CHAPTER 5

PROSPECTS FOR INDIA

An official meeting in Xi'an, President Xi Jinping and Indian Prime Minister Narendra
Modi visited the city to discuss the history of Sino-Indian relations and continued to
exchange views on topics that represent common interest such as Sino-Indian cultural
exchange and cooperation in all fields. They also visited the temple together and recalled
the exchange and mutual learning between the two great civilizations in China and India,
as well as the history of friendly relations between the two peoples in order to encourage
bilateral friendly exchanges and give new impetus to bilateral relations.121

As a result, state-of-the-art resolution arrangements are not relevant when the guest
country violates the provisions of international investment agreements, such as
obligations which are necessary in accordance with the principles of fair and just
treatment, national treatment and the treatment of the country of their choice. In the past,
China played in particular the place of the host country. At present, however, a growing
number of Chinese investors are shifting their focus towards overseas markets -
especially the opposition background information the BRI.122

China began development ventures on its outskirts during the first period of OBOR,
shipping trains from all over Central Asia to Europe, constructing a railway deep into
Thailand and Laos, and investing in ports throughout Southeast Asia. Now before Xi's
second term, the Communist Party raised its hopes for OBOR by writing a blueprint for
the Party Constitution. That implies that OBOR will remain as a cornerstone of China's
diplomacy, officials in Beijing claim. With Xi starting his second term, the next frontier
is South Asia.

121
Ministry of Foreign Affairs Republic of China, Xi Jinping and Prime Minister Narendra Modi of India
visited Xi'an. https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/ t1264589.shtml. (accessed on
16/08/2018).
122
M.R. Dahlan, ―Dimensions of the New Belt & Road International Order: An Analysis of the Emerging
Legal Norms and a Conceptionalisation of the Regulation of Disputes‖, Beijing L. Rev., Vol. 9, No.
1, 2018, p. 87.

129
IN OUR BACKYARD

In Southern Asia, Pakistan has always been China's "all-weather" partner, but now
Beijing is expanding. China has ambitious development schemes worth billions of dollars
in growth from Nepal to Sri Lanka and Bangladesh to the Maldives. As the main source
of foreign investment and assistance in Nepal and Sri Lanka, India has already exceeded
that. This position would be improved by the building programmes. Many of these
ventures are not motivated by economic justification, economists in Beijing agree. The
reasons for their selection are strategic as evident: ports that will emerge as potential hubs
for commercial and militant Chinese ships in the Indian Ocean and pipelines that improve
energy protection for the Chinese by opening access via Pakistan to the Arab Sea and
Myanmar to the Bay of Bengal.

When Mr Xi announced the ―One Belt, One Road‖ plan in September 2013, it was clear
that Beijing needed to do something for the industries that had succeeded in building
cities, railways and roads and innovations. China state-led investment that turned into an
economic powerhouse. China had little left to build, and growth began to spike. Tom
Miller, author of ―China‘s Asian Dream: Empire Building Along the New Silk Road
―…China‘s Belt and Road initiative is starting to deliver useful infrastructure, bringing
new trade routes and better connectivity to Asia and Europe‖.

The officials identify Beijing as the top "game-changing" rail connection between China
and Nepal as a new initiative. In China, railways symbolise Beijing's involvement in
South Asia, which is soon to be a permanent one. On September 7th, this initiative
rendered a big move forward when the two countries reaffirmed that they were "a priority
project" in their discussions between Chinese Minister of International Affairs, Wang Yi,
and his fellow countryman, Krishna Bahadur Mahara, in Peking. Mahara confirmed that
an early feasibility analysis would be done.123

123
‗The Belt and Road Initiative will transcend the Marshal Plan. As early as 5 January 2009, The New
York Times tagged China‘s going global strategy as the Marshal Plan for Beijing. This rhetoric has
become more popular after the Belt and Road Initiative was proposed. As a matter of fact, the initiative,
while not being a Chinese Marshal Plan, has gone beyond the level of Marshal Plan.

130
Analysts in Beijing claim that OBOR's rise would fresh traction in such projects. The
ventures on the surface are clearly meant to fill the infrastructure deficit in South Asia.
China says it would enable its enterprises to develop new opportunities in places that are
in desperate need of infrastructure, coping with overcapacity and a recession at home.
But dig deeper, and the implications are more general. Most schemes are financed by
Chinese loans, not domestic funding. This assistance is not aid but is priced at market or
near-market prices. In developed countries, paying back loans is by no way a problem, as
is the case in many low-yield development ventures. And in cases where countries
cannot, asset portfolios always go to the Chinese lender, normally a state-owned
corporation, along with operational control.

THE SRI LANKA MODEL

In South Asia, Sri Lanka is probably the farthest to embrace Chinese infrastructure loans.
According to AidData, a research laboratory at College of William & Mary, USA, Sri
Lanka obtained $12.6 billion from Chinese support between 2000 and 2014. South Asia
is the second biggest Chinese recipient and the world's fifth largest recipient. Russia and
Pakistan, 36.6 billion dollars and 24.3 trillion dollars, were the two main beneficiaries.
Most Chinese finance in Sri Lanka has been borrowed at market rates.

The negotiations were signed just before the 2008 financial crash in the case of some
programmes. For instance, a contract was negotiated at a cost of 6.3 per cent for a new
airport in Hambantota. The Sri Lankan government seems to be deficient in
accountability and due diligence. A 10 years back, Mattala airport is a long cry from the
foreign hub planned in its home constituency by then leader Mahinda Rajapaksa. A
pristine airport, capable of carrying 1 million passengers a year, today has just one
foreign air carrier, since many airlines have scrapped plans without an order. A related
issue with low traffic is that the neighbouring Hambantota harbour, which costs $1
billion. Now Beijing owes $8billion to the Sri Lankan administration, which cannot
receive or compensate Chinese back.124

124
Ministry of External Affairs Government of India, Annual Report 1995–96, New Delhi, p.118.

131
THE NEPAL DILEMMA
The problems in Sri Lanka did not deter other countries like Nepal, owing in large part to
lack of alternatives, from pursuing China's economic help. "There are simply no other
viable options. And we badly need these projects." one senior Nepal official says. Nepal
definitely wants roads and domestic rail to promote its economical growth. Nepal needs
these projects. But the country is now seeking a national priority as a foreign cross-border
railway to Tibet.

Although the terms of loans have not yet been announced and adjust for all the ventures
China has allocated $8 billion to Nepal on roads and railways. For a long time, China's
plane-makers had the largest expenditure, though, thanks to Nepal's deference to India's
sensitivities. It was the cross-border rail scheme. This barrier was lifted when the then
PM K.P. Sharma Oli Chinese-friendly Government provided the lead in March 2016.

In a proposal to build domestic, in addition to cross-border, roads and trade areas,

beginning with the Zhangmu cross-frontier railway, Gyirong, Wang, Chinese Foreign
Minister, announced on 7 September 2014, that Nepal would also have 'one train, two
highways and three ports' for infrastructure, in addition to the cross-frontier one, in
position by China' s firms.125

Likewise, China has provided 'one route, one bridge, one lane' to the Maldives. The
amounts are modest, at least here. The biggest expenditure will be made on the single
runway to raise China's potential to 7 million passengers per year, with an extension of
Male Airport, whereby China is supposed to give some $300 million of loan – the first
contract awarded to the Indian GMR Company.

