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C3S Dialogue: Perils of BRI

Image courtesy: vagabondjourney.com

Article No. 17/2019

The second Belt and Road Initiative (BRI) Summit is scheduled from 25-27th April in Beijing. A lot of attention is being given to the BRI to make it a success as it is very close to Xi Jinping’s heart and no stone is being left unturned to make it a mega event. While the summit will definitely be used to showcase BRI as a project that will benefit the comity of the nation, there are ground realities that have alarmed many observers and the recipient nations due to the nature of investments which have the potential to lead the developing countries into debt traps. Sri Lanka , Maldives and many smaller African countries are reeling under the debt burden to service loan interests. Even Pakistan which is the largest recipient of investments is feeling the heat and has run to IMF for seeking loans to be used for repaying China’s loans.

While China has a good track record in its support for clean energy within its borders, its investment in coal-fired thermal plants is a cause of concern as it is exporting coal-based technology which is extremely harmful to the environment. India on its part has again decided to not participate in the summit as in 2017 quoting the unilateral and opaque nature of transactions under BRI. More importantly, India has reservations about the infringement of sovereignty clauses as China has invested heavily in Indian territory under occupation of Pakistan. So China PoK Economic Corridor (CPoKEC) continues to be a source of discontent with China. What is also clear is that many countries are now reevaluating the investments of China and loans more cautiously with the experience of Sri Lanka which has lost its control of Hambantota for 99 years . It is possible that the Chinese will modify some of the clauses of BRI to make it more attractive and also to allay the fears of destination countries . There are again no doubts that Xi will use everything in his means to ensure that the impediments to the success of his pet project are removed .

On the eve of BRI summit, C3S has put together some of the recent discussion amongst members of C3S who have debated both the pros and cons of BRI specific to India. The same is available below for information.

– Cmde. R. S. Vasan IN (Retd.)- Director, C3S

The following is text of a virtual dialogue conducted by C3S members from April 4-5 2019. The theme revolved the article, “Perils of China’s ‘Belt and Road’ initiative”, The Hindu BusinessLine, April 3 2019. The views expressed are the members’ own.

Shri B.S. Raghavan IAS (Retd)- Former Policy Advisor to UN (FAO), Chief Secretary, State Governments of West Bengal and Tripura, Secretary to the Ministry of Food and Agriculture, Government of India; Patron, C3S

Having said all that has been said about and against the Belt and Road Initiative (BRI), China’s outreach, which it is bent on making it a success, what next? What does India do? Where does it go? Does it lie down in BRI’s path and display complete opposition? Does it outdo China with its own brand of BRI? When a proposition is hit at, a counter-proposition must also be advanced: What is it? Otherwise the thousands of articles written to tear BRI to shreds are a waste of time, energy, reams of paper and the trees destroyed to produce them.

Mr. K. Subramanian- Former Joint Secretary (Retd.), Ministry of Finance, Government of India; Treasurer, C3S

As one sees it, BRI is one of the most ambitious projects ever undertaken in human history and, by the same token, it cannot all be good or bad. It is promoted by China and it is not charity. No aid program has ever been charity when undertaken by governments. It is a mix of China’s objectives ranging from economic to strategic and is intended to serve China’s rise in the world. On date, it encompasses 128 countries ranging from Asia, Africa, Central Asia, Europe and stretches to Latin America and the Pacific islands.

This is a part of China’s global strategy to promote and safeguard its interests. If any country wishes to take part in the endeavour, each country has to assess how it stands to benefit by such participation. It is not one sided and China respects the sovereignty of member countries. This tradition or record is respected in Africa where China commenced its aid programs in the 1950s. Another feature is that the BRI projects are not fixed in stone and are liable for change depending upon the local climate or circumstances. It has also been observed that China is flexible and willing to make changes. It has met with some reverses or resistance in some countries such as Malaysia, Pakistan, Myanmar, etc. and is renegotiating the projects, thus showing resilience of BRI (vide “Reports of Belt and Road Projects are greatly exaggerated”, Foreign Affairs, January 2019 issue).

China is making energetic diplomatic efforts to promote BRI and is reaching a measure of success. It has been able to isolate the US (vide “US becoming ‘lone ranger’ containing China”, Asia Times, March 29 2019).

Even in the ranks of U.N., China has been able to promote BRI and the U.S stands aside despite the latest efforts of Mr. Bolton to outfit China (vide “Bolton Builds Anti-China Campaign at the U.N.”, Foreign Policy, April 3 2019). As this report says, “The White House faces an uphill task to overcome road support for the Belt and Road Initiative at the United Nations where the UN Secretary General and heads of UN agencies view the Chinese infrastructure project as a vital piece of its own effort to scale back poverty in developing world.”

