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OBOR, Chinese Strategy and Implications

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Re: OBOR, Chinese Strategy and Implications

Postby chanakyaa » 27 Jul 2017 05:42

My apologies if this has already been posted

Nepal and OBOR

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Re: OBOR, Chinese Strategy and Implications

Postby shiv » 27 Jul 2017 07:35

I have a nice video showing this year's landslides blocking the Xinjiang Pakistan route. That route is never going to be a high volume trade route

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Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 30 Jul 2017 20:21

Ignoring OBOR, India and Japan forge ahead with joint connectivity project - Economic Times
China may not have forgiven India for snubbing its mega trans-continent corridor initiative, but in what may rankle more is that New Delhi and Tokyo, Beijing's arch rival, are pushing ahead with a development corridor between Asia and Africa.

The announcement of the Asia Africa Growth Corridor (AAGC)
, made by Prime Minister Narendra Modi during the African Development Bank (AfDB) meet in Gandhinagar in May, came days after China hosted with great pomp the first One Belt One Road (OBOR) summit in Beijing. The venture is expected to get further impetus in September during the visit of Japanese Prime Minister Shinzo Abe.

India has been involved in Africa for many years, in trade as well as capacity-building activities. Japan, which has been working on infrastructure projects in Africa, can help with its advanced technology as well as funds for the AAGC. Japan is reportedly planning to commit $200 billion for the proposed growth corridor.

So, is the AAGC meant as a counter to OBOR?

"The two are completely separate. OBOR is different. Long before OBOR, India and Japan were individually working in Africa, and were talking to each other about Africa," Rajiv Bhatia, a former Indian ambassador, told IANS.

"India and Japan feel that by intensifying cooperation with Africa, they can help each other and Africa. We are working on the AAGC in our own way and at our own pace," said the former High Commissioner to South Africa and Kenya.

He said that China's engagement in Africa is extensive, while the India-Japan collaboration is beginning to take shape. The AAGC shows that India and Japan desire to take their cooperation beyond the bilateral sphere, he added.

China's OBOR, proposed by President Xi Jinping in 2013, is an estimated $5 trillion connectivity corridor spanning over 60 countries across Asia, the Middle East, Europe, and Africa. It is meant to be a revival of the ancient Silk Road trading route and is expected to comprise building of roads, bridges, gas pipelines, ports, railways and power plants, besides SEZs.

India and Japan had begun a dialogue on Africa in 2010, a continent in which both have much stake. The main objective of the AAGC is to enhance growth and connectivity between Asia and Africa. According to the vision document, the corridor will focus on four areas: Development Cooperation Projects, Quality Infrastructure and Institutional Connectivity, Enhancing Skills, and People-to-People Partnership.

Agriculture, health, technology, and disaster management are the main areas of development cooperation. It will focus on boosting skills and research and development capacities in Africa.

According to a report by McKinsey, China is Africa's largest economic partner, with goods trade worth $188 billion in 2015 -- compared to $59 billion with India. Since the turn of the millennium, Africa-China trade has been growing at approximately 20 per cent per year, the report says, adding that there are around 10,000 Chinese firms in Africa,

Three think-tanks -- India's Research and Information System for Developing Countries (RIS), Indonesia's Economic Research Institute for ASEAN and East Asia (ERIA), and Japan's Institute of Developing Economies (IDE-JETRO), prepared the vision document for AAGC. They have produced one report on the corridor and another report is due in a few months, said Bhatia.

He said that at the corporate level, companies of India, Japan and from Africa are looking at specified sectors of the growth corridor in order to execute projects. "There is seriousness and earnestness" behind the initiative, he added.

Bhatia, a former Director General of Indian Council of World Affairs (ICWA), also feels that giving too much importance to OBOR and China would help Beijing.

Speaking on the comparison between OBOR and the AAGC, Sachin Chaturvedi, Director General, RIS, told IANS: "The OBOR, it seems, is visualised on the idea of economic corridors and infrastructure development with connectivity as the central focus, while the AAGC is a concept based on the theory of growth poles where several growth triangles and quadrangles are envisaged with different regional production hubs."

The proposed AAGC seeks to encompass and integrate Africa, India and South Asia, Southeast Asia, East Asia and Oceania.