China's economic orbit has now been strongly founded in the Maldives. The Maldives
claims that China's spending would improve tourism's multiple revenues. The reality that
tourism dependency is now largely reliant on China is not being said. China is now the
main producer of Maldives overseas tourism. Beijing was able to step closer to
negotiating a free trade agreement and, in September, committed to an agreement

125
Dhrubjyoti Bhattacharjee, ―India‘s Vision on Act East Policy‖, Indian Council of World Affairs Imphal,
Manipur, 28–29 January 2016.

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allowing the Maldives, after Pakistan, the second nation to conclude an FTA with
Pakistan.

STRATEGIC RATIONALE
Privately, officials and analysts in Beijing agree that several OBOR ventures have poor
economic justification. They list China-$46 Pakistan's billion Economic Corridor
Initiative but they add that these go hand in hand with strategic concerns that have
intangible long-term advantages for China such as stabilising Pakistan's turbulent West
neighbour, links to ports for Chinese commercial and military vessels in the Indian
Ocean, or pipelines supplying alternates to China's trade and military vessels.

Planners argue that sometimes bad initiatives provide long-term advantages. In

Hambantota, for example, a Chinese corporation purchased a 70% interest in the project
because Sri Lanka was unwilling to repay its loans. But the leading Chinese economist
Zhang Yunling, who from the outset had briefed the government on OBOR, recently told
the Chinese Academy of Social Sciences that other threats were not yet thoroughly
guarded. "In Hambantota, yes there were problems, but the process of revision has
restarted, and I believe the long-term prospects are good," he said. We need to manage
the risk with the host country together. "I think we need to fully address the risks when
making investment decisions. We need to jointly share the risks with the host country."
increasing risk research and risk management mechanisms" increasing research on risks
and the risk evaluation mechanism" We need a comprehensive approach to investment
decisions.126

ALARM BELLS FOR INDIA

Inroads in China are a wake-up call for neighbourhood policies in India. These roads
"changing the balance in our immediate neighbourhood," said former Secretary for
International Affairs Shyam Saran. He continues, "We have the advantage of proximity
to and strong cultural affinity if you take those countries, and we're a huge market that is

126
I.K. Gujral, Minister of External Affairs of India, ASEAN Post Ministerial Conference, Jakarta, 20–21
July1996. http://www.asean.org/?static_post<hig>=</hig>joint-press-release-the-first-asean-india-joint-
cooperation-committee-meeting-new-delhi-14–16-november-1996

133
more accessible and nearer than China is," adds the Pontiff.127

To date, India's reaction is two-fold: forging stronger links with other regional authorities
including Japan and advocating aggressively that it should be hesitant in its acceptance of
the OBOR. First of all, India and Japan suggested the "Asia Africa Growth Corridor," an
option to OBOR. It is a welcome move if delayed, but it is far from obvious whether the
proposal is financial or worthy of executing projects in China's way. Instead of attempts
to search China on other highways, Saran warns that India's priority should be on the
neighbourhood. "We should focus on first consolidating our position in the
neighbourhood before thinking of large engagements elsewhere," he says. "We also need
to make choices of how we leverage our market as a big attraction for those neighbours.
We need to attach much higher priority to what we are doing in our own neighbourhood
because it is much more crucial for us than other theatres are concerned."

The downsides of OBOR were stressed in India. The strategy of Delhi seems to bear fruit
here. Three years later, OBOR's largely optimistic global reaction from Asia and Africa
to Europe has provided for an attitude to wait and see and a greater voicing of critiques of
the downsides of the programme, including early enthusiasts like Australia. In reality,
with China's analysers declaring India as isolated, the US and Japan were present at the
first Belt and Road Forum. It was a premature test. The position of Washington was
closer to that of India, which included arguing the opaqueness of the intentions of China
and the "debted burden" left by ventures. The US registered greater opposition in
October. Defense Minister, Jim Mattis, said "there are many belts and many roads" and
"no one nation should put itself into a position of dictating 'one belt, one road'" Then Rex
Tillerson cautioned against "predatory economics" by OBOR.

However, it would be little whether the like-minded countries will give a convincing
alternative that they make an argument against OBOR. It is far from clear. As much as,
for example, the Trump government was more assertive in confronting China in the
military, by calling for freedom of navigation in the South China Sea more aggressively,

127
Sebastian Biba, ―Desecuritisation in China Behavior Towards Its Transbound River: The Mekong river,
The Brahmaputra River and the Irytish and ILI Rivers”, Journal Contemp. China, Vol. 23, 2014,
p.p. 21–43.

134
it indicated economically removal from a trade pact that was the greatest international
initiative to date in combating China, beginning with the abandoning of the trans-Pacific
alliance. In May, US officials said they would restart their Afghanistan—a Modern Silk
Path, a strategy that Hillary Clinton initially launched in 2011 but which was generally
regarded as a futile initiative—as well as initiate a 'Indo-Pacific Economic Corridor.' This
was celebrated as a big counter for OBOR. But there has been no proof in the six months
since that that of success in either strategy as the Chinese juggernaut has pushed
forward.128

INDIA'S OPTIONS

Indeed, rather than outbid it on feasible ventures, India could draw on its strengths, says
Ashok Kantha, former ambassador to India in China until January 2016, now director of
the Institute of Chinese Studies, New Delhi. Instead of becoming an outbidder of China
on projects that may be viable or might not. Initially, India should be ready to give
neighbours non-reciprocal terms. "China does not permit open borders with Nepal or
offer its citizens national treatment or provide employment to 6 million Nepalese
nationals, as India does," he said. Indian countries will need to strengthen their
implementation record, adds Kantha, and must first motivate the Development
Cooperation Administration of the Ministry of International Affairs, with the financial
capacity and technological skills needed to review the project and ensure that it is
completed.

Kantha suggests that India should take the chance at a time when there are starting to be
questions regarding Chinese ventures. "Sri Lanka has become a cautionary tale on what
kind of problems Chinese projects can cause," he says. "Sri Lanka is obviously in
Chinese debt trap. Big ventures like the port of Hambantota and the International Airport
of Mattala have been seen to be tremendous obligations on Sri Lanka, which cannot build
income for even its running expenses, let alone pay the principal and interest on loans

128
Modi government plans venture fund to promote start-ups in Northeast, The Economics Times, 20
January 2016. http://articles.economictimes.indiatimes.com/2016–01-20

135
taken from China.129

Kantha says that it should slow thoughts in countries such as Nepal who are running
headlong into a $100 billion rail network. Nepal can, he says, question what kind of
economic involvement with Tibet will merit this kind of huge expenditure, or if the
railways will finish up like the Hambantota projects - a vanity project that will leave the
country in debt. However, considering the risks of failed projects in Sri Lanka, the pattern
of countries searching for China's funds in the region is likely to increase rather than
decrease, given their restricted funding opportunities elsewhere. They foresee an
alternative and the period now begins in India.

The Economic Factors

Three decades of production contributed to a strong demand for natural resources in
China, which connected it to Africa. But the 2008 General Financial Crisis (GFC) took
the Chinese fear of Japanese-style deflation near to reality. The jolt brought on the
Chinese leadership's rise in exports under the direction of South Asian trade with what
ex-Vice-President Li Yuanchao suggested "deep adjustment" with these countries.

(a) Global Slowdown. China's economy was negatively impacted as the top exporter of
consumer products. Beijing has also established a strategy for incorporating international
markets directly into its supply base.