If this is the view of a large number of U.N. Members and agencies, the BRI projects cannot all be evil and dangerous. Some of India’s piques with China should be left aside and it must be seen whether Delhi can partake on terms acceptable to India without offending its own sovereign rights. If remembered right, China did make such an offer when India began objecting to BRI. India did not respond.

Shri B.S. Raghavan

@ K.Subramanian: One agrees word for word, and adds that instead of spending time in picking holes in what China does, there must be focus on plugging the holes in India’s own record after Independence, by outperforming China in economy, technology, indigenization, space, military might and execution of projects. An appeal to the Young Minds: develop a passion to outperform, and take India ahead of every country. India, China, Japan, South Korea, Singapore, and Taiwan — all started their journeys at about the same time after the Second World War. Japan was in a decimated state. Look where they all are, and where India is. Intriguingly, the economic parameters of Taiwan in size and population less than that of Kerala. One must get angry about all these matters, without worrying about whose eye to poke next.

Col. R. Hariharan, VSM- Retired Officer of Intelligence Corps, India

One agrees with K. Subramanian. No country, particularly China, promotes such a huge project without strategic objective to serve its national interest. So let there be focus on cleaning up India’s own act and keeping the country’s own national interest in mind when dealing with China. Shri B. S. Raghavan has given the right motivation to young minds. Time they took charge of the country and not leave it wholly to gerontocracy.

Mr. T. S. Krishnamoorthy- Former Head, Analytical Chemistry, Bhaba Atomic Research Center (B.A.R.C)

BRI is here to stay. It will go on, regardless of support or opposition. China will ultimately use it as a strategic advantage. Taken to gather, the road and maritime projects will result in encircling India, and will act as a pincer. Rather than wasting time poking holes in BRI, India should be concentrating on how to take care of its own interests.

K. Subramanian’s observation, “We should leave aside some our piques with China and see whether we can partake on terms acceptable to us without offending our sovereign rights. If I remember right, China did make such an offer when we began objecting to BRI. We did not respond.” needs attention. The question is how to do it?

Mr. K. Subramanian

One finds it difficult to go along with the suggestion that when India raised reservations over BRI, China did not indicate its willingness to negotiate on the POK issue. Beijing did but Delhi did not react. In diplomatic exchanges it is not the practice to go to town and make offers in public. A nod is as good as a wink. If by chance India had indicated our willingness to negotiate, the developments could have been different. Given the kind of influence China has over Pakistan, it would not have been an issue to work with Pakistan to renegotiate (redraw) the project. In many countries which are neighbours, there are at times boundary or sovereignty issues over some territory. These have not prevented their entering into agreements for trade, project, etc. Japan-China relations in recent years are a classic example, Senkaku notwithstanding!

Mr. Subramanyam Sridharan- Former Computer Scientist Retired from Leading MNC

There are two aspects that should not be confused. One, our desire to emulate China and equal or outdo it in achieving what all it has achieved. Two, how the ‘peaceful or the not-so-peaceful rise of China’ affects India geostrategically and what should be done about it. One would elaborate on what is being done in the second realm:

1. India was the first nation to recognize the disingenuity in the BRI approach by China. India refused to recognize the CPoKEC and warned China that it was treading on Indian grounds, literally. China pleaded with India, offered to change the name CPEC to suit Delhi’s sensibilities, and implored India to attend the first BRI Forum two years back. Even Pakistan objected to China. There was even some sort of a groundswell from predictable quarters in India to force the government to change the tough stance. The Government of India did not. India said a few things for China’s BRI to be acceptable: Firstly, the part of BRI known as CPEC must not go through POK. Secondly, the projects must not be simply thrust on any nation and must be selected in consultation with the recipient country. Thirdly, there must be complete transparency in the transactions, terms & conditions, and fourthly, international norms of aid/loans/funding/project implementation must be followed. All these were anathema to China. All these concerns have come true now. One thinks this is what Shri K. Subramanian is referring to as “China’s offer and our non-acceptance”.

2. If China wants to go ahead with its BRI, there is nothing India can do to stop it. India is currently not in the same league as China to challenge it that way. The Thucydides Trap of a dominant power feeling threatened by an upcoming potential challenger works between the U.S and China. India is a fringe but interested player. However, Delhi is also being drawn into the arena because China is the number one enemy and is continuing to undermine India directly and also through its proxy, Pakistan. However, in the case of India, there is a Reverse Thucydides Trap as China does not want Delhi to be a potential challenger in the future and wants to take care of India as early as possible in the Trap cycle, which perhaps the US failed to do vis-à-vis China. So, China is playing the Trap both ways.