India's increased engagement with Africa comes in the backdrop of the third India-Africa Forum Summit held in New Delhi in October 2015 when all 54 African nations had sent their representatives. India has also made many high level visits to several African countries, as part of its outreach. India also held the AfDB annual meeting in Gandhinagar this May.

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OBOR, Chinese Strategy and Implications

Postby Peregrine » 02 Aug 2017 16:55

X Posted on the STFUP and Analyzing Threads

Here is how China 'friendship' highway is shattering Pakistani businessmen's dreams

TASHKURGAN, CHINA: The China-Pakistan Friendship Highway runs over 1,300 kilometres (800 miles) from the far western Chinese city of Kashgar through the world's highest mountain pass and across the border.

For China, the two-lane thoroughfare symbolises a blossoming partnership, nourished with tens of billions of dollars of infrastructure investment.

But for many Pakistani businessmen living and working on the Chinese side of the border, the road is a one way street.

"China says our friendship is as high as the Himalayas and as deep as the sea, but it has no heart," said Pakistani businessman Murad Shah, as he tended his shop in Tashkurgan, 120 kilometres from the mountain pass where trucks line up to cross between China's vast Xinjiang region and Pakistan.

"There is no benefit for Pakistan. It's all about expanding China's growth," Shah said, as he straightened a display of precious stones.

The remote town of around 9,000 is at the geographic heart of Beijing's plans to build a major trade artery -- the China-Pakistan Economic Corridor (CPEC) -- connecting Kashgar to the Arabian Sea port of Gwadar.

The project is a crown jewel of China's One Belt, One Road (OBOR) initiative, a massive global infrastructure programme to revive the ancient Silk Road and connect Chinese companies to new markets around the world.

In 2013, Beijing and Islamabad signed agreements worth $46 billion to build transport and energy infrastructure along the corridor, and China has upgraded the treacherous mountain road better known as the Karakoram Highway.

While both countries say the project is mutually beneficial, data shows a different story.

Pakistan's exports to China fell by almost eight percent in the second half of 2016, while imports jumped by almost 29 percent.

In May, Pakistan accused China of flooding its market with cut rate steel and threatened to respond with high tariffs.

"There are all of these hopes and dreams about Pakistan exports," said Jonathan Hillman, a fellow at the Center for Strategic and International Studies in Washington.

"But if you're connecting with China, what are you going to be exporting?"

One answer is Nigerian "male enhancement" supplements: expired medications which Pakistani merchants in the oasis city of Hotan recently peddled to bearded Muslims walking home from Friday prayers.

The products were typical of the kinds of small consumer goods brought by Pakistani traders into Xinjiang: medicine, toiletries, semi-precious stones, rugs and handicrafts.

Pakistani businessmen in Xinjiang see few benefits from CPEC, complaining of intrusive security and capricious customs arrangements.

"If you bring anything from China, no problem," said Muhammad, a trader in the ancient Silk Road city of Kashgar, who declined to give his full name.

But he said tariffs on imported Pakistani goods are "not declared. Today it's five percent, tomorrow maybe 20. Sometimes, they just say this is not allowed".

Three years ago, Shah was charged between eight and 15 yuan per kilo to bring lapis lazuli, a blue stone. The duty has since soared to 50 yuan per kilo, he said.

Customs officials told AFP the "elements influencing prices were too many" for them to offer a "definite and detailed list" of costs.

While large-scale importers can absorb the tariffs, independent Pakistani traders have benefited little from CPEC, said Hasan Karrar, political economy professor at the Lahore University of Management Sciences.

Alessandro Ripa, an expert on Chinese infrastructure projects at Ludwig Maximilian University Munich, said the highway "is not very relevant to overall trade" because "the sea route is just cheaper and faster".

The project is better understood as a tool for China to promote its geopolitical interests and help struggling state-owned companies export excess production, he said.

Traders also face overbearing security in China.

Over the last year, Beijing has flooded Xinjiang, which has a large Muslim population, with tens of thousands of security personnel and imposed draconian rules to eliminate "extremism".

Businessmen complain they are not allowed to worship at local mosques, while shops can be closed for up to a year for importing merchandise with Arabic script.

In June, on the 300 kilometre trip between Kashgar and Tashkurgan, drivers were stopped at six police checkpoints, while their passengers had to walk through metal detectors and show identification cards. Signs warn that officials can check mobile phones for "illegal" religious content.