(b) Over Capacity. GFC markets were unexpectedly missing in the vast industrial
manufacturing capacities produced for world consumption. At the detriment of host
countries, BRI has been expected as the way to discover new foreign pathways for
Chinese companies.130

(c) Surplus Capital. With export-led development of 3 decades, China has over 3
trillion dollars of reserves of resources. BRI gives Beijing the option of diversifying its
holdings of treasury bonds rather than the United States. It also leads to the increase in
renminbi approval, as China is the principal shareholder with many states.
129
Kawharu & L. Nottage, ―Models for Investment Treaties in the Asia–Pacific Region: An Underview”,
Ariz. Journal International & Comp. L., Vol. 34,2017, p. 461.
130
J. Mohan Malik, ―China–India Relations in the Post-Soviet Era: The Continuing Rivalry”, China
Quarterly, Vol. 142,1995,p. 317.

136
(d) China’s policy on employment even with overcapacity, any decline in employment
will have an effect on social cohesion and therefore severely undermined China's
Communist Party foundations. Via BRI, China exports not only money, but also
investment in other countries.

(e) Economic Factor. This project through which China secures the markets of its
exports as well as the natural resources required for its factories.

Source : Xinhau News Agency, China

BRI Architecture

BRI Implications

As the following subsections demonstrate the fiscal, political and geopolitical

ramifications of BRI.131

Geo-economic Implications
While the BRI constructs Beijing by 'discussion & collaboration' as a benevolent effort of
the 'share' and 'shared prosperity,' an in-depth view is given of its one-sided nature.

131
Yaduvendra Mathur, ―India‘s Look East-Act East Policy: A Bridge to the Asian Neighbourhood‖,
Symbiosis Institute of International Studies, International Relations Conference
2014. http://www.irconference.in/ assets/IRC_conference_proceedings.pdf

137
Realized by utilising huge China foreign reserves to provide loans, the Chinese Marshall
Plan has been introduced by BRI, which raises Chinese influence.

The BRI's financial tools are the first external challenge to Bretton Wood's current
financial order. In addition to IMF, World Bank and Asian Development Bank
International Monetary Fund (IMF), the Asia Infrastructure and the Silk Road Fund offer
a replacement for the financing process. In addition, the oppressive power systems are
able to seize the chance, with nominal political constraints needed for Chinese loans.

Although, as China marked 5 years after BRI, the detrimental factors have begun to come
out of the open domain for host countries in the form of a "debt trap." Beijing funded
schemes of doubtful feasibility via a cocktail of opaque loans. As debt burden rises, the
only realistic solutions are compromise for loan agencies.132

Geo-political Implications
With Peking boasting of its economic might, a powerful Chinese diplomacy threatened
the US domain. While in the South China Sea (SCS) the threat to the American
superiority of the "commons" is launched, Beijing aims to make the BRI a fact in the
IPR, by ensuring that regional commercial and thus economic priorities are matched with
the "Special characteristics of China in the new era of socialism."

The dilemma is also exacerbated by the US' retreat and bandwidth taxes. The US has
generated an IPR gap, which China is effective in using by creating a regional global
economic partnership in the Trans Pacific Partnership . The US therefore recognises the
threats presented to America's 'strength, control and ambitions' by a rising China, and
thus its 2017 National Security Strategy (NSS) represents this turnaround. "The US aims to
"boost competitives to overcome this threat, to defend the American interests and to promote
our ideals," while China "sets to displace the United States, to the IPR...to rebuild the
area in its favour".

132
Indo-Asian News Service (IANS), ―India Needs Policy to Look East, Link West: Narendra
Modi”, Deccan Herald, 25 September 2014. http://www.deccanherald.com/content/432698/india-
needs-policy-look-east.htm

138
Geo-strategic Implications
Chinese ambitions are radically modified primarily from the viewpoint of Chinese
security forces. It is increasingly being turned into a technologically sophisticated
contemporary army by the Military Revolution (MRR), controlled by broad infantry
units. The Chinese armed forces now have the mission of 'participating in territorial and
world affairs, and try to develop peace – a sign of their intention to intervene with foreign
territories, where possible.133

BRI offers the forum for Chinese powers to act abroad by extension of Chinese interests.
As a first overseas military base of China, Djibouti was already formally founded.
However, commercial ports/land bases under BRI are also strategic and can provide
clandestine forums to extend its activities for Chinese security forces. This ‗pearl
necklace‘ can be used in any controversy to protect China‘s economic interests and
increase China‘s global reach. The sea ports can be used with their strategic positions to
protect the Chinese Sea—SLOCs, while the SREB bases can have routes of alternative
land trading in 'shake points'.

China-Pakistan Economic Corridor (CPEC)

CPEC, a manifestation of the Sino-centric world order, is a banner of the BRI initiative.
While it promises to improve the fate of Pakistan's 'All-Wetter Mate, It has become a
'clear picture of the' checkbook 'of Chinese politicians.' It tries to do.

To build a 2,000-mile road from Gwadar port to Kashgar in China, take a $ 56 billion
Chinese loan to the capital of Pakistan.

The Chinese promised projects are impossible as seen in an economy because of its
present high debt and miniscule foreign investment.134 It's therefore the lens that CPEC is
executed in Beijing in Pakistan's geostrategic position. The scheme schemes are a classic
case in which China is funded, Chinese construction modell, Chinese companies and
Chinese staff are given contracts. CPEC loans will exacerbate Pakistan's debt crisis by
133
Namrata Goswami, ―Act East Policy: Northeast India as a Strategic Catalyst”, Claws Journal, Vol.
74, 2015, p. 70. http://www.claws.in/images/journals_doc/1548193442_NamrataGoswami.pdf
134
Lu, Yang, ―The Establishment of ‗Belt and Road‘ International Investment Disputes Settlement
Institution‖, Journal Law Commerce, Vol. 37, No. 1, 2019.

139
allowing China more power to pursue its geopolitical goals through their opaque financial
models. It has the capacity to meet three geopolitical targets by reducing America's
strategic room in Central and South Asia, regulating access roads between South Asia
and Central and countering India with Pakistan as its proxy.

Source : Bal Kishan Sharma & Nivedita Das Kundu, “China‟s One Belt One Road : Initiative,
Challenges and Prospects”, Vij Books India, Pvt. Ltd., New Delhi, 2016, p. 53.

CPEC Architecture18

CPEC Implications for India

(a) India, having regard to its ambiguous existence and its unequal balance with Beijing,
has resisted the CPEC since its inception.

(b) India flagged its opposition on the Chinese project "which overlooks its fundamental
sovereignty and territorial integrity concerns" this corridor passes through Indian
Territory.135

135
Lim Tai Wei, Lim Wen Xin, & Chan Henry Hing Lee, ―China‘s One belt one Road Initiative‖, Imperial
College Press, 2016, p.p. 311-326.

140
(c) The Gwadar Port could be strategically positioned toward Indian SLOCs, which
would disrupt the supply of hydrocarbons through Homruz Strait.

(d) The access by India to Afghanistan and Central Asia can be limited by China's
surveillance of Belt routes in Pakistan and by the increasing Cooperation with Iran.

(e) The equilibrium could be tilt towards Beijing, also with a futuristic containment
strategy against India, as the Chinese economic influences rise in South Asian countries.

(f) Secondly, as CPEC economically, politically and militarily integrated Pakistan and
China, any potential confrontation may be at two fronts with India.

BRI Implications for India

In view of China's opacity and unilateral influence over Beijing, China's OBOR began in
2013 and responded tenderly. However, China's unity plans have confirmed that India's
proximity to South Asia could penetrate the entire IPR through economic and national
challenges.

