Belt & Road Initiative

UPSC
H TS
ONE BELT ONE ROAD INITIATIVE/BELT AND ROAD INITIATIVE (BRI)
Mind Map:
Global response Background
What Countries
Why is India reluctant India’s
Expanse GDP
Why should India Join Stance
Funding of the Project
Population
Structural challenges
before china Mode/lines of Communication
BRI & China Geo-political
Way forward Significance for China
BRI & India Economical
Global Impact
BRI and Silk Road Diplomacy

By Silk Road, we mean the ancient trade and cultural routes between China and Central / South
Asia, Europe and Middle East.
Ÿ These routes were created during reign of Han dynasty of China between 200BC to
200AD. Revival of old routes has been one of the central pillars of China’s foreign policy
in recent years.
Ÿ The OBOR is basically a simple catchphrase for Silk Road Diplomacy only launched by
President Xi Jinping in 2013.
Ÿ Here, One Belt means the Silk Road Economic belt, a network of land corridors to be
developed by China under its “Go West policy”.
Ÿ One Road refers to the 21st century Maritime Silk Road, which would connect China’s
coastline with Southeast Asia, Gulf and Eastern coast of Africa. This includes building
maritime infrastructure throughout the Indo-pacific in the form of ports, special
economic zones etc Expanse of OBOR: The geographic expanse of OBOR reaches across
Asia, Africa, Russia, Eastern Europe and the Middle East. Experts compare the NEW SILK
ROAD expansion to the Marshall plan, the post world war II reconstruction plan. The
critical difference lies in the
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Polar Silk Road
Facts
Ÿ On January 28, 2018, China’s State Council Information Office released a white paper
detailing the country’s official Arctic policy for the first time.
Ÿ The document plotted the course for future Chinese development goals in the
region—including scientific, commercial, environmental preservation, and resource
extraction efforts—and
aligned Chinese Arctic
interests with the Belt
and Road Initiative.
Ÿ Chinese companies are
encouraged to invest in
building infrastructure
along the routes and
conduct commercial trial
voyages to gauge
feasibility.
Ÿ In 2017, the research
vessel Xue Long became
the first Chinese ship to
navigate the three major
Arctic shipping routes:
The Northwest Passage,
Northeast Passage, and
Transpolar SeaRoute.
Ÿ The white paper
emphasizes “peaceful
utilization” of the Arctic
and supports settlement
of territorial and
maritime rights disputes
under established
multinational treaties
s u c h a s t h e U n i te d
Nations Convention on
the Law of the Sea
(UNCLOS).
Ÿ While Chinese borders do
not extend to the Arctic, China is one of 13 “observers” to the Arctic Council and has become
increasingly active in the region. It obtained permanent observer status in 2013 after five
years of courting member states and two failed attempts. Observership accorded China the
ability to attend all council meetings and participate in workshops.
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Expanse of OBOR:
The geographic expanse of OBOR reaches across Asia, Africa, Russia, Eastern Europe and the
Middle East. Experts compare the NEW SILK ROAD expansion to the Marshall plan, the post
world war II reconstruction plan. The critical difference lies in the financing: Whereas foreign aid
and direct investment funded the Marshall plan China’s OBOR depends on the loans extended to
the developing countries. It covers about 65% of the world population, 60% of the world GDP and
over 70 countries in six economic corridors.
Ÿ CPEC is also a part of this belt and various projects under it will connect China with Asia,
Africa, the Middle East and Europe.
The CPEC is a 15-year project between Pakistan and China, which aims to connect the ancient Chinese
trading town Kashgar with Pakistan’s deep-sea Gwadar port via PoK (Pakistan occupied Kashmir)
through a network of highways, railways and oil and gas
pipelines and fibre optic cables. The project runs about
3000 Km . China and Pakistan had signed more than 50
agreements in April 2015 on various fields including
agriculture, education, power generation, infrastructure
projects, telecommunication etc. Out of these, around
30 agreements are related to the Economic Corridor
named China-Pakistan Economic Corridor (CPEC). In
November 2015, this corridor has been kicked off. It
would give China direct access to the waters of Indian
Ocean and beyond. Prior to this, the two countries had
released a so called “Karamay Declaration” in August
2015, which stressed their resolve to develop the
economic corridors with joint cooperation for economic
prosperity and better future.
5 1320MW
Thar power Coal Plant to be CHINA
completed in 2017 by
Sino-Sindh Sources. Budget: $1.9bn
6 3.8 MT/A
Coal mining project at
Thar Block II, to be completed
in 2017 by Govt. of Sindh,
POK
Engro Powergen Budget: $900M
7 900MW
Solar Power park at AFGANISTAN PESHAWAR
1 Gwadar International Airport Bawalpur to be competed in
Will be able to accommodate march 2016 by Zo Energy.
A38Ds and B777S. To Start Budget: $1.9bn
operation in June 2015 & 1320MW
8
Finish in 2017. Coal-based project at
Budget $230m Muzaffargarh Budget: $1.9bn
2 Gwadar Port and Free Zone 9 1320MW
Huge deepening and Coal-based project at Sahiwal
expansion of port, including To be completed in 2017 by
2000 acres for a free zone.
To be completed in 2016-17
Shandong Royi group,
Huaneng Shandong power
PAKISTAN
Budget : $500m Generation, Budget: $1.6bn
3 1320 MW
Coal-based power Project at
10 720MW
Karot hydropower project
INDIA
Port Qasim by power China, To be completed by 2020 by
Sinohydro and Al-Mirqab China International water and
Qatar Budget: $1.86bn Electric Corpration
4 6.5 MT/A 870MW
Coal mining project in Suki Inari hydropower
Thar block in 2017 by To be completed by 2020 by
Sino-Sindh Sources. ChinaZexhouba Group
Budget: $1.3bn Budget: $1.8bn