Police officers interrupted an interview in Tashkurgan to demand a shopkeeper hand over his smartphone and computer for inspection, an event he said occurs several times a week.

Shah said that when he first arrived in the town, the intrusive security made him nervous: "But now I'm used to it. I almost feel like I'm one of the police."

As he spoke, an alarm sounded. He grabbed a crude spear, body armour and a black helmet off his counter and rushed into the street, where police had assembled over a dozen people for impromptu counter-terrorism drills.

The exercises are held up to four times a day. Stores are closed for several days if they do not participate.

Back in Kashgar, Muhammad hopes that CPEC will make life better, but he believes the oppressive security will remain an obstacle.

He plans to give it another three years. But, he said, he cannot wait forever: "Many people have already gone back."

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OBOR, Chinese Strategy and Implications

Postby Peregrine » 16 Aug 2017 16:44

X Posted on the Analyzing CPEC and STFUP Threads

Decoding the Doklam puzzle: China may be fighting its border war on Pakistan front

Will India and China go to war over Doklam? India has refrained from showing any aggression so far. China has heightened the war rhetoric but without backing it with any solid action. It seems China does not want an actual war but a prolonged, war-like situation.

China cannot start a war with India, even if it's a localised conflict, over a small piece of high-altitude land that remains hard to access most of the time. Such a misadventure will carry heavy diplomatic, economic and even military costs.

China has begun to project itself as a responsible global power as it seeks to enlarge its international footprint. Its huge debt—about 300 per cent of GDP — even if most of it is state-owned and thus manageable, remains a big economic challenge. India is a nuclear power, and there is no guarantee a local conflict won't blow out of control.

Then why is China risking a costly war? The answer to this question lies in two biggest developments in the subcontinent in the past few years: India's surgical strike inside the Pakistan-occupied Kashmir last year and China planning to build a global network of roads, ports and railways which it calls 'One Belt, One Road' (OBOR). India boycotted the grand launch of OBOR because a part of it—China-Pakistan Economic Corridor (CPEC)—passes through Pakistan-occupied Kashmir (PoK). Balderdash! China wants India to join OBOR and CPEC so that it can have access into Clapistan via the India - Bangladesh - Myanmar - China Road System through Kunming in Yunnan. India would not want to have Pakistani Trucks going to Yunnan and other parts of Southern and Eastern China.

India's opposition to OBOR is the biggest sore point between India and China today. And that could be the reason behind China's Doklam posture. Border disputes have lingered on for decades and have rarely led to such a prolonged stand-off.

So, the actual theatre of Doklam war might not be the India-Bhutan-China tri-junction where Indian and Chinese soldiers are facing off. It could be thousands of kilometres away—the Line of Control between India and Pakistan. In Doklam, China might be maneuvering to secure CPEC, its biggest strategic asset in the region.

CPEC is a network of roads, railways and energy projects linking China's Xinjiang region to the Gwadar Port in Pakistan. It can give China an alternative to its main trade route that passes through the Strait of Malacca and the Indian Ocean. CPEC will provide a shorter and cheaper access to markets in Asia, Africa and even Europe. More importantly, it will not be vulnerable to disruption by India which can now cut off Chinese supplies through the Indian Ocean.

The Chinese move at Doklam might have been prompted by India's aggressive military posture against Pakistan after Prime Minister Narendra Modi came to power. For the first time, India under PM Modi openly supported rebels in Pakistan's Balochistan who pose a serious threat to CPEC. Two Chinese citizens working on CPEC were abducted and killed by Baloch rebels two months ago.

A restive Balochistan is not the only challenge to CPEC.

CPEC passes through PoK, and that's why India had boycotted China's ambitious OBOR project. India has always laid claim to PoK but now it has also started talking of getting it back from Pakistan. Local leaders in PoK often speak favourably of India. India's surgical strikes on Pakistan-sponsored terrorists in PoK last year signaled its aggressive military stance and the will to dominate in the disputed region.

India's assertion in PoK and support to Baloch rebels are threats to CPEC. India's military dominance on Pakistan means CPEC may not materialise at all. By engaging India at Doklam, China might want to divert Indian military away from the Pakistan border and thus reduce the threat to CPEC.

CPEC is going to be the showpiece for China's OBOR project which it hardsells as a global economic partnership that can lift less-developed countries out of poverty.