(a) Bangladesh. Though close ties with Delhi have been formed by the current
governing party, China's economic impact is apparent. India is making efforts to preserve
its equilibrium by officially joining OBOR in October 2016.

(b) Nepal. India is also disturbed by the recent political turmoil in Nepal. While Nepal's
weakness in the 'debt pite' has recently been seen to cancel many schemes, in New
Delhi's response to the exercise of BIMSTEC it has recently provided opposite signals.
With its ports offered by China for trade with Nepal, New Delhi aims to secure long-
lasting ties with Nepal.136

(c) Myanmar. CPEC cover the India‘s western area and CMEC will cover the Eastern
front (China Myanmar Economic Corridor). The project would include a path for China,
from Malacca Strait for hydrocarbon supply, along with an enhanced strategic position of
China on Bay of Benga. The project will provide China with a route for the hydrocarbon
supply from Malacca Strait.
136
P. Soja, ―Integration of the CLMV Countries with the Association of Southeast Asian
Nations‖, Political Quarterly International Affairs, Vol. 26, No. 4, 2017, p. 44.

141
(d) Sri Lanka. The "debt trap" in southern Sri Lanka was revealed more plainly with
the shift in the administration. Although Colombo has already escaped Scheme uses;
future remains unclear with the continuation of Chinese "chequal book diplomacy," This
is why the massive loans and the inviolable life of the project have not been reimbursed
by China. The port was leased to the British imperial powers for 99 years, a good
comparison to Hong Kong's history.

(e) Maldives. It‘s strategic importance for China. The strategic positioning of the tiny
archipelagos on the Indian Ocean at Prime SLOC renders it a big advantage. The massive
Chinese investment in a short time has eroded the years of Indian political, economic and
even military assistance.

India’s Response

Investment demands are paramount, particularly for large populations of South Asia with
a high rate of growth and weak connectivity. China is a favourable road to this
international investment with the western financial edge somewhat bogged down after
GFC. The same must, however, apply to transparent and balanced words. Therefore,
India has voiced concerns regarding the ambiguous existence of BRI with its constructive
response towards NDB, RCEP and AIIB in India, the Belt and Road Forum (BRF) was
one of very few in May 2017, with 29 Heads of States and 100 nations, including Japan
and the US. India's key opposition to the CPEC involves "the core concerns about
sovereignty and territorial integrity." New Delhi further claimed that "connectivity
initiatives must be based on international standards that are universally acknowledged:
....openness, transparency, and equality" and must "follow the financial responsibility
principles in order to avoid projects that create an unsustainable debt burden for
communities."137

As a result, India took its own measures to include commercially feasible, geographically
balanced, realistic alternatives to BRI in China. The 'Look East' strategy has been
correctly translated into the policy of 'Act East' in India. The following are steps: good

137
Ivan Lidarev, ―Is a China–India ‗Reset‘ in the Cards?‖, The Diplomat, 8 June 2018.
https://thediplomat.com/2018/06/is-a-china-india-reset-in-the-cards/

142
ties with Vietnam, introduction of trilateral highway projects, planned economic corridor
in the Mecongan Ganga, relation with BIMSTEC. As a member of the International
North South Transport Corridor, India continues the 'Go West' policy to ensure
connectivity to Central asia.25 The involvement of India in the construction of the
Chabahar port is seen as a counter Gwadar. Moreover, the AAGC (Asia Africa
Development Corridor) is being worked along by India and Japan.

India has played a strategic role in the Indian Ocean as a 'net protection service' (IOR).
The Navy is playing a vital role in 'securing the oceans,' translating its tactical ideology
into 'mission-oriented deployment.' The Indian Navy has formed close relationships with
strategic allies, through naval exercises, such as MILAN, Varuna and Malabar, organised
patrols regional allies; involvement in the KOMUODO multinational exercises in
RIMPAC; goodwill visits to international port and HADRs.

However, India's BRI responses were not so visual, as they are more scattered. Moreover,
instead of a well-calibrated approach, proactive responses were reactive. Although
comparative financial and industrial shortage in comparison with China was a significant
factor, the most critical factor is the fragmented introduction of a well-considered
programme. In comparison, the multiple choices in the developing multi polar
environment today vary from the political leaders' points of view.138

Response Strategies Available for India

After Global Financial Crisis, hostile China in military partnerships with Russia that pose
a threat to the US and politically and economically to these issues, the US has withdrawn
from the threats to preserve its dominance over global affairs. These are the three major
forces that are affecting the world today. With India's rapidly rising economy, vast
population and its peculiar geographical position, this duel will serve as a swing state and
will therefore play a important role of Global level. This presents a wide set of choices
for Indian policymakers to achieve national interest.

138
Ibid. https://thediplomat.com/2018/06/is-a-china-india-reset-in-the-cards/

143
Relation with USA

China control with colonial aspirations provides a perfect equilibrium in India's

immediate neighbourhood with immediate challenges. These obstacles are naturally in
line with America, the society in which a growing China challenges its dominance. In
order to progress India should begin to use US economic strength and global supremacy.
Moreover, US support will help to represent the needs of Indians in multilateral fora.

As the world's largest military force, the US will provide India with a geopolitical
platform to expand its sphere of control and to fight expansionism in Beijing. The ever
evolving Indo-US military ties, established in 2016 by strategic Logistics Exchange
Memorandum of Agreement (LEMOA) agreements and in September 2018 by the
COMCASA (Communications Compatibility and Security Agreement), represent the
converging security interests of the Indo-US. "India and the United States have a natural
starting point for advancing an open and open Indo-Pacific," said US Secretary of State
Mike Pompeo in two plus two dialogue. The open sea & airspace should continue to be
safeguarded; the territorial maritime conflicts should continue to be peacefully settled.139

India and United States want to balance Chinese power, the bonhomie takes it into a
strategic direct confrontation with Beijing. Beijing could use its own tools to contain
India if it recognises Washington's actions to contain China with India as a willing
collaborator. The geo-political situation in India in this case could start to change if, in
the event of any confrontation, the US does not have the expected assistance. This new
connection also creates stress on the Indian ties, especially with Russia, which have been
tested over time. For decades, Russia has been India's trust worthiest geopolitical ally and
arms provider. As the US share of Indian weapons market grew, however, the strategic
partnership between New Delhi and Moscow has been impacted. A troika from Pakistan,
China and Russia could severely jeopardise India's regional interests when the
geopolitical confrontation is worsening and India agrees to enter the US-led bloc.

139
Ivan Lidarev is a doctoral candidate at King‘s College London who specialises in China–India relations
and a former Visiting Fellow at New Delhi‘s Observer Research Foundation. His research has been
featured in The Diplomat, The National Interest, East Asia Forum and The China Brief, among other
publications.

144
Furthermore, the present US Government' s 'America First' approach has strengthened the
unpredictability of American support and enabled allies to assume greater responsibilities
for shared interests. The opposite ends of numerous global summits, especially those
surrounding trade and the climate, have been Washington and New Delhi. Moreover, the
US Administration's straightjacket strategy could potentially hurt Indian interests. US
pressure now clashes with Indian strategic sovereignty by countering America's
adversaries by sanctions laws (CAATSA). Although for India a strategic partnership is
fine, a maximum alliance will have a negative impact on the interests of India as well.140

Self-sustenance
During the Cold War, the dependence of the States is integrated and generates a dynamic
geopolitical climate in the current globalised economy. Each state needs to protect its
own self-interests, as the opposing powers engage in a multipolar environment. India will
pave the way to achieve its leading position in global relations, with its economic
development and demographic advantage. New Delhi may get the best of all worlds,
while escaping the downsides of a rigid coalition, while twisting the old stance of
nonalignment. A defence cooperation with the US may be distorted by close economic ties
with Beijing in order to monitor Chinese expansionism. Similarly, Russia's preservation as a
key weapons provider will improve 'Make in India' in developing the indigenous arms
industries with a constructive strategic partnership to Moscow.