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The significance of BRI for China: Lines of Communication to be used in
OBOR: OBOR vision included creating a
1. Geo-political significance vast network of railways, energy
Ÿ It makes China an important pipelines, highways, and streamlined
maritime power in the South border crossings, both
China Sea and the Indian Ocean westward—through the mountainous
and its littoral countries. former Soviet republics—and
Ÿ Development of Western southward, to Pakistan, India, and the
Provinces: It will develop poorer rest of Southeast Asia.
western provinces of China,
particularly Xinjiang. Xinjiang has
had ethnic tensions and is
considered to be a vulnerable area
for China. The Chinese
government made Xinjiang Uighur
Autonomous Region as ‘Core zone
of Silk Road Economic belt’. The
government has been providing
incentives to attract
manufacturers and real estate • Railway Diplomacy (Part of BRI)
developers.
Ÿ Creation of an energy route
between the Middle East and
Africa will act as a safety valve
against any possible prohibition
at points like Hormuz and the
Malacca Strait.securing long-
term energy supplies from
Central Asia and the Middle East, The Yiwu-Madrid railway is the longest rail link in the
world. It spreads across 13,000-kilometers through
especially via routes the U.S. France, Germany, Poland, Belarus, Russia, and
military cannot disrupt. Kazakhstan. Along the way, the train transfers three
Ÿ It will enable China to compete times due to different track gauges in China, Europe,
with Transatlantic Trade and and Russia.
The Yiwu – London Railway Line is a freight railway
Investment Partnership (TTIP) route from Yiwu, China, to London, United Kingdom,
and Trans-Pacific Partnership covering a distance of roughly 12,000 km (7,500 miles).
(TPP) or any other future This makes it the second longest railway freight route in
the world after the Yiwu-Madrid railway line, which
m e c h a n i s m s t h a t a i m a t spans 12,874 km (8,000 miles). It is one of several long-
establishing new trading norms. distance freight railway routes from China to Europe on
Ÿ Counter the efforts of western the "New Eurasian Land Bridge" and part of establishing
powers such as US in Asia Pacific a modern-day Silk Road.
and display its might in Indian Ocean.ForChinai, the BRI serves as pushback
against the much-touted U.S. “pivot to Asia,”.
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2. Economic Significance
Ÿ Creates opportunities for China to develop new investment opportunities,
cultivate export markets, and boost
Chinese incomes and domestic
consumption. To restructure the
economy to avoid the so-called
Middle-income trap.
Ÿ Development of railways, ports,
pipelines, and highways across Asia
and the Indian Ocean will help China
utilize its excess capacity in steel, cement, and infrastructural engineering. This
will result in the development of its manufacturing sector further.
Ÿ It promotes China-led financial institutions such as the Asian Infrastructure
Investment Bank (AIIB).
Ÿ Transportation links provide better access to rich European markets and boost trade.
What’s good about this initiative- Global Impact?
Ÿ South Asia is the least integrated region in
the world, and that is not in line with global
trends. The new initiative aims to integrate
the region.
Ÿ New infrastructure could “break the
bottleneck in Asian connectivity,”. The Asian
Development Bank estimates that the
region faces a yearly infrastructure financing shortfall of nearly $800 billion.
Ÿ The Initiative, seen more as a policy indicator than a set of projects, will link three
continents – Asia, Europe and Africa.
Ÿ China has cash and deposits in Renminbi equivalent to USD 21 trillion, or two
times its GDP, and expects that the massive overseas investment in the OROB will
speed-up the internationalization of the Renminbi.
Global Response:
1. U.S: The United States has shared other countries’ concerns about China’s
perceived intentions. At the 2018 Asia-
Pacific Economic Cooperation (APEC)
summit, U.S. Vice President Mike Pence told
regional leaders that the United States
doesn’t “offer a constricting belt or a one-
way road.”
Ÿ The passage of the BUILD Act was a
critical step in responding to the economic
appeal of Belt and Road.
2. Japan: Tokyo has maintained a similar strategy, balancing increasing interest in
regional infrastructure development with longstanding suspicions about China’s
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intentions. In 2016, Japan committed to spending $110 billion on infrastructure
projects throughout Asia. Japan has, with India, also agreed to develop the Asia-
Africa Growth Corridor (AAGC), a plan to develop and connect ports from
Myanmar to East Africa.
3. Europe: Some European countries are torn between traditional ties to the
United States and the economic opportunities that the BRI presents. Several
countries in Central and Eastern Europe have accepted BRI financing for their
own infrastructure shortfalls.
4. Russia: Moscow has become one of the BRI’s most enthusiastic partners, though
it responded to Xi’s announcement at first with reticence, worried that Beijing’s
plans would outshine Moscow’s vision for a “Eurasian Economic Union” and
impinge on its traditional sphere of influence.
India’s stance
1. India has opposed the BRI and did not attend the 2017 BRI Summit held in Beijing.
2. It mentioned issues of sovereignty, transparency and unilateral decision making.
“India has tried to convince local countries that the BRI is a plan to dominate Asia,
warning of what some analysts have called a “String of Pearls” geoeconomic strategy
whereby China creates unsustainable debt burdens for its Indian Ocean neighbors and
potentially takes control of regional choke points.”
Why is India reluctant in joining the initiative?