3. India should continue to resist becoming part of BRI at any time unless the parameters change diametrically. One has always felt that BRI’s big success would not come unless and until China can successfully incorporate India into it. That is the reason China blew hot and cold whenever India resisted BRI. Among other things, Wuhan was also to impress upon India the benefits that would flow from accepting BRI. India tackled that superbly. The Wuhan spirit has since dissipated as China realized that India would not budge. That was very obvious in the latest Masood Azhar episode when several commentators hinted at a ‘transactional approach’ to resolving that issue.

4. India’s sphere of influence, extending from Africa to East Asia, is being undermined by China through the BRI and we must protect ourselves. Some of the erosion of our influence is natural as China rises and some of it is deliberate by China. Even when it is natural, the ‘deliberate’ is part and parcel of that. It is that India has to guard against, which it is doing vigorously, IMHO. Whether it is Myanmar, Nepal, Bangladesh, Sri Lanka, Maldives, Seychelles, Bhutan or Afghanistan, India has acted to lessen the growing Chinese influence. Barack Obama was very annoyed during his address to Indian Parliament (as far back as c. 2010) that India was hobnobbing with the military junta in Myanmar because just a few months earlier to Obama’s visit, the Myanmarese military junta leader Than Shwe was invited by us. India explained the Chinese imperatives and Indian compulsions to Obama and continued to engage the junta. One  would not have been surprised if India had played a hand in the defeats of China-enamoured Presidents, Rajapakse in Sri Lanka and Abdullah Yameen Gayoom in the Maldives. So also in Nepal. In Bhutan, India went to Thimpu’s side at Doka La in spite of enormous threats and abuses from Chinese Ministers, bureaucrats and media and a real possibility of a skirmish, if not a war, breaking out. So, India is determined to protect its backyard even though it has lost some ground.

5. Does it [India] outdo China with its own brand of BRI? That is not even possible. India’s manufacturing and infrastructure are dismal. The country’s services sector (IT, ITES, BFSI) is our best bet. This is where the nation’s neglect of skills development impacts us badly. The transformation of Narasimha Rao’s Look East policy into Modi’s Act East policy is not only to expand India’s geo-economic interests far afield but also to take it to the lion’s den – South China Sea (aka Indo-China Sea), East China Sea as well as Yellow Sea –  as a counter measure to inevitable Chinese expansion into Indian Ocean Region (IOR). India has a robust defence relationship with Vietnam. India has access to a naval base in Changi in Singapore and has started developing along with Indonesia, the strategic port at Sabang in Banda Aceh. There are extensive military and political engagement between India and Japan and even if we are ‘coy’ about the Quad, it nevertheless exists and we are unmistakably present in it. Our Project Mausam is no match for China’s Maritime Silk road but it is conceived as such. As usual, our speed of implementation always leaves a lot to be desired. China has certain advantages that way, undeniably. To protect our interests in the traditional sphere of Africa, India joined with Japan to announce the Asia-Africa Growth Corridor (AAGC) though it is moving painfully slowly, if at all. Similarly, our efforts in BCIM are not exactly moving at lightning speed.

6. Does it [India] lie down in BRI’s path and say “Over my dead body”? One does not think so. One does not view India is as such opposed to BRI. It is China’s business and the business of the countries which fall for the ‘allurements’. For example, Ecuador, Venezuela and Greece do not even bother us; there are others to worry about them.  With our limited resources, we protect only our immediate interests. However, we need to constantly highlight all the pitfalls and sufferings of those nations which are being drawn into a debt-trap purely for China’s strategic interests even as we more vigorously defend our immediate sphere of influence. While the Indian media, except left-leaning ones, have been highlighting the BRI issues all over the world, GoI also has to bring up these issues with friendly countries in bilateral and/or 2+2 Dialogues to develop a world opinion. It is only a concerted world opinion and a phalanx of opposition to its devious propositions that could force China to change its strategy, if at all. Today, these are happening in bits and pieces and randomly all over and China handles them easily. For example, China wants to tackle the issues of Indo-China Sea (ICS) individually while the ASEAN wants to treat it en-block (for example the Code of Conduct or CoC). From early Independence, India has taken pride in standing up for oppressed and colonized nations. The opposition to this Chinese neo-colonism cannot therefore be opposed within India by political parties, intellectuals and media. However, all this does not mean that we adopt a confrontational approach with China. Just as China exploited and further developed Pakistan as our foe, just as it continues to oppose us in NSG and other world bodies, just as it opposes Masood Azhar’s designation and yet professes friendship with us and does immense trade with us, we should do likewise.

7. On the whole, the policies adopted by GoI appear to be in the right direction. The over-cautiousness of decision making (which has changed lately) and our project implementation leave a lot to be desired. India needs to be nimble-footed. It needs to expand the strength of its diplomatic corps. For a country of such size, it is too small.