But it is difficult to manage these contradictory ties. Indian leaders are still feeling the
heat with both sides improving their stance. Moreover, India may not have adequate
economic and material ability to fight a hegemonic China. An assertive China might
jeopardise India's regional interests without an external balance. India must establish a
large armed power to guarantee a stable atmosphere in order to maintain its current rate
of development. However a race for arms will potentially burn India's economy with the
numerical and technical advantage with Peking.

Bilateral Support Agreements

Regional juggling is the strongest gamble India allows on managing China in the big
140
Irina Ionela Pop, ―Strengths and Challenges of China‘s ‗One Belt, One Road Initiative”, CGSRS, 9
February 2016. http://www.cgsrs.org/publicationDetail.php?id<hig>=</hig>46

145
game without becoming a pawn. As China's hegemonic confirmation reigns, countries
want to pave the way without alliance for peaceful development. Indian exercise could
lead by safeguarding its national interests without joining a power bloc. India might
associate itself with Japan and Australia, with a high population and growth ability, and
its technological skills and extensive natural resources. Such a regional IPR relationship
could stabilise China enough without more problems of containment.141

This method, however, involves aggressive negotiating measures to resolve the current
blocks of roads in order to recognise crucial mutual interests. Although all of these
countries are ready to shape the "Quad," their diverse regions and close economic
alliance with China have slowed their formal development. The possible partners might
benefit from a closer economic relations and strategic cooperation with established
networks for shared opponents. They might dictate their desires to stronger forces as a
powerful economic and strategic union.

OBOR Financial Institutions and India’s Prospects

The modern financial companies have four clear explanations:

Fund for Infrastructure

In recent time many infrastructural projects are running in all over world, many studies
have defined infrastructural needs. There is a shortage of adequate funds to spend
Infrastructure as the original reasons for recent financial institutions and instruments.
According to the Asian Development Bank, for the duration from 2010 to 2020, the
cumulative need for national expenditure in infrastructure is projected at US $8.22
trillion. According to UNCTAD (2015), between 2015 and 2030, developed countries
need between $1.6 and 2.5 trillion a year. More generally, the infrastructure funding
needs are immense. The investment infrastructure deficit of up to $1.6 trillion is still
immense.142 In order to address this task, the private sector and the public sector alone
must be willing to fund such tremendous expenditure requirements and involvement of
the private sector in the core Sustainable Development Goals. There is widespread

141
Spencer Sheehan, ―The Problem With China‘s One Belt, One Road Strategy”, The Diplomat, 24 May
2017. http://thediplomat.com/2017/05/theproblemwithchinasonebeltoneroadstrategy/ed
142
S. Kim & J.W. Lee, ―Real and Financial Integration in East Asia”, Review of International Economics,
Vol. 20, 2012, p.p. 332–349.

146
scientific evidence that construction of infrastructure will improve economic prosperity
and reduce inequalities (Mwase and Yang, 2012; Straub, 2008). Their infrastructural
requirements are increasingly increasing as countries evolve at many levels from low to
medium-sized income to modern economics. In addition, there is clear evidence that an
infrastructure deficit is an obstacle to progress, such that there is a parallel connection
between infrastructure and level of development. More growth raises infrastructure
demand and infrastructure extension produces more development. A big growth aspect
would be significant demographic increases in metropolitan regions. In the next three
decades, over two billion citizens in the developed and developed world are predicted to
migrate into towns.

In terms of accessibility, it is important for facilities to improve access for the vulnerable
to public resources. Nearly 150 crores people do not have access to energy, about one
billion people do not have access to sauces and about 250 crores people do not have
access to sanitation, and a severe shortage of infrastructure. A precondition for a more
inclusive trend of development is to better provide these essential needs. To achieve these
targets, the annual infrastructural spending requires have been calculated by Bhattacharya
and Romani (2013).143 The wide initiative includes a rise from roughly US$0,8 trillion a
year (currently $1.8 to $2.3 trillion per annum per year) to contributions in the
infrastructure (excluding operations and maintenance) of developed and developed
countries by 2020. This will be a quantum leap from about three and four percent of GDP
to six and eight percent of GDP in infrastructure spending. The highest demands in Asia,
but the main demands are in Africa as a share of GDP. Energy – particularly for power,
transport and water – will be the greatest proportion of infrastructure funding. The
established IFIs could not allow adequate maintenance financing accessible -
interestingly because they were originally set up for rehabilitation and infrastructure. Of
the overall capital project funding of approx. $0.8 to $.9 trillion over 50%, about 20%
come from NDB, 25% private Institutions, and just 3% to 4% from current MDBs. Future
financing for public finance remains largely funded through domestic and private
financing if private capital – insurers, insurance firms and pension funds and sovereign

143
L. Chunhao, ―The Asia–Africa Growth Corridor: Content, Motivation and Prospects‖, China
International Studies, Vol. 69, 2018, p. 131.

147
rich funds – may be addressed in the face of fiscal and legislative barriers restricting
support for infrastructure. Surprisingly, there is no infrastructure financing supported by
established Multilateral Development Banks (MDBs). The IBRD was established initially
to fund roads, but then diverted a large portion of its financing to other focus areas.
Poverty Reduction Strategy is its over-focused emphasis on the social sectors at the
detriment of the infrastructure system as the primary instrument for offering the basis for
promoting economic growth and the reduction of poverty. In Africa, about three quarters
of the money has been invested on infrastructure finance and has been hurt by social
sectors. The balance between social sectors and infrastructure in Asia, by comparison,
was improved and contributed to development. They will achieve so by the usage of
modern and emerging financial products through co-financing policy and regulatory risk
assurances. It is anticipated that emerging financial entities will build certain instruments
more flexibly because they are not too bound to traditional financial systems and
regulations. China's OBOR reform would need new funding of at least $20 trillion.144

Sustainable Development Pathways

It is essential for sustainability that environmentally friendly and climate stability are
assured, which would need modern infrastructure. Developing countries need to expand
to boost their livelihoods and alleviate poverty. This ensures that current infrastructure
has a decreased environmental effect, adapts it to emerging circumstances and
dynamically develops modern infrastructure to facilitate healthy environmental living as
well as a larger growth paradigm. An significant initiative for fostering sustainable
growth is infrastructure investment, which facilitates the usage of green energy.

Unlike today's developing nations, in view of still storing immense quantities of

greenhouse gases in the air, Asia-Pacific10 is not willing to "grow now and clean up
later." Due to its broad scale and strong economic development in recent decades, this
area will further speed up the accumulation. While per capita emissions continue to be
high in Asia-Pacific developments, total emissions continue to increase due to various
regional factors, and deprivation needs to be resolved and livelihood levels to improve.
As As the Asia-Pacific share of developing countries increased from 23% in 1990 to
144
S. Hongyuan, ―The Indian Ocean Policy of the Modi Government”, China International Studies, Vol.
69, 2018, p. 86.

