Understanding India’s response to China’s Belt and Road
New Delhi decided to skip the much-publicized Belt and Road Forum in Beijing, framing the One Belt, One Road (OBOR) initiative as a bad deal that undermines India’s core interests. Is this position in conflict with India’s simultaneous aspirations for economic cooperation and peaceful co-existence with China?
In this instance, the government of Prime Minister Narendra Modi has made its position clear: The national priorities for sovereignty trump commitment for everything else. One may term the Indian response as unsophisticated, but it is not unintelligent. India is acting sensibly.
How significant is India’s refusal to be part of the “China dream”? Let’s be clear. Although China’s communist leadership tried its best to persuade the Modi government to join the OBOR bandwagon, India’s firm opposition is not going to force China to downgrade its geo-strategic ambition of bringing countries from Central Asia to Europe into its orbit. Beijing will be tempted more to demonstrate how New Delhi’s denial is detrimental to India’s own economic interests. It is not difficult to arrive at the conclusion that India has isolated itself both regionally and globally when all its neighbors are participating in “the project of the century”.
Despite its territorial disputes with China, New Delhi has found ways to cooperate with Beijing on matters of mutual interest. India’s involvement in the Asian Infrastructure Investment Bank (AIIB) or the BRICS Development Bank, now known as the New Development Bank (NDB), is an example of the fact that India accords strategic engagement with China a great deal of significance. India’s membership in the Shanghai Cooperation Organization (SCO) is also likely to make way for increased cooperation with China. Then what really explains India’s stiff resistance to be part of OBOR?
We need to understand that OBOR is unlike the AIIB, the NDB or the SCO. Not conceived as a multilateral project, OBOR involves a series of projects to be undertaken through bilateral agreements between China and the partner countries. There is no institutional framework or decision-making mechanism through which participating countries are connected with one another.
Having said that, OBOR is still unparalleled in its social, political, strategic and ecological consequences, as it is going to allow China to grow economically at astonishing rates and subsequently increase its “comprehensive national power”.
In terms of grand strategy, OBOR constitutes the greatest challenge ever to the post-World War II Western-led global order. From the start of the Cold War, the US constructed a liberal international order for its allies and friends, underpinned by economic interdependence through trade, investment and commercial flows. After its defection from the Soviet sphere in the early 1970s, China gained inclusion into that free-trade international order.
However, the rise of China to great-power status in the present century is going to transform the character of international structure of power. China does not share the core political values that underpin the existing rule-based international order. It is already without doubt that China is no longer bargaining and adjusting to fit itself into the existing order, and rather attempting to create a new, alternative order. The success of OBOR will determine whether China succeeds in this endeavor or not.
To be sure, we are not dealing with an unpredictable regime that shifts its mood dramatically. China’s dream of a Sino-centric Asia predates President Xi Jinping. However, OBOR has been in the making ever since he assumed the leadership of China.
It should not be forgotten that China has been the greatest beneficiary of globalization, both in terms of export-led growth and poverty reduction. Besides registering impressive economic gains, China has lifted hundreds of millions of its citizens out of poverty. It is running huge trade surpluses with most of its trading partners.
However, Beijing’s approach to growth has now been thwarted by rising internal imbalances and an increase in protectionism in China. One of the reasons OBOR has gotten under way is to overcome the problem of China’s enormous overcapacity in steel, construction machinery and transportation.
Now China is changing from an adapter to a driver of globalization. With OBOR, Xi wants to remake globalization on China’s terms. In effect, China is raising the stakes on its connection to an increasingly integrated global economy, and creating a new set of risks and opportunities along the way.
Earlier, “China dream” was something of a nationalist mantra, framed as a rejuvenation by which the nation would regain its former pre-eminent position. The shape that the China dream is taking under Xi is a plan of action, centered on OBOR, and supported by a new set of China-centric financial institutions – the AIIB, the NDB and the Silk Road Fund.
India’s interests are inextricably linked with Asia’s economic, security and political order. Beijing has been attempting to change the status quo in Asia, which New Delhi wants Washington to maintain. Those who see inevitable conflict between Beijing’s interests in gaining dominance in Asia and New Delhi’s objective to prevent any country from gaining such a position point out that China’s offer to India to join OBOR is tactically aimed at coercing India into submission under a China-dominated order in Asia.
There is growing unanimity among Indian scholars that India’s long-lasting hopes for a non-assertive rise of China have not materialized. In the future as in the recent past, China’s foreign policies can be susceptible to spells of adventurism in the name of national greatness.
Is India missing out on something substantial by not participating in OBOR? Its participation in the initiative is not a prerequisite for reaping the benefits of regional connectivity, which may happen with or without China. In OBOR, there is no blueprint of a multi-nation connectivity plan that India is losing out on.
India has the option to evaluate China’s proposals on their merit. Thus there is ample scope for both India and China to pursue bilateral cooperation to improve regional connectivity. Also, India is not going to lose potential investment in its infrastructure projects by keeping away from OBOR. Chinese investment is primarily through loans with significant interest rates and other conditions. Requirements such as the purchase of Chinese equipment and the use of Chinese technology and Chinese labor are already creating much resentment in countries where China has undertaken projects.
Lacking transparency, the OBOR projects entail no commitment to social or environmental sustainability. Many of them have acquired military dimensions as well.
Why does India consider the China Pakistan Economic Corridor (CPEC), which is an essential component of OBOR, as a full-fledged assault on its sovereignty? To begin with, it does not offer a welcoming environment from India’s perspective.
