China’s Belt and Road Initiative

Reference news: India to skip B&R Forum

India will be absent from China’s Belt and Road Initiative (B&RI) Forum beginning on 14th May 2017.

The Government explained that while India supported connectivity projects, they must be pursued in a manner that respects sovereignty and territorial integrity.

India has objected to the $46-billion China-Pakistan Economic Corridor part of the B&RI, as it includes projects in Pakistan-occupied Kashmir (PoK).

India also believes will lead to a debt trap in countries such as Sri Lanka and Bangladesh. India is of the opinion that the B&RI must pursue principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities; balanced ecological and environmental protection and preservation standards; transparent assessment of project costs.

China’s Belt and Road Initiative

The Belt and Road Initiative (BRI) or One Belt, One Road (OBOR) was unveiled in September and October 2013.

It is an ambitious development strategy, proposed by the Chinese President Mr. Xi Jinping.

Its main goal is to develop connectivity and cooperation among countries primarily between China and the rest of Eurasia.

It consists of two main components:

  1. the land-based “Silk Road Economic Belt” (SREB); and
  2. oceangoing “Maritime Silk Road” (MSR).

The strategy underlines China’s push to take a bigger role in global affairs.

Chinese investments related to the Belt and Road initiative have totalled $60 billion since 2013, and Beijing plans to invest $600 billion to $800 billion in the next five years.

Why is the Belt and Road initiative so important to China?

China’s One Belt One Road (OBOR) initiative is a grand Chinese vision that seeks to link production centres in China with markets and natural resource centres around the world through a China-built communications network.

Observers identify a number of overlapping goals lie behind China’s ‘Belt and Road’ campaign.

  • It is an economic plan designed to open up and create new markets for Chinese goods and technology at a time when the Chinese economy is slowing.
  • China-led financial institutions will lend money to countries willing to participate in the OBOR to create the required infrastructure. Thus, they stand to earn interest on unused capital.
  • China will deploy the surplus Chinese manpower to build the infrastructure and ensure that China’s State-owned enterprises construct them. Thus, China’s huge idle resources will generate revenue while giving a boost to the stagnating Chinese economy.
  • At the same time China’s armed forces are being upgraded and reoriented to protect Chinese investments and personnel abroad.
  • It will also help export excess cement and steel capacity by shifting factories overseas to less developed countries.
  • China also hopes that this initiative will help boost the economies of less developed border regions such as Xinjiang by linking them with neighbouring countries.
  • The Belt and Road initiative is also a geopolitical move to boost China’s global influence at a time when under President Donald Trump’s leadership, the US looks to be more inward centric. If it materialises, the OBOR will girdle the globe, and will extend China’s economic, diplomatic and military power well beyond its borders and across the world. It will place China virtually on par with the US.