148
around 32% in 2005, 4% below the OECD share of 2005 of greenhouse gas emissions. In
view of fast economic development, continuing urbanisation, evolving lifestyles and the
consequent increased demand for energy in future the share is projected to rise rapidly. In
Indo-Pacific, the rate is forecast to be two and four percent per year from 2005 to 2030,
as opposed to an expected annual global energy demand rise of 1.5 percent. In this sense, the
country would have to take an alternate development direction utilising energy-efficient
technology, renewable energy sources and a quicker decline in carbon intensity. This can
be done not only because of the unsustainability of our common world, but also through
the ongoing detrimental impact of climate change on Asia-Patific.145

Nature disasters have struck Asia-Pacific excessively: in the past three decades 45% of
natural disasters have happened in the area. The zone has also been struck
disproportionately in financial damages, although it accounted for 25% of global GDP
and has been impacted by 42% of overall disaster economic losses. Any of the most
impacted ecological systems including glaciers, coral reefs and mangroves are also
affected as pollutants are cross-border. While some of them are natural reservoirs for the
impacts of climate change, the possibility of erosion and degradation is growing.

But the emerging world is becoming more and more conscious that they cannot evolve in
the same energy-intensive direction taken a century ago by the developed world. There is
a need for more environmental growth, and financing could also be utilised for emerging
energy-efficient technology with more focus on clean energy. This has provided for the
creation of grid connections to remote areas. Similarly, India invests heavily in green
energy - especially in solar power.146

There is no blueprint that the developing economies have to follow toward a less
energising sustainable development paradigm. These methods must be pioneered by
emerging financial organisations thus ensuring sustainable development in order to
support poverty alleviation. The key goals which must also be followed by the new
financial entities are providing access to electricity, healthcare, water and sanitation. The
United States and Canada projected that nine planets would prosper if the developing

145
G.V.C. Naidu, ―India and Southeast Asia”, World Focus, Vol. 17, 1996, p.p. 82–84.
146
Deng Xiaoping‘s ―24-Character Strategy‖, (globalsecurity.org)<https://www.globalsecurity.org/military/
world/china/24-character.htm> Accessed on 02 September 2018

149
world followed the United States and Canada's energy-intensive development paradigm.
India, China plays an important role for carbon emission if he technology transferred by
developed countries.

South-South Exchange

The latest financial entities must therefore have a larger south-south exchange. Many
current MDBs facilitate interactions between South and South but remain a limited part
of their overall strategy and side-effect. South-South trade is a crucial aspect in the
working strategies by the modern financial entities. More recent successful growth
experiences in various rapidly rising emerging markets can maintain greater importance
for developing low-income countries. Those that have quickly evolved in the new global
economic climate are more important in the escalating world than those which have
developed long before.

Information platforms must be created that allow use of these more applicable ideas and
solutions, that can be rendered more affordable by those who have recently formed,
processed to see what could be transported and made available to others in a global
solution exchange. The North-South assist paradigm developed around the highest
conditions has not performed as good as anticipated. It is well established nowadays.
Some called it "dead support" (Moyo, 2012). Although maybe the prosecution of the old
North-South aid model is too far-reaching, it is true that there is a different growth
framework. A modern form of South-South collaboration is based on a real mutually
advantageous relationship, not just the emotionally solidity of the Old South in anti-
colonialism.147

This modern South rises and shakes the existing North-South paradigm established
around a now disfigured "Washington Consensus" Yet the world doesn't want the
Washington Consensus to be substituted with a Beijing Consensus or Delhi Consensus. A
multinational exchange of concepts and opinions took place in the Modern South, is what
is required now. What's the latest South new? It accepts that not all can suit one size and
ideas for growth in several areas of the world today can be sought.

147
Xi Jinping ―Time for China to take centre stage‖, BBC News, 18 October 2017. <https://www.bbc.co.uk/
news/world-asia-china-41647872> Accessed on 02 September 2018

150
Many who evolved the most rapidly was not those who adopted the "Washington
Consensus," but those who were willing to take on their growth problems and discover
locally alternatives or take suggestions from elsewhere, but responding to local situations
in a way that is acceptable.

The modern South is therefore focused on the belief that solutions are more likely to be
identified by those that have recently evolved than in the growth process. In the
"development escalator," many applicable concepts and knowledge would be extracted
from those who evolved only a decade ago to address poverty, malnutrition and disease.
There are several emerging developments in telecommunications, electricity and IT that
have already arisen to allow developed countries to jump along the road of growth in the
twentieth century from the 19th to the 21st century. The new South is now characterised
by certain possibilities to jump.148

In the new South, construction options are far more accessible, capital-intensive and
satisfy lower income consumers' requirements. The current collaboration between South
and South is central for innovations of the 21st century, whether it be pharmaceuticals,
transport, agricultural technology, electricity, the transition of more suitable and
inexpensive solutions. We have also seen this as helping to move emerging technology
into a number of areas of the South, China, India, Brazil and South Africa. But the latest
Sorth is not a one-way switch, so it's exciting. It can go in either way. Africa has a lot to
tell others in mobile banking, for example. The emerging South also helps to split the
traditional monopolies of the North-South. For eg, telecommunications price costs have
remained nearly cents per minute in old monopoly system, exorbitantly large for much of
Africa, Asia and the Pacific. The prices plummeted when new firms in South joined the
industry with a business plan focused on the idea that a vast amount of customers were
supplied at low costs per unit. In the emerging South several new solutions are being
pioneered, such as microfinance, conditional cash flow systems and social business
models, and have been implemented with unprecedented results in the North. It is not a
single method of flowing from north to south but an interchange of thoughts and
suggestions with solutions flowing in both directions.

148
Tian Shaohui, ―Chronology of China‘s Belt and Road Initiative‖, Xinhua News Agency, 2016.
<http://www.xinhuanet.com/english/2016-06/24/c_135464233.html> Accessed on 04 September 2018

151
Improvement in International Financial Institutions

These Institutions were founded around anachronistic systems such as Bretton Woods.
North-South conditionality paradigm focused on the idea that money counts for
governance framework. However, fresh innovations, entrepreneurship and paradigms will
emerge from the newly developing South and will be definitive movers in the 21st
century with the North, already wealthy and now exhausted and debt laden. In this
modern age, concepts are more relevant than resources and strategies, and they are not
just from north to south, but even throughout the new south. This growth should not be
considered in terms of the interests of the old North and the phenomenon because
competitive New South fosters economic competition and supports the North. In the
Emerging South appears a new social model where a Hand-Shake replaces a Hand-
Out.149

The main complaint made by the current IFIs was quite high and exceeding
conditionality dependent on a standard size that matches all approaches. Such a strategy
arising from a "Washington Consensus," in particular in Africa, has been strongly
criticised. One main factor was the dismantling of state assistance to agriculture and
industry coupled with the premature liberalisation of trade that contributed to 'de-
industrialisation.' IFIs also have been criticised for the manner in which the economic
situation in East Asia was treated with when unnecessary fiscal tightening intensified the
crisis' magnitude. The opening of premature capital accounts was also a key aspect of the
IMF's guidance, which left emerging markets prone to abrupt reversals of capital
movement. Some of their dogmatic thought has already started to evolve and their
approaches have been made more versatile, which is ideally intensified in the face of
rivalry from the modern financial firms.