Cmde. R. S. Vasan IN (Retd.)- Director, C3S

@ K. Subramanian: One respectfully disagrees with such line of thinking.  China acted unilaterally and never bothered to consult India (on the BRI) or even nodded or winked as suggested. There is nothing anywhere to suggest that India was consulted and India has said so in public in its official responses while abstaining from the BRI summit.  China initiated this unilaterally to serve its long term strategic and economic interests.  Connecting Gwadar through CPokEC and working at many levels to overcome the Malacca dilemma along with market expansion from Asia to Africa to Europe was a given. India a competitor in some ways to China and it cared two hoots to what our concerns were. One wants to know where it has shown its concerns with respect to any of its neighbours. The CoC is still to be implemented. Every littoral in SCS is angry with the actions of China and are not in a position to do anything about it. So this generous concessions being given to China’s behaviour vis-a-vis India is baffling.

Mr. Rajaram Muthukrishnan- Investor and Director, Voice Snap Services Pvt. Ltd, Chennai

One would submit that the Indian position with regard to BRI is neither held captive by old fossilized logic and timid world view of our officialdom of the past nor is it based on some illogical emotional antipathy towards China.

The BRI, as it is conceived and positioned by China, is something that has come out of a lot of churn and research from its strategic and political leadership and is based on its National Objectives. The National Objectives are constantly evolving and not cast in stone for a said period of time. They are a result of what others are doing, their relative National Strengths (which are evolving too) and a concept that has not been fully understood  – National Will. The National Objectives so set by China is backed by strategies like BRI and the success of these initiatives is determined by the National Will.

The BRI, is fundamentally flawed in its design as it has been conceived because:

  1. China’s supremacy in the World Order as the numero uno and they would like a word order controlled by G2 – The US and China as the poles. All other countries, objectives, aspirations, actions are subservient to the maintenance of this top of the world position.

  2. While they have professed their willingness to be inclusive and approach BRI as a partnership of creating co-prosperity, their actions do not match stated intent. Many of the African countries have now begun to realize this and not only the few that are being mentioned. Even the CPoKEC is meeting resistance by mainstream Pakistani industry and population in Pakistani Punjab. So there is not much evidence of smooth sailing. That impression, despite Chinese efforts to market this image is not consistent with ground reality as project after project is getting re-negotiated or dropped.

Be that as it may, let us now examine the position, that somehow the Indian reaction is one that is bereft of a counter-narrative response. This view is misplaced and one attributes it to the Indian penchant of not looking at anything positive about ourselves. On a broad perspective the Indian response has been 8 pronged:

  1. Indian opposition to BRI has been based on an objective assessment of our strategic objectives, the use of Indian sovereign territory which is under illegal occupation cannot be condoned and accepted as fait accompli and give it a de facto recognition. No Indian government is constitutionally allowed to do so. Second, the BRI initiatives proposed in terms of commercial constructs does not aid in the development of local economic competitiveness, nor does it make commercial sense to partner countries. Third it does not provide an access to the Chinese market in an equitable manner. The case for foreign investment, the process and procedures to follow for setting up companies in China to access Chinese market is simply non-existent. Fourth, it allows Chinese access to natural resources at a cheap price and forces a dependency culture on technology as well key products and components for the participants of these programs. Fifth, the Chinese objectives of global domination and a two pole strategy are not in India’s interest. Hence based on all of the above, Indian objections to BRI have been communicated.Today, more and more countries are coming around to the assessment of India and have voiced their concerns. The deal with Italy does not mean that the European Union has capitulated and accepted the current proposed BRI as a fait accompli. These changes are a vindication of the objectiveness with which Indian position on BRI has been built.

  2. The second allegation, that India has not provided a counter narrative and a counter vision to the BRI. Nothing can be further from truth. At the heart of BRI, is the quest for energy sources, mineral sources, food/arable land and creation of an economic dependency architecture to the anchor nation (China). For the first time, India has taken the lead in creating an alternative energy international global order with the conceptualizing and launching of the International Solar Alliance (ISA) – the largest group of countries participating in Energy based multi-lateral arrangement. It has complemented this with a string of infrastructure projects, agreements on fossil energy and renewables, agriculture agreements and technology agreements on a bi-lateral and multi-lateral basis with almost every important area where BRI is extending today. A brief review of these agreements will clearly demonstrate the scale and scope of this response. It will be intellectually dishonest not to do that bit of research before saying nothing has been done on ground.