OBOR has economic as well as strategic importance for China. It will not only provide China vast markets and ownership of infrastructure projects in dozens of smaller countries in Asia and Africa, but also offer strategic assets in host countries which, unable to repay expensive Chinese debt, will sooner or later submit to its plans.

India's military aggression against Pakistan—to check its sponsorship of terror in India—will ensure CPEC does not have a smooth going. If India remains engaged on the eastern front—at Doklam or any other similar spot— its focus will shift away from Pakistan and give China an opportunity to complete CPEC smoothly.

When Indian Army chief General Bipin Rawat said in June that India was ready for “two-and-a-half front war”—a war with Pakistan, China and terrorists within India—maybe he was responding to China's hidden ploy.

A major scuffle, which included stone-pelting, took place between Indian and Chinese soldiers along the Line of Actual Control at eastern Ladakh in the western sector on Tuesday. The confrontation between the rival soldiers took place on the north bank of the Pangong Tso (Tso means lake) in eastern Ladakh. This skirmish too could be part of the Chinese strategy to engage Indian military at different points to dilute its focus on Pakistan.

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Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 22 Aug 2017 16:42

A scary glimpse into how China's OBOR can ruin small countries - Economic Times
Four years ago, Sri Lanka built Mattala Rajapaksa International Airport (MRIA) in Hambantota, 250 km south from Colombo, with Chinese assistance of $190 million, more than 90 per cent of the total cost. Today, MRIA is running into losses and Sri Lanka is unable to pay back dues to China’s EXIM Bank.

Ironically, Sri Lanka has now decided to hand over the airport to India so that it can repay the Chinese loan.

Expect this scenario to unfold in dozens of small countries in Asia and Africa if China's ambitious On Belt One Road (OBOR) project becomes a reality. Touted as a global partnership by China, OBOR is actually an exploitative, colonial stratagem to gain vital assets in small countries.

The OBOR project will be a vast network of sea and land routes across dozens of countries. It will impact 4.4 billion people. China is said to be spending $1 trillion on it. It is not one project but six major routes which will include several railways line, roads, ports and other infrastructure. China claims these economic corridors will not only build infrastructure in countries that cannot afford to do it themselves but also boost global trade. Most of the countries in Asia and all of India's neighbours, except Bhutan, are willing to take part in the project.

The participating countries will benefit in terms of infrastructure and trade. OBOR can be an easy and fast way for many small countries to acquire important infrastructure projects which they cannot afford otherwise. But all this will come at a huge hidden cost.

China will lend money for OBOR projects to host countries at high rates of interest which the countries may not be able to repay. This can lead to China acquiring equity and then controlling stakes in these projects, getting a permanent footprint in several small countries which is nearly impossible for it to achieve otherwise.

What has happened in Sri Lanka is a dire warning for small countries against China's colonial advances wrapped in benign global treaties.

Not far from the loss-making airport built with Chinese loan is a vital link in the OBOR project—the deep-sea port of Hambantota. China recently got a 99-year lease for running the Hambantota Port.

But a wary Sri Lanka has made it clear to China that the port would not be used for any military activities.


The small country is running up huge financial losses owing to high interest rates charged by Chinese lenders for the mega infrastructure projects which will now be part of OBOR. China has provided Sri Lanka with over $5 billion between 1971 and 2012, and most of this has gone into infrastructure development.

Sri Lanka’s estimated national debt is $64.9 billion, of which $8 billion is owed to China—this can be attributed to the high interest rate on Chinese loans. For the Hambantota port project, Sri Lanka borrowed $301 million from China with an interest rate of 6.3%, while the interest rates on soft loans from the World Bank and the Asian Development Bank are only 0.25–3%.

Interest rates of India’s line of credit to the neighbouring countries are as low as 1%, or even less in some cases. Sri Lanka is facing debt crisis or a ‘debt trap’, as some scholars describe it.

Sri Lanka is currently unable to pay off its debt to China because of its slow economic growth. To resolve its debt crisis, the Sri Lankan government has agreed to convert its debt into equity. This may lead to Chinese ownership of the projects finally.

Sri Lanka's decision to hand over the loss-making airport to India is a move against China's tightening noose of debt.