In comparison to the United States, the vote power at IFIs is fiscal. This structures could
be knocked down by the wealthier industrialised economies. IMF is often guided by the
President of the World Bank in the United States and the President of the Asian
Development Bank in Japan. However, with shifts in the global economic power, voting

149
Jiayi Zhou, Karl Hallding, and Guoyi Han, ―The Trouble With China‘s One Belt One Road Strategy‖,
The Diplomat, 26 June, 2015. <https://thediplomat.com/2015/06/the-trouble-with-the-chinese-marshall-
plan-strategy/> Accessed on 04 September 2018

152
shares in existing financial entities have struggled to adequately shift. More than 40% of
the votes stay in the European economy, Europe has fallen to about 25 percent of the
world economy. Their vote is proportionate to their global economic influence, did not
increase in China or other emerging economies. An agreement was achieved in theory to
amend IFIs but their development was quite sluggish.150

The Zedillo report, which was produced for World Bank changes, made several
substantial recommendations that the Bank did not implement, but should be discussed in
the formation of new financial bodies. The research opposed a resident board's new
World Bank scheme approving any credit. The Resident Board is a large burden for the
Bank (70 million dollars per year) and an external administrative layer to minimise
project preparation. - so there is a strong focus on projects which fulfil all specifications
in their single-size formats and reduce the bank performance.

Zedillo report told that, the environmental and social security are noted, but the World
Bank is already so at risk as to place undue pressures on borrowing countries by
enforcing these policies. In fact, developing countries, owing to a sluggish bureaucratic
process, have shifted away from usage of established multilateral development banks to
fund infrastructure. In Asia continent states are enthusiastic response to the AIIB
definition show their understanding of the notion that a bank can have strong protections
and stay faster and more competitive than the current banks. Without the resident council,
decision making and drafting would pick up – with greater focus on execution.

The New Financial Institutions

Emerging economies' dissatisfaction with their current financial system has marked the
concept of BRICS Bank, which now culminates in a New Development Bank (NDB).
Besides the NDB, In order to support short-term liquidity, the BRICS have agreed to
establish a Contingent Reserve Arrangement (CRA) outside the IMF. The AIIB and the
SRF are both channeling new development funding methods outside the existing IFI
scheme. While it has been suggested by the IMF and the World Bank that the new
organisations are expected to collaborate, new entities do not form part of the current IFI

150
Apoorv Pathak, ―China‘s Maritime Silk Road and Indian dilemma‖, Naval War College Journal, Vol.
27, 2015, p. 109.

153
system. Chinese and other developing countries are likely to finance new frameworks and
expand new structures as potential needs grow.151

The New Development Bank (NDB)

The Regulation on OBOR does not relate specifically to the NDB. The NDB is the choice
for a MDB move by the governments of the BRICS, the now controlled World Bank and
the International Monetary Fund (Brazm, Russie, India, China and South Africa). The
Bank is set up to facilitate expanded financial and development cooperation among five
emerging markets. In 2014, three continents, which occupied more than 1/3 land surface
of world, cover more than 3 billion people and account for more than 25% of the world's
GDP, covered the first BRIC four nations. The bank is in Shanghai, China. In comparison
to the World Bank that allocates votes to capital shares, the Current Development Bank
shall allow a vote for each participating country and no nation shall have the authority of
veto. At the BRICS Summit held in Durban, South Africa on 27 March 2013, the new
BRICS development bank was selected. The Emergency Economies group signed on 15
July, a strongly hoped document creating 100 billion dollars of emerging banks and
reserve currencies worth $100 billion in BRICS, in addition to the 6th BRICS Summit
conducted in Fortaleza, Brazil. Both would fight the impact of the currency and the
Western credit institutions. Documents have since been signed on co-operation between
BRICS and an innovation co-operation arrangement.152

The headquarters and an African regional centre in Johannesburg were chosen for
Shanghai. The first President shall be India. On 20 July 2015, the Bank officially opened
in Shanghai. At the launch ceremony, China's Minister of Finance said that "the bank will
concentrate on developed countries' needs, improve regard for the national circumstance
of developing countries and embody the ideals of developing countries more thoroughly.
It's a complex method to create. The president adding that conventional financing for
growth was also too "too rigid, inflexible, and slow".

151
Yamei, ―19th CPC National Congress – Full text of resolution on amendment to CPC Constitution‖,
Xinhua News Agency, 2017. <http://www.xinhuanet.com//english/2017-10/24/c_136702726.htm>
Accessed on 08 September 2018
152
Abraham Denmark, ―A New Era of Intensified U.S.-China Competition‖, Wilson Center, 4 January
2018. <https://www.wilsoncenter.org/blog-post/new-era-intensified-us-china-competition> Accessed on
08 September 2018

154
Development capital

OBOR project approved loans of up to US$34 billion per year for infrastructure
development. The African headquarters of the Bank will be South Africa, dubbed the
"New Development Bank Africa Regional Centre" The bank would have $50 billion in
start-up funding, which can be expanded over time to $100 billion. Initial donations of
$10 billion to the sum of $50 billion are to be rendered by Brazil, Russia, India, China
and South Africa. Under the consent of all four other members, each member cannot raise
its share of resources. New members will be entered, but the capital share of BRICS
cannot be below 55%.

Contingent Reserve Arrangement (CRA)

The CRA offers assistance to meet real or future short-term juggling payment stresses
through way of liquidity and precautionary instruments. It can invest like the IMF, just
not under an IMF deal. It will fund. The reserve seeks to safeguard against global
liquidity strains. This involves cases where participants are impacted negatively by global
financial pressures in their national currencies. In 2013, for example, the Fed's "tapering"
advertisement contributed to heavy instability in the currency markets for the developing
economy. The CRA may even provide assistance to other countries of financial volatility
after America's departure from its comprehensive monetary policy.153

Asian Infrastructure Investment Bank (AIIB)

The Foreign Financial Institution, the Asian Infrastructure Investment Bank (AiIB),
promotes infrastructure building. The Bank was launched by the Chinese Government]
and was funded as members by 78 other countries in South America, Africa, Oceania and
Europe. Some consider AIIB to be rivals with the IMF, World Bank, and ADB, which are
perceived by industrialised countries such as the United States to be dominated. For the
sake of global economic governance, the UN has deemed AIIB's introduction as a
"scaling up financing for sustainable development" In 2014 and in Beijing in October
2014 the bank was proposed by China. By PFMs since June 2015, Articles of Agreement

153
The ‗New Great Game‘: China‘s Debt-Trap Diplomacy, EFSAS – European Foundation for South Asian
Studies, October 2017. <https://www.efsas.org/publications/study-papers/the-new-great-game-chinas-
debt-trap-diplomacy/> Accessed on 12 September 2018

155
(AOA) have been finalised and available to signature. It is anticipated that the AOA will
be introduced and that AIIB will be completely implemented by late 2015. There are 57
PFMs from 15 August 2015.154

The Asian Infrastructure Investment Bank can be seen as China's fast-growth industrial
economic development system's normal foreign expansion following the Chinese
economic reforms in the 80's. The idea that the economic development of the long term is
sustained only by significant, systemic and broad public expenditure.