  3. The next major initiative that the Indian government conceived and launched is the Indian Ocean Region Dialogue and SAGAR initiative. It has got geo-strategic objectives both from a security and economic perspectives with a far more inclusive process of identifying a secure and economically sustainable growth model for the region that calls for an equitable movement of Capital, Technology, Resources and Knowledge. BRI in contrast is only more about resourcing Resources and Energy and securing trade routes for the benefit of China. This clear difference has been increasingly understood and the increasing interest and participation by the countries in Indian efforts to forge these links are there to be seen.

  4. India hosted African Nations in Delhi for a sustained dialogue on creating a more robust economic partnership that called for investment in African economies by Indian companies, creating of capacity in their respective nations and forging an economic relationship model that allows them a decent access to Indian market. Look at the deals signed with East African countries in terms of long term contracts for pulse cultivation, oilseeds cultivation, marine food production. It addresses important gaps in Indian requirements, promotes Indian led investment and creation of capacity in the African nations with a sustainable trade balance with India. More importantly, these were not deals designed by sitting in Delhi and looking for what we need, but was a result of exhaustive consultation and understanding of these nations requirements, their objectives and aspirations. In contrast, BRI deals were struck with only Chinese interests in mind and the disastrous consequences have alerted many African nations to reexamine. China has been forced back to the negotiating table in part because of India’s alternative and sensitizing of the African countries to the risks involved in getting into unviable projects. This is a very fundamental difference in approach. This difference is getting noticed when BRI projects end up creating unviable liabilities for the countries governments. Another important feature is that in the Indian model, the governments provide the framework, but it is the enterprises on both sides that team up to benefit. In the case of Chinese BRI model, the stark contrast of the capital being provided by Chinese which are disguised as investments but are actually loans of high interest that are to be supported by Sovereign Guarantee at the risk of ceding territorial soverignity, technology being provided by Chinese, jobs being done by Chinese and ultimately economy and political structure being controlled by Chinese. The Indian government has been more adept in managing its investment potential in these countries and the manner in which these investments are getting structured. The BRI ventures, when they fail, will come back to bite China. They think they have covered the risk through sovereign guarantees and takeover of assets. Many of the assets so created have not been able to liquidate the exposure. Long term this will come back to haunt China, especially with the US going after Chinese trade imbalance with them.

  5. India does not have the large reserves to ‘buy’ support to its counter-version of creating a viable alternative to BRI, therefore it has adapted to this situation and mitigated this disadvantage quite well through a series of moves. First of all, it is co-crafting an alternative to BRI along with Japan and potentially the United States with a wider consultation of the Indo-Pacific nations and groupings like the ASEAN. The capacity to create an economic model with the coming together of these three powers in addition to the Capital and Technological knowhow of other Asian Nations will be a counter point to China. The latent demand of the Indian markets, the capacity to create a knowledge based economic powerhouse in India and the region, can surpass and provide more jobs and prosperity to partners than what the BRI can. This is something that many nations in Asia, Africa, Central Asia and Latin America understand very well. The Act East policy has been finally getting the genuine attention to execution. Stalled projects of connectivity are being revived with the massive readiness in terms of infrastructure that has been created in the last 5 years especially. Rail lines, Roads, Ports and Airports have all been expanded and improved in the North East. A lot of diplomatic capital has been invested in Myanmar, Bangladesh, Thailand, Vietnam, South Korea and Indonesia to ensure that the vision for regional connectivity is enhanced. The National Waterway revitalization has an important element to provide connectivity to Himalayan nation states of Nepal and Bhutan. Nepal has been aligned to a great extent in terms investments into their economy and creation of economic assets for them.

  6. The much vaunted Chinese “offer” to India to join the BRI and benefit from it is in reaction to the Indian moves to counter the Chinese narrative and the fact that it is getting resonance. We tend to be hypercritical of ourselves and perceive ourselves to be incapable of mounting a serious challenge to China. The Chinese, thankfully are not under such misperceptions. They are completely aware of the Indian moves to counter and are at pains to not only engage India but also others that India is working with to try and persuade India. India’s counter move to create a parallel access to Central Asian states through the Afghan-India-Iran Charbahar Port, Road initiative and the actual operationalizing of this much faster than the CPoKEC alternative, the Chinese surprise to the Indian access to the port of Duqm in Oman for both military and trade use, the strategic oil storage and refining deals with the UAE and Saudi Arabia, the LNG deal with Qatar, the string of long term agro deals with African nations, the access to ports in IO Littoral, the long term energy deals with Latin America and Russia have not gone unnoticed by world powers. They have however been largely unreported and unappreciated by the so called Indian strategists.