A. China-Pakistan Economic Corridor (CPEC)
1. CPEC is a flagship programme of the BRI and the main reason for India opposition to the
initiative.
2. CPEC passes through Pakistan-Occupied Kashmir (Gilgit-Baltistan) which is a disputed
territory between India and Pakistan.Thus CPEC undermines India’s strategic interests
and territorial integrity.
3. More importantly, with CPEC, China will get access to the western Indian Ocean through
Gwadar port. This will help China in controlling maritime trade and would affect the
freedom of navigation and trade-energy security of India.
B. Unilateral Decision
1. India has alleged that China has taken unilateral decisions. There has been a lack of
consultations with India before the launch of BRI.
C. Concern over China’s expanding presence in neighbouring countries and
the Indian Ocean
1. China’s port development projects in the Indian Ocean raises security concerns for
India.
2. Increasing Chinese presence in Nepal, Pakistan, Sri Lanka, and Myanmar has raised
concerns for India. For India, BRI seems driven by large geopolitical aims.
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3. China has always hidden its military plans under the cover of economic projects and
India has been always vary of its string of pearls.
String of Pearls
String of Pearls refers to a network of ports which China is building from its eastern
coast to the West Asia. China is investing in construction of ports, which in future can
be converted into China’s naval bases. India is suspicious
that China’s String of Pearls is aimed at encircling and
containing India. Most of the Indian oil imports are
transported through Strait of Hormuz. The Gwadar port
of Pakistan is located near Strait of Hormuz. As part of
CPEC project, China is developing the Gwadar port as a
commercial port but in future it may be converted as a naval base. This would lead to
maritime competition in the Indian Ocean and threatens India’s energy security.
D. Transparency issues
1. India has highlighted the importance of openness and transparency
2. According to India, mutual agreements on infrastructure projects should be
transparent and debt repayments should be made easier for recipient countries
Ÿ Why should India join BRI?
1. Economic benefits: Boost to trade, investment, and business engagement
2. Geo-politics:
Ÿ It provides direct access to Afghanistan and Central Asia.
Ÿ Improve Indo-China ties; India and China may cooperate at many global fronts.
Ÿ All neighboring countries (except Bhutan) and other countries from South-East Asia,
Central Asia has joined BRI. Thus, not joining BRI
may lead to the isolation of India.
Ÿ Many geopolitical issues and differences can be
resolved through economic integration.
3. Energy: BRI is expected to normalize India-
Pakistan ties. This would remove the obstacles
to the implementation of two major energy
cooperation projects: the Iran-Pakistan-India
gas pipeline and the Turkmenistan-Afghanistan-
Pakistan-India (TAPI) gas pipeline. This is crucial
for India’s energy security.
4. Security: Development in Gilgit- Baltistan area would help to curb security
threats
Ÿ Structural challenges that confront the Chinese OBOR initiative:
Ÿ First, the perception, process and implementation to date do not inspire trust in
OBOR as a participatory and collaborative venture. The unilateral ideation and
declaration — and the simultaneous lack of transparency — further weaken
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any sincerity towards an Asian entity and economic unity. However, China says
that it is committed to pursue wide-ranging consultations with the 60-plus
nations on this issue.
Ÿ It is widely accepted that through this initiative China is projecting its military and
political presence along OBOR. China is also willing to underwrite security
through a collaborative framework. Hence, few countries including India have
wholeheartedly not welcomed this initiative.
