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‘OBOR’ and South Asia: Can India and China Cope with the Emerging ‘New Normal’ in the Region?

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Abstract

Ever since President Xi Jinping announced the ‘One Belt, One Road’ project in 2013, more than 66 countries across the continent expressed their interest to be part of this grand project of the century. In South Asia, most of the countries embraced the idea except India. There is no doubt that OBOR is likely to have far-reaching implications on South Asian politics, economy and security. China has been engaging in the region through various economic and development projects for last two decades. This has raised serious security and strategic concerns in India. China’s growing bilateral trade investments and development-oriented connectivity projects in India’s neighbourhood have been popularly dubbed as China’s ‘String of Pearl Strategy’ aimed to contract India’s sphere of influence in the region. There is a deficit of trust between emerging India and rising China over their interests and intentions. Many observers, however, view OBOR as a game changer at least in South Asia, where this would necessitate re-alignment and re-balancing. But, how does India perceive this project is a matter of serious concern that would shape the nature of implications on South Asia? In this context, this article examines the impact of OBOR on South Asia Region from sub-regional perspectives and it explores how China can play a constructive role by reconciling its grand strategy with national interests of South Asian countries in order to minimise the adverse impact of OBOR [especially China–Pakistan Economic Corridor (CPEC)] on the peace and security of the region through effective CBMs.

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Fig. 1

Source: http://herald.dawn.com/news/1153597/cpec-the-devil-is-not-in-the-details

Fig. 2

Source: United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP)

Fig. 3

Source: DWAN and The Hindu Newspapers

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Notes

  1. See for original transcript of President Xi Jinping’s speech delivered in which he proposed to build a Silk Road Economic Belt with Central Asian Countries for a ‘Better Future’ on 07 September 2013 at Nazarbayev University in Astana, Kazakhstan. Retrieved from the Ministry of Foreign Affairs of the People’s Republic of China http://www.fmprc.gov.cn/mfa_eng/topics_665678/xjpfwzysiesgjtfhshzzfh_665686/t1076334.shtml.

  2. Basic information about membership retrieved from AIIB official website; for details, see http://www.aiib.org/html/aboutus/introduction/history/?show.

  3. See “The Grand Design of China's New Trade Routes” published by Stratfor, 24 June 2015. Retrieved from https://www.stratfor.com/analysis/grand-design-chinas-new-trade-routes.

  4. Peter Symonds, ‘One Belt, One Road: China’s response to the US “pivot”’ Wall Street Journal, 4 December 2015. Retrieved from https://www.wsws.org/en/articles/2015/12/04/obor-d04.html.

  5. A response to a query during a Chinese and Foreign Media conference held on 8 March 2015. Retrieved from http://www.fmprc.gov.cn/mfa_eng/wjb_663304/wjbz_663308/2461_663310/t1243662.shtml.

  6. Gisela Grieger, Members' Research Service, European Parliamentary Research Service, Policy Brief to the Members and staff of the EP for their parliamentary work, July 2014. Retrieved from http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/586608/EPRS_BRI(2016)586608_EN.pdf.

  7. The term ‘Washington Consensus’ was coined by John William son in 1989, which is based on ten policy recommendations as follows: (1) Fiscal Discipline; (2) Restructuring Public/Social Expenditure Priorities; (3) Tax Reform; (4) Liberalising Interest Rates; (5) Competitive Exchange Rates; (6) Trade Liberalisation; (7) Liberalisation of Inward Foreign Direct Investment; (8) Privatisation; (9) Deregulation; and (10) Property Rights. For details see John Williamson (2004), ‘A Short History of the Washington Consensus’, Paper commissioned by Fundación CIDOB for a conference ‘From the Washington Consensus towards a new Global Governance’, Barcelona.

  8. The term ‘Beijing Consensus’ was coined Joshua Cooper Ramo through his famous research paper titled The Beijing Consensus in 2014. According to Ramo, the BJC provides alternative global economic development model based on three overarching ideals of Chinese development: Innovation, Pursuit of Dynamic goals and Self-determination. See Ramo, Joshua Cooper (2004) ‘The Beijing Consensus’ The Foreign Policy Centre, pp. 5–9. Retrieved from http://fpc.org.uk/fsblob/244.pdf.