  7. India has been forging an alternative to the fundamental operating model of world’s financial system as well. The evolving global order is creating fundamental shifts at a far more rapid pace and more so in the case of technology enabled world of world’s financial system and arrangement. This changing dynamics is forcing the status of the US dollar as the world’s global reserve and trading currency. India has entered into a series of non US Dollar based arrangements, thereby significantly, de risking currency dependency as we proceed to build a trillion dollar economy that is globally integrated. India has followed a principle of growth led exports as opposed to the fancied exports led growth. This has enabled a growth of a far more sustainable base of industry, trade and financial structures. This allows for a strategic financial and economic autonomy that is based on inherent strength of demand locally as opposed to being vulnerable to being dependent of foreign markets. This again is little understood dynamic in India by the so called strategic thinkers. In this context, the Indian Banking clean up and the forthcoming consolidation and expansion, the bilateral non US Dollar arrangements, the series of anti money laundering and anti black money international arrangements that are being forced into place by Indian action, the coming up of capacity in India for Fintech and financial inclusion, the removal of dependency on technology providers and platform providers (RuPay replacing MasterCard/Visa dominance in the use of electronic switch and platform, the increasing digitization and adoption of Block Chain), pushing the agenda for adoption of Information security, storage and access rules – every single initiative above are stemming from clear directional thinking and acting in an integrated manner. This is unprecedented in India.

  8. Indian counter narrative includes preparation for the coming era – I term this era as the era of “Economics of Expertise”. This is once again the least understood trump card when compared to the BRI approach. The countries that matter in the future are the ones that are best prepared for the era of economics based on expertise and knowledge. The Indian counter-narrative, in its approach towards building a partnership in four large geo strategic areas (Indo Pacific, IOR Littoral, Middle East, Central Asia), has this important perspective as the anvil on which the edifice of economic and security partnership is being developed and built. The Indian government has launched important linkages between industry and academia with a host of countries in the Indo-Pacific (U.S.A, Australia, New Zealand, South Korea, Singapore and Japan) and the Middle East (Saudi Arabia, Israel and the U.A.E) and Europe (France, Germany, the U.K and Russia) and the growing Start Up eco-system in India. There is a demand for engaging Indian Start Ups and its youth in many of the partner countries as they see India as an important partner in emerging spaces. Today, in key areas like Life Sciences, Fin Tech, Entertainment, Digital Commerce, Defence many of India’s partners are getting involved in striking partnerships and ventures with a younger, aspirational entrepreneurs. By contrast the BRI initiative is barren in these areas when it comes to co-creation and coinvestments in partner countries. It is more of what China wants to procure for creating its leadership in these areas and force the countries into a dependency on China.

One has only touched upon some of the salient features of the counter narrative that India has put in place. There is a lot more that has been achieved and being planned. One also adds that India has got it right by not coming up with a grandiose counter plan to rival this hegemonist model called BRI. India has not reacted emotionally but responded logically, with clear vision and intent, and demonstrated along with its partners a more viable, equitable, sustainable architecture for the benefit of all.

The Indian narrative has achieved significant success on the ground in terms of agreements reached, investments being made, outcomes achieved and it holds a much better promise of success. It is high time we stop whining and look at what India is doing and achieving. Today’s India is not a timid India. It is purposeful and acts with clarity when it comes to its national interests. It has no preconceived notions of being a natural leader of the world or some inane ideological battle line that are relics of the past. The only thing it has to get rid off is the stifling hold of its bureaucracy, judiciary and crony capitalists who have created a monstrous mafia like grip on every aspect of power. This old darbari clique’s [that I call Delhi Darbari Dalali Network (D3N)] hold on levers of power, will have to be broken.

One wanted to provide a view on what actually is the Indian view point and response as a response to the contention that we are sitting and twiddling on our thumbs and whining. We are neither whining about BRI, nor are we rejecting it without basis. We have instead responded with concrete action that has been yielding significant results and advantages to India and is likely to be far more sustainable for India and her partners. It all boils down to the world view of China and India. We seek to lead and they seek to dominate. We seek benefits for all and they seek benefit for themselves as the primary aim. We do not seek to undermine sovereignty, they seek to sovereignty of others to be subservient to their interests.

Hope that this provides a reference to the kind of counter narrative and gives a view of the Indian response to BRI. Instead of painting a picture of desperation, one would like to present the reality of what is happening and seek the active participation of the youngsters to proceed with determination rather than diffidence. You are part of an India that is assertive, decisive and purposeful. Ready for every challenge and ready to take her place in the comity of nations as a leader. Based on realism, clarity of thought, unity and purpose in action.