Ÿ Another challenge deals with the success of the ‘whole’ scheme, given that the
Chinese vision document lays out five layers of connectivity: policy, physical,
economic, financial and human. While no developing country will turn away
infrastructure development opportunities financed by the Chinese, they may
not necessarily welcome a rules regime built on a Chinese ethos
Ÿ This belt runs through Pakistan-occupied Kashmir. Hence, a formal nod to the
project will serve as a de-facto legitimisation to Pakistan’s rights on Pakistan-
occupied Kashmir and Gilgit-Baltistan under the China-Pakistan Economic
Corridor (CPEC) that is closely related to OBOR.
Ÿ In August 2018, Malaysian Prime Minister Mahathir Mohamad cancelled the
East Coast Rail Link (ECRL) and the Trans-Sabah Gas Pipeline (TSGP) projects,
which were part of China’s OBOR initiative, saying his country’s top priority was
to minimize its debt and loans.
A report by the Center for Global Development, which notes that eight BRI
countries are vulnerable to debt crises. Five of the eight border China, and two
more—Djibouti and the Maldives—are choke points on the Maritime Silk Road.
Way Forward:
A. China & OROB:
China is also aware that it is investing in a risky environment and that the OROB initiative
may not be commercially rewarding. China has a three-fold solution to these problems:
Ÿ First, it invites governments to organize summits to identify issues and seek
common understandings, cooperation memorandum and people-to–people
contact as the basis for regional cooperation.
Ÿ Second, China is also organizing technical workshops of the concerned
countries to facilitate investments and is partnering with multilateral
institutions in this effort to give greater legitimacy. It is entering into areas the
United Nations and bilaterals have ignored but have been considered
important by developing countries. For example, a workshop to harmonize
intellectual property rights legislation was organized in Beijing in July, jointly
with the World Intellectual Property Organization.
Ÿ Third, China is using money to resolve security issues, like paying Pakistan for an army
division dedicated to the protection of Gwadar and is actively considering setting up a
private security agency, borrowing ideas from something the United States has done
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for decades, but paid for by the companies rather than the government.
B. India & OROB:
India is at a defining movement on how the Asian Century will be shaped. The
strategic question is whether Asia will have two poles, as it has had throughout
history, or will India remain at Asia’s periphery as a regional power?
Ÿ It is being seen as both a threat and an opportunity. To be firm while
responding to one facet, while making use of the opportunities that become
available from the other, will largely depend on the institutional agency and
strategic imagination India is able to bring to the table.
Ÿ China is keen to have India on board and both recognize that working together
is necessary for achieving the ‘Asian Century’. India should seek to ‘redefine’
OROB to add a strong component for a ‘Digital Asia’, as that is where our
comparative advantage lies, and for Asian connectivity to have two nodes, in
China and in India, as has been the case throughout history.
IMPORTANT QUESTION FOR MAINS
Question: The concept of Asian century parallels the realization of New world
order dominated by Asian economics and politics. Explain how coming together
of India and china on ONE BELT ONE ROAD can bring a NEW WORLD ORDER?

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Belt & Road Initiative

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UPSC

BRI and Silk Road Diplomacy

Telegram -https://t.me/ChangeIASPrelims website- www.changeias.com 0120-4299141, 9773881981,

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Why is India reluctant in joining the initiative?

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