  9. For details see the full text of the Report on the Work of the Government delivered by Premier Li Keqiang at the Second Session of the Twelfth National People's Congress on March 5, 2014 and adopted on March 13, 2014. Retrieved from http://news.xinhuanet.com/english/special/2014-03/14/c_133187027_3.htm.

  10. Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road (First Edition), Issued by the National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce of the People's Republic of China, with State Council authorisation, 28 March 2015. http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367.html. Accessed 1 December 2016.

  11. Veronique Salze-Lozac'h and Nin (2013), ‘Intra-Asian trade will define the region's future’, published in The National News Network, see here http://www.nationmultimedia.com/news/opinion/aec/30201929. Accessed 12 December 2016.

  12. Agreement on SAARC Preferential Trade Arrangement, http://saarc-sec.org/uploads/document/SAPTA%20Agreement_20110812120334.pdf. Accessed on 10 December 2016.

  13. See for more details here http://www.saarc-sec.org/areaofcooperation/detail.php?activity_id=5. Accessed on 11 December 2016.

  14. Asian Development Bank (2009) ‘Study on Intraregional Trade and Investment in South Asia’, Asian Development Bank. http://hdl.handle.net/11540/2416. License: CC BY 3.0 IGO. Accessed on 13 December 2016.

  15. The Asia Foundation (2016) ‘Intra-regional Trade in South Asia’, http://asiafoundation.org/publication/intra-regional-trade-south-asia/. Accessed on 12 December 2016.

  16. Ibid. P.4.

  17. Kumar and Singh (2009). https://www.adb.org/publications/indias-role-south-asia-trade-and-investment-integration. Accessed on 18 December 2016.

  18. 12th SAARC Summit held from 4–6 January, 2004 in Islamabad, Pakistan. http://saarc-sec.org/userfiles/Summit%20Declarations/12%20-%20Islamabad%20-12th%20SAARC%20Summit,%204-6%20January%202004.pdf. Accessed on 17 December 2016.

  19. SAARC Regional Multimodal Transport Study (2006), Final draft prepared and submitted to the SAARC Secretariat, https://kumarage.files.wordpress.com/2015/03/2006-r-01-nt-ramathulla-kumarage-etal-saarc-regional-multimodal-transport-study-189pp.pdf. Accessed on 16 December 2016.

  20. Rahmatullah (2010, pp. 3–4).

  21. See for more details on the Summit declaration here http://www.mea.gov.in/bilateral-documents.htm?dtl/3886/16th+SAARC+Summit+Declaration+29+April+2010. Accessed on 10 December 2016.

  22. BIMSTEC is a regional organisation comprising seven Member States lying in the littoral and adjacent areas of the Bay of Bengal constituting a contiguous regional unity. The members include Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand. See http://bimstec.org/index.php?page=overview. Accessed 11 December 2016.

  23. In its 12th Five Year Plan (2012–2017), the Government of India has identified connectivity with the North-East, both within the region and with the far eastern region, including Myanmar, Bangladesh and Thailand, to be one of the focus areas for economic development of the region and expanding economic activities.

  24. See for the details http://www.pmindia.gov.in/en/news_updates/bangladesh-bhutan-india-and-nepal-bbin-motor-vehicle-agreement/. Accessed 20 December 16.

  25. China’s Foreign Aid (2011). State Council of the PRC. April, 2011: 4. http://english1.english.gov.cn/official/2011-04/21/content_1849913.htm. Accessed on 21 December 2016.

  26. Rajan (2015). Published in the South Asia Analysis Group, http://www.southasiaanalysis.org/node/1763. Accessed on 16 December 2016.

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Acknowledgements

I am extremely grateful to the Fudan Development Institute (FDDI) at Fudan University for the support through OBOR Visiting Scholar Program. Special thanks to Prof. Zhang Yi, Vice Dean of FDDI, for providing research facilities at Fudan. Ms. Jiang Luxi and Qian Siyun have supported me with secretarial assistance during my fellowship.

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Authors and Affiliations

  1. Department of National Security Studies, Central University of Jammu, Jammu and Kashmir, India

    J. Jeganaathan

  2. Fudan University, Shanghai, China

    J. Jeganaathan

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Jeganaathan, J. ‘OBOR’ and South Asia: Can India and China Cope with the Emerging ‘New Normal’ in the Region?. Fudan J. Hum. Soc. Sci. 10, 161–178 (2017). https://doi.org/10.1007/s40647-017-0171-1

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