Mr. T.V. Krishnamurthy- Investment Banker and Business Strategist

At some point it will be strategically prudent to participate in BRI as China is attempting to woo Germany and France as partners in third country projects. Perhaps China is now preoccupied with the U.S.A’s attempts to muzzle Beijing into awkwardness in the U.N. on Masood Azhar. The India – U.S. relationship has always puzzled  the ordinary Chinese including  the Communist Party leaders. In fact the growing India – U.S. relationship is a major issue for the Chinese psychologically. The Chinese look at things in the very long term and they want to be sure that the U.S.- China economic linkage does not become U.S. – India Axis. Especially in S&T areas where the U.S. tech industry is deeply entrenched in India in Bangalore like in mass production by U.S. manufacturing companies in China.

The irony is the emergence of all futuristic technology will require huge talent and skill sets in huge numbers though technically jobs will be lost in routine logic areas. The Chinese are aware of these developments and the below the surface level developments that are happening in our own Bangalore with U.S. giants.

Like the Chinese, we should let go of old beliefs about Indians as labor force in technology areas which is caused by lack of awareness or popular belief. It is this very crucial development which might persuade the Chinese to tone down their opposition to India and lead to greater co operation. The Chinese have already invested close to US$ 60 billion through surrogates in Bangalore, not in e-commerce or Paytm alone, but in picking up stakes in companies engaged in real time research and development in A.I in general and A.I in business commerce and analytics in diverse areas including military applications including space.

One cautions against a leftist view on China. The U.S. will do to China what it did to a friendly Japan- Put their economy in spin without wars, by using ‘weapons’ like currency and trade. India must look for opportunities to engage with China, as by doing that we can at least control the present with China.

Cmde. R. S. Vasan

There is a need for India to look at China in the eye and deal with them firmly based on the merit of each issue whether Doklam, BRI, NSG, UNSC or counter-terrorism. If it is ‘China First’ for them that drives their agenda, it has to be ‘India First’ for us to see where there can be shaking of hands and where there is a need to say enough is enough. The BRI and some of the other aspects as mentioned above fall in the latter category. We have a defensive mindset. This percolates faster in the psyche of people.  No one is advocating war, but even when your interests are hit, why this demonstrated desire to pay obeisance to China? So India has to get its act together and not fall into a well-laid trap of China in many areas. The choice, as they say, is yours.

Mr. K. Subramanian

The main idea in circulating that paper was to draw attention to the diplomatic and strategic implications of BRI and how, it can be operated upon. The recent visit of Xi to Italy and discussions with EU leaders. It is clear that there is a divide in the EU over BRI and the US is, getting isolated.

Mr. M. R. Sivaraman IAS (Retd.)- Former Revenue Secretary, Ministry of Finance, GoI; ED IMF and Adviser UN SC CTC

A similar view has been expressed in a more detailed analysis in the Foreign Affairs. One wonders whether China is preparing for the worst in a distant future of a war either over the South China Sea or over Taiwan or even over Arunachal Pradesh.

Mr. K. Subramanian

Let us be honest and keep our eyes and ears open. China seems to have a longer-term, multi-planked approach in several parts of the world. On date, it has deep pockets and is able to dole out money (similar to U.S.A in the post-war years). Some western analysts call this ‘Cheque Book Diplomacy’. China can offer trade and high tech as in telecom (5G) and cyber security. It is able to diminish the role of the U.S. in Asia and the AIIB is a crowning achievement where China divided the G-7 ranks. It is trying to do it with the EU and achieved partial success.

One is sure China will continue with its agenda. Why should it wage wars to promote its interests when it is able to do it through other means? As Clausewitz said, “War is diplomacy through other means.” Incidentally, it is the U.S .which is packing its troops out of Syria, Afghanistan and Iraq, while China is contributing the maximum amount to the U.N. to maintain its Peace Keeping Forces.

Mr. Subramanyam Sridharan

If we have to be honest, we have to accept a few things:

  1. China is most definitely not doling out money. It is not implementing a Marshall or a Colombo Plan. It is instead doing the following:

  2. Identifying corrupt and weak leaders in smaller countries to wean them to its agenda (e.g.: Venezuela, Maldives)

  3. Fortuitously or intentionally inserting itself in internal situations of countries to curry favour and then use it for its agenda (e.g.: Sri Lanka)

  4. Choosing economically mis-managed countries to offer its deep pockets to gain strategic concessions (e.g.: Greece)

  5. Aligning with ruined communist countries to fight a common enemy (e.g.: Russia)

  6. We know from DAWN Leaks more than a year back that IRR for Chinese projects in Pakistan was pegged at around 18%

  7. Of course, the US also had geo-political & geo-strategic interests post WW-II in its plans including PL-480 or Atoms for Peace etc. in order to retain its supremacy, nip challenges and regulate the world according to its agenda, but the Chinese are simply devastating and ruining countries in order to get a stranglehold and gain strategic space through usurious means.

