLAN), 62–4, 89, Rawalpindi, 110, 118
100n35, 177 regional
Politburo Standing Committee, economic partnership, 146
107, 174 peace, 88
political security, 82, 88, 112, 150, 176
challenges, 12, 13 stability, 82, 88, 112
consensus, 85 Regional Comprehensive Economic
disputes, 82 Partnership (RCEP), 91, 93,
dynamics, 13, 111, 120 209–11, 213, 219
goals, 3, 10–13 regional trade agreements (RTAs),
implications, 3, 111 210, 211
instability, 82, 95, 113, 116 religious conflicts, 88
issues, 12, 17, 71 renminbi (RMB), 3, 7, 174
order, 10, 13, 18, 111 resource exploitation activities, 12
political-economy Rhodes, Cecil, 36
of the Maritime Silk Road Initiative, 2 Rizhao, 69
of OBOR, 2 RMB. See renminbi (RMB)
of South Asia, 2 Rohingyas, 71
port efficiencies, 207 ROOs. See rules of origin (ROOs)
PRC. See People’s Republic Royal Navy, 63
of China (PRC) rules of origin (ROOs), 17, 209–11,
PRC-US military clash, 50 213, 222n17, 223n18
Private Power and Infrastructure Russia, 9, 35–7, 49, 66, 99n27, 118
Board (PPIB), 92 Russo-Japan struggle, 118
profit margins, 7
Progressive Party of Maldives,
182, 183 S
Prussian forces, 36 SA. See South Asia (SA)
public-private partnership, 175 SAFE. See China’s State Administrative
Punjab, 94, 110, 111, 113, 115, 149 of Foreign Exchange (SAFE)
SA-IOR. See South Asia and Indian
Ocean Region (SA-IOR)
Q sea lines of communication (SLOCs),
Qasim Port, 111 10, 58, 62, 64–6, 86, 87, 89, 90,
Qian Qichen, 176 97, 100n34, 143
Qinghai, 40, 44 Seattle, 60
238 INDEX
Security and Growth for All in the South Asia (SA), 1–18, 33, 34, 39, 69,
Region (SAGAR), 138 81–97, 108, 109, 117, 141, 145,
Seychelles, 118, 143, 149, 193n60 151, 173, 178, 203–6, 208,
Shanghai Cooperation Organization 210–12, 214, 217
(SCO), 109, 119, 208 South Asia and Indian Ocean Region
Sharif, Nawaz, 110, 113, 120 (SA-IOR), 14
Sharif, Raheel, 107 South Asian Association for Regional
Shenzhen, 156n41, 214, 215 Cooperation (SAARC), 15, 91,
Shigatze, 46 101n41, 178, 193n60, 209, 217
Shi Yinhong, 112 South Asian Free Trade Agreement
Shu Yuan, 176 (SAFTA), 91, 101n41, 210
Shwe gas pipeline, 67 South China Sea, 4, 41, 86, 89,
Shwe, Than, 67 100n34, 118, 173, 183, 189n8,
Sichuan, 48 203, 211, 219, 224n33
Sikkim, 216 Southeast Asia Treaty Organization, 83
Silk Road Economic Belt (SREB), 1, Southern Manchurian Railway, 36
2, 5, 6, 17, 19n8, 81, 82, 87, 88, South Korea, 38, 175, 210, 215
92, 97, 108, 203, 213 South Pacific, 4, 41, 86
Silk Road Fund (SRF), 5, 7, 92, Soviet Central Asian rail network, 37
110, 174 Soviet Republics, 37
Singapore, 38, 47, 48, 118, 142, Soviet Union, 36, 37, 57
156n41, 181, 182, 206, 210, special economic zones (SEZs), 5, 7,
211, 214, 215, 217, 220, 38, 144, 146, 180, 181
223n18, 223n20, 225n39 Spice Program, 97
Singapore Ports Authority, 47 SREB. See Silk Road Economic Belt
Sino-Indian (SREB)
border war, 59, 83 SRF. See Silk Road Fund (SRF)
commercial interaction, 147 Sri Lanka, 2, 5, 6, 9, 10, 12, 13, 16,
economic relationship, 12, 120 63, 65, 66, 83, 90, 91, 95, 96,
naval rivalry, 143, 155n33 101n40, 101n48, 118, 137–51,
tensions, 119 209, 220, 225n38
trade, 216 Srinagar, 83
Sino-Maldivian trade, 185 Stalinist economic model, 38
Sino-Pak economic relations, 93 Star Rafts, 176
Sino-Pakistani military relationship, 107 Strait of Hormuz, 70
Sino-US Strait of Malacca, 89. See also
conflict, 50 Malacca Strait)
cooperation, 50 string of pearls, 9, 61–5, 89, 96, 143,
Sirisena, Maithripala, 95, 144–6 147, 150, 187
Sittwe port, 212 Suez Canal, 70
Sonadia port, 60 Sui, Xinmin, 6, 15, 123n28
SLOCs. See sea lines of communication Summer Youth Olympic Games, 179
(SLOCs) Supreme Allied Commander, 38
INDEX
239