The CPEC goes through northern areas and Pakistan-occupied Kashmir (PoK) to Gwadar in Baluchistan. Those who ask India’s leadership to live with the ground reality of Pakistan’s possession of the other half of Kashmir, and take a realistic response to China’s infrastructure building in PoK, do not seem to be aware of its repercussions. This advice ignores the fundamental reality that the CPEC violates India’s territorial integrity.
The Line of Control (LoC) has not been accepted yet as an international boundary between India and Pakistan. Signing on to OBOR with CPEC running through PoK would be political suicide for any government that wants to enhance India’s global standing. Had India joined the CPEC in Kashmir without its sovereignty concerns being acknowledged and accommodated by China, it would have been very difficult to defend its claims in subsequent negotiations over the disputed territory.
Chinese could have done more to create some sort of institutionalized mechanism in which Indians would feel more a part of the connectivity project.
Ordinarily, both diplomacy and politics involve much give and take, but what one finds particularly disturbing about Chinese political and diplomatic behavior is that it only goes in one direction. Has China ever explained why it opposes any welfare or infrastructure project in Arunachal Pradesh state for which funding has been sought from international financial institutions?
And now it has gone a step further. China’s advice to India to exercise “restraint” on the Bhupen Hazarika Bridge in Arunachal Pradesh is a manifestation of a deeper defect in Chinese strategic thinking. Is it not surprising that China has the temerity to claim that its infrastructure projects in PoK do not affect the issues of territorial integrity and national sovereignty?
China’s refusal to listen to Indian arguments and address them in a proper manner has heightened India’s sense of vulnerability and fostered a tit-for-tat thinking in New Delhi. Assimilating India into the Sino-centric system is not like absorbing some small country. It requires redefining the meaning of Chinese hegemony.
Now let’s discuss Pakistan, which is an interesting case in the way China’s geo-strategic ambitions have evolved over the last few years.
The announced Chinese investments in Pakistan’s infrastructure for establishing the CPEC can be seen as a reward for Pakistan’s efforts to tie India down in South Asia’s geopolitical quagmire.
As revealed recently in the Pakistani newspaper Dawn, Pakistan is on the verge on becoming an economic and military outpost of China. According to a recent Pentagon report, “China most likely will seek to establish additional military bases in countries with which it has a long-standing friendly relationship and similar strategic interests, such as Pakistan.” India cannot afford to lose sight of this dimension as it directly impacts its security interests. If China emerges as Pakistan’s sole trade window to the world, this will have repercussions for India.
There is an urgent need for closer regional connectivity and economic integration among South, Southeast and Central Asia. But Chinese diplomacy is not inclined to engage in the kind of consensual assumption of responsibility that these regions require.
Beijing’s belief in Chinese superiority and Indian inferiority has prohibited a constructive dialogue between the two Himalayan neighbors, restricting the discovery of effective ways to encourage India to engage in mutually beneficial regional cooperation with China. Beijing has never accepted Indian primacy in South Asia, as it seems determined to build its own dominance. Beijing has already made some deep inroads, venturing into India’s traditional sphere of influence in South Asia and the Indian Ocean, and CPEC is an ominous example of this reality.
OBOR would enable Beijing more forcefully to prosecute its own agenda vis-a-vis India’s smaller neighbors. Growing Indian perceptions of Chinese bellicosity, being nurtured by Beijing’s aggressive anti-India regional diplomacy, has reinforced the feeling that containment of India remains the long-term Chinese objective.
The scope of China’s regional hegemony is admittedly great, but its depth seems shallow, limited by both domestic and external restraints, which place a premium on geo-strategic and selective deployment of China’s resources in regions where OBOR is envisaged. It is also a fact that China is too authoritarian domestically to be democratic internationally. This limits the use of China’s hard power, especially its capacity for military intimidation.
Will India’s refusal to participate in the much-vaunted OBOR initiative create a self-fulfilling prophecy of a strategic rivalry with China? As long as China understands both the potential of its power and the dangers of exceeding its limits, it will not attempt to escalate tensions with India for outright strategic rivalry. Though there have been some missed opportunities and misconceived actions, the Modi government has very forcefully signaled that India will be very clear-cut in the definition of its national interests.
In any case, India needs a new China strategy. That is an important, difficult challenge. The Modi government seems willing to make the push that is needed to secure India’s interests, even if it means opening the door to a quite different way of thinking about China. However, mere opposition to Chinese moves cannot be a strategy.
Reconsidering the dynamics of India-China relations in a broader context, the choice to focus on an adversarial competition and outright strategic rivalry would be a step backward. It will be a great challenge to Indian diplomacy and business to make the complex game with China work in India’s interest.
India’s decision to stay away from the Belt and Road Forum should not be allowed to influence New Delhi’s overall approach and strategy toward China. India must join hands with China to achieve strategic reconciliation, whose terms need not be dictated by India’s response to OBOR. Perhaps the Indian government is aware of this reality; that is why Modi, speaking at a panel discussion recently at the St Petersburg International Economic Forum, said: “It is true that we have a border dispute with China. But in the last 40 years, not a single bullet has been fired because of it.”
Greater political and diplomatic discussions are required to offset the fundamental causes of tensions and divergent interests between India and China. Nonetheless, India should continue to look for opportunities that best fit its foreign-policy objectives, and act in a manner that reflects the nation’s self-perception as a benevolent soft power capable of countering an almost mystical belief in the inevitability of China’s dominance of Asia.
Although India cannot prevent its economically backward neighbors from wanting to be part of OBOR, it can still keep them out by soft power and non-hegemonic behavior. Creating stability in South Asia while simultaneously engaging China both bilaterally and multilaterally must remain the first strategic objective of Indian diplomacy.