  8. China’s offer of 5G and cybersecurity is most laughable, especially the latter as China is the biggest cyber threat to the whole world. On 5G, we know the on-going Huawei case and more countries are opting out of Chinese networking gear.

  9. It is also important to remember another Clausewitzian quote, “In politics, there are two kinds of coalitions: one, that aims to expressly defeat or coerce the enemy, and another that aims to weaken, to preoccupy, both the enemy and the ally”

  10. For the UNPKO, it is true that China upped its contribution from 6% to ~10% three years back but it has either remained steady at that rate or has slightly declined. The US contribution has also remained a constant at around 28%. However, among the nations contributing actual boots on the ground, India is head and shoulders above China. Indian commanders have led UNPKO. Out of the 3,800 personnel who have been killed during missions since 1948,164 are  Indians. While India is driven by genuine interests of keeping peace and provide humanitarian and disaster assistance in UNPKO missions, the Chinese aims are to project power.

Cmde. R. S. Vasan

The recent conference hosted by C3S along with NMF had speakers who were more or less unanimous in the negative impact of BRI on destination countries because of the nature of investments that only allowed China to sustain its growth by exporting its surplus capacity. General Narasimhan (Retd.) was  categorical in saying that there is a tendency to give a lot more credit to what China does with out in depth examination of the related factors. When India did not attend the BRI summit it was alone. Today there are twenty eight nations who share similar apprehensions about the unilateral nature of BRI investments. They have learnt to be cautious and will allow investments from China only if it does not lead to a debt trap..

The forthcoming BRI Summit is again very important for Xi Jinping as it is his pet project and he cannot allow this to fail. So they will negotiate harder, buy weak politicians and showcase it as the best thing that happened to humanity. Officially, India has already indicated that it will not attend the BRI Summit for reasons that have been discussed n number of times in this forum. It will continue to be the top priority for Xi to ensure that more nations are brought under the ambit of BRI as it is only through that course that China can sustain its GDP growth. Yes, China has the ability to absorb economic losses but does not mind that as long as there are strategic and political gains. So we can expect some course corrections to BRI to make it attractive to the nations on the BRI map.

India has done well to steer clear of BRI. As mentioned earlier,  we need to call the CPEC as CPoKC in all our discussions . The continued use of CPEC would in the long run be seen as legitimizing this corridor as belonging to Pakistan. The recent case of burning of all maps which depicted Arunachal Pradesh as part of India and Taiwan as a separate nation is indicative of the extent to which China can go to protect its interests. The SCS was no different, where in ancient maps were discovered overnight to buttress their claims in the nine dash line.

One agrees with the propositions of Subramanyam Sridharan who has captured the essence of all   devious schemes/machinations of China as Xi pursues the ‘Chinese Dream’. Well, no one can fault Xi for his China first policy; it is his right as the core leader to decide on what China should be by 2021 and then in 2049. We need to see where that impinges on our own India first policy and be proactive to thwart Chinese designs that are detrimental to our own growth and aspirations.

Mr. M. R. Sivaraman

One is firmly of the view that India should not go near the BRI. True, our neighbours such as Nepal, Sri Lanka and other nations will join in the hope of great economic benefits. But Sri Lanka has already lost a portion of its territory for 99 years. How can the island nation, a democratic country, cede territory to another country and why no one in Sri Lanka has challenged this in the Sri Lankan Supreme Court is a mystery. This is going to be the precedent in many countries. China has to aggressively promote the BRI as not only to save the prestige of Xi Jinping but to save its own economy. Chinese municipalities and their enterprises are being encouraged to pursue projects in the BRI to keep them going. But one perceives that some of them will borrow more to undertake these BRI ventures. There needs to be analysis of the cost benefit analysis of any major BRI project.

China has to keep its furnaces hot and keep its construction industry going – the provider of employment and growth other than BRI. The Indian Embassy in PRC should work on how many projects are in progress under the BRI, the number of local people employed in the projects  vis-à-vis the Chinese, the amount invested and the terms of investment, the ownership pattern of investments and so on.

It will then become clear as to the future economic and political implications of Chinese investments.

China is still generating huge trade surpluses adding to its reserves. In the last year China had a positive trade balance of over US$350 billion more than India’s total exports. The country has enough monetary power to contend with the rest of the world in influencing countries. Cheap goods from China are now being supplemented by high value exports of technological products. In all likelihood China will be the unstoppable express unless consumption pattern changes.

Donald Trump as a shrewd businessman has realized this and he provoked the trade war with China to curb its trade surpluses. Leftists will contend differently and say China is great as it is giving the U.S. a run for its money and a taste of its own medicine. True, this cannot be denied.

But what of India? India should consider the course to be followed by the country to maintain its position as a growing power.

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