New Silk Road Fund (NSRF)

In addition, For the project, China has formed a new SRF institution. The China
Investment Corporation, the Export-Import Bank of China and CDB provide this new
$10 billion support to, both of which also added to the initial funds. Around 65% of the
Silk Road Fund would be taped in China's government's foreign currency reserves. In the
next step, both domestic and international buyers would be interested. The Silk Road
Fund is not state controlled and, ideally, is ultimately governed by currencies other than
Chinese yuan, but currently is funded by much of China's investors. The fund is just like
a private equity firm, although a limited number of partners has long-term investments. It
can be linked to organisations like the International Finance Corporation of the World
Bank, but it is funded not by public funds but by a few individuals. The Fund's private
equity venture arrangement can help to prevent risky, not necessarily in the best interests
of the economic interest politically oriented offer. I hope that the arrangement can
depoliticize the fund so that its managers will search at lower risk assets. China's visit to
Pakistan by President Xi Jinping is a milestone of the all-weather strategic partnership
alliance of both nations, the Chinese Silk Road Fund is launching the first investment
project on the Belt & Road initiative. South Asian nation will be able to upgrade and
boost its economic performance by investing in the Karot Hydroelectricity Project
(Pakistan) and other projects in this region155

154
George Chakko, ―CPEC & India‘s Challenge‖, Indian Defence Review, 15 March 2017.
<http://www.indiandefencereview.com/news/cpec-indias-challenge/> Accessed on 12 September 2018
155
Khanindra Ch. Das, ―The Making of One Belt, One Road and Dilemmas in South Asia‖, Vol. 53, No. 2,
SAGE Publications, China Report, 2017, p.p. 125-142.
<http://journals.sagepub.com/doi/pdf/10.1177/0009445517696624> Accessed on 12 September 2018

156
Project report

Project reports discuss the following problems through questions on OBOR. In order to
execute first OBOR-related programmes, what challenges have states, funding
organisations, donors and/or government entities and their contractors encountered so
far? Are there been any disagreements about how those projects can be implemented?
The following contributions have been obtained to resolve these concerns:

Bashar H. Malkawi and Joel Slawotsky ―National Security Review of Chinese Foreign
Direct Investment into the Cooperation Council for the Arab States of the Gulf‖: The
Opportunities' Challenges observed that, when evaluating FDI's cost-effectiveness
assessment and fair interest balance typically entail a more complicated performance in
Chinese investment into the Gulf Cooperation Council (GCC), which will impact the
conventional balance of interest: (1) the incipient competition between America and
China. Challenges and Opportunities The majority OBOR expenditure would be rendered
by Chinese state-owned enterprises, thus enhancing the opportunity for non-FDIs (as it
does for state-owned enterprises in other nations). In total, the outgoing FDI in China into
OBOR ventures in the GCC is complicated in view both of the GCC's peculiar
partnership with the US and the uniqueness of the political structure in China. The
authors deal with Chinese OBOR investments in the GCC with special relation to the
UAE's problems of national security analysis by balancing possible big economic gains -
aligned in a constructive way to the US 2021 vision - and potential issues about national
security. The topic of FDI national security analysis in China will become increasingly
relevant not only for the UAE but also for the GCC countries and dozens of other OBOR
member countries.156

The Chinese-Pakistan Economic Corridor (CPEC), which provides not only for trade and
connectivity between China and Pakistan, but also for other Asia and Ruhr sub-regions, is
a full trade and development agreement. The Chinese-Pakistan Economic Corridor is
addressed by TAN Yan and Sheraz Mian (CPEC). In improving economic and strategic
environments the CPEC may play a key role. If introduced as expected, CPEC will give

156
Nan Lwin, ―Gov‘t Signs MoU with Beijing to Build China-Myanmar Economic Corridor‖, The
Irrawaddy, 13 September 2018. <https://www.irrawaddy.com/news/burma/govt-signs-mou-beijing-
build-china-myanmar-economic-corridor.html> Accessed on 14 September 2018

157
several countries in the coming years endless incentives. Chinese main contractor is in
charge of the bulk of building programmes and subcontributes them to Pakistani
contractors. Companies in Europe must take part in the separate CPEC ventures in
addition to China. Therefore, based on the above, the authors study and analyze the
methods of exchange and investment of various CPEC enterprises. The writers analyse
the mechanism in a critical way and emphasise the trouble issues confronting the two
States because of the cultural and linguistic gaps. The writers recommend methodologies
and a way to easily settle conflicts during the project life cycle. The writers aim to allow
the OBOR initiatives in other regions pilot recommendations.

Aweis Osman observed that while Chinese investment in Africa was followed by
structured MSR interventions, East African countries, through their contributions to the
'Silk Road in China' and to the future of Afrikan Arbitration,' had and would still have to
see further Chinese investment on infrastructure, to create new commercial hubs along
MSR paths that link regions together. Infrastructure programmes covering several
jurisdictions and settlements are subject of dispute and sometimes work as a prefered
form of settlement. The Chinese government has stepped up efforts to facilitate joint
conflict settlement processes in Africa to create a Joint Arbitration Centre for China
Africa (CAJAC). Launched initially in South Africa, CAJAC aims to work with
arbitration organisations in East Africa, with a special emphasis on the MSR initiative. In
this respect, the jurisdictions for development as international arbitration secured seats
shall be Mauritius, Kenya and Rwanda. In this respect, they have made substantial
improvements. The MSR initiative definitely will begin to affect the creation, in order to
organise infrastructure transactions between the Chinese and African parties, of African
institutions of arbitration.157

Maria Bun addresses in a paper entitled "The Energy Charter Treaty and Central Asia:
Establishing an International Standard on Energy-related Disputes." Economic growth in
the region exposes numerous new legal problems related to global energy law, consumer
and sovereign interests, the energy law instruments and dispute management processes

157
Kishan S Rana, ―China‘s Belt and Road Initiative (BRI): Impact on India & its China Diplomacy‖,
Institute of Chinese studies, 2017. <http://www.icsin.org/uploads/2017/10/10/1b92c7fef95d5467b-
951f7c973bc3433.pdf> Accessed on 14 September 2018

158
applicable to the parties to the conflict. It is particular importance is the historical and
political situation of the district; the countries of Central Asia have a clean plan on which
legal principles first of all arise. While the laws and legislative structures in Central Asia
have a long tradition in other areas of the country, their Soviet origins have just recently
come to light anew. They are well positioned to introduce modern, but untested
requirements. They still face, though, the parallel threat that trading partners and adjacent
regions face from excessive political interference. A study of the position of Central
Asian states as energy suppliers in the unregulated global energy environment will
inevitably provide recommendations for fairer and more efficient governance of the
global energy sector.158

Jêdrzej Górsky addresses China's collaboration in the framework of the G16+1 forms,
which first emerged in December 2011, when China and Poland signed a strategic
partnership and official in planning the way to grow the components of the soil for the
SREB recognise as the 'OBOR,' as a contribution called 'Central and Eastern Europe.'
The author notes that the prospects of the SREB centre growth in Poland remain
uncertain by the end of 2017, as long as it is unthinkable for external authorities,
especially in the EU/Germany, for which the CEE is relevant as an industrial backland.
Besides, the Polish government's new stance on the SREB project in June 2016 was
somewhat unfounded, considering the Polish principle on the Trans-Pacific Alliance and
its heavy presence in the US-led Three Seas Initiative (Trimarium), considering
strengthening China and Poland's strategic cooperation.

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India-US 2-plus-2 dialogue: Commitment to ‗free and open‘ Indo-Pacific will send message to China
amid trade war (First post, 19 September 2018) <https://www.firstpost.com/india/india-us-2-plus-2-
dialogue-commitment-to-free-and-open-indo-pacific-will-send-message-to-china-amid-trade-war-
5134991.html> Accessed on 20 September 2018

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