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Re: OBOR, Chinese Strategy and Implications

Postby Philip » 23 Aug 2017 13:24

Perfect example! I've flown via Mattala ,not by choice.Had too as the UL flight from MAA went via Mattala.There is a Tamil word "muttal", (bumpkin) that describes perfectly the "brains" behind it. Lousy location wind-wise,no worthwhile population to generate seats,and less attractive resorts locally than at other destinations on the south coast,though beaches here offer more solitude. It was the dream of the megalaomaniac "muttal",ex-pres. Rajapakse,now gnashing his teeth and chafing at the nit,waiting to extract revenge for having lost the last pres. election. He go massive kickbacks form every deal with China,who cleverly added on their own hefty commission for themselves,making it approx 4 times more expensive to say lay 1KM of road. The terminal blgs. are now being used as godowns. How we're going to turn it around will require some ingenuity.I give below some options.

1.Send sev. long-distance AI flights via Mattala,inbound,to Colombo.These flights should be from N.India where pilgrim traffic is high.Shorter flights would lsoe money when compared with more direct alternatives to the island to and from the south of India.

2.Demand that an adjoining SEZ is set up for Indian biz. Use the airport for training purposes as well.Land is cheap and labour available locally,who would welcome employment. Unlike the Chinko plan to use openly their labour imported from China ,both prison labour and military cadre posing as civvies.

3.Open a flight training school as well. It could be sued for basic training rookie pilots including jets. The scope of this should be examined by experts as there is going to be a huge demand for pilots in India as the airlines and passr. traffic expands.

4.The most venerated Hindu temple in Sri Lanka at Kataragama is located close to H'tota. It is the most popular shrine in the entire country,visited by Lankans belonging to all religions,a v.mystic place.I've also been to the temple.There would be good pilgrim traffic from India ,who could also visit sites connected with the Ramayana,plus for wild life enthus,the Yala National park is close by.Visit it before the Chinese poach it all!

5.Smaller prop. aircraft like ATRs and smaller,could fly a tourist network or "quadilateral": Colombo-Jaffna-Trinco-Batticaloa-Mattala-Koggala (Old WW2 airstrip ,south of Galle opposite beach resorts )-Colombo.This would serve the tourist industry very well.

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Re: OBOR, Chinese Strategy and Implications

Postby sum » 23 Aug 2017 14:48

Ironically, Sri Lanka has now decided to hand over the airport to India so that it can repay the Chinese loan.

What will India do with this airport? :-?

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Re: OBOR, Chinese Strategy and Implications

Postby pankajs » 23 Aug 2017 14:56

I don't know but there are a couple of things we could do. I am going full chanikyan here so bear with me.

1. Airports have Radars to function. That data could be crucial in certain scenarios. Perhaps we could install a few more that can do more than Air Traffic control.
2. This airport is close to the port. Can be used to monitor the goings at the port and the surrounding area.
3. Install beacons that can accurately spot and guide an IAF jet or a missile to the area in around the airport .. more like the lighthouses of olden times but this time used to home in to the port rather than avoid. This is right out of my .. you get it.
4. Perhaps allow quick deployment of special forces in very very rare emergencies i.e. Unknown unknown scenarios. Again out of my ...

Will need to check the location of the airport wrt the sea port. Anybody has the map?

This is apart form its commercial function. Can be used to enhance tourism, especially religious tourism to and from India.

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Re: OBOR, Chinese Strategy and Implications

Postby pankajs » 23 Aug 2017 15:15

20 Km from the port as the crow flies.

https://www.google.co.in/maps/dir/''/Ma ... d6.2919196

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Re: OBOR, Chinese Strategy and Implications

Postby Philip » 23 Aug 2017 15:36

Any deal will come with no-mil clauses,just as the agreement over the port has in it.But then Chinko merchantmen,"trawlers" will be apart of its intel network at sea,esp. during a crisis .It is the accompanying "10,000 hectares " of land being gifted to the Chinese for 99 yrs. That is the problem.China will set up an SEZ that is virtually foreign territory fr its industries and import tens of thousands of Chinese to run the show.A large % of them will have a mil background.Clandestine mil activity may take place in support of the PLAN. There is strong local opposition to this deal and the last word hasn't yet been said.Expect some trouble created by none other than Rajapakse,this time against the land allocation! He will use any burning issue to try and regain power in the Lankan parliament.Local elections are due,and the grapevine has it that he may make good gains thanks to the ruling JV's laxity in punishing him and his regime for their massive corruption,human rights,etc.,and the high cost of living that it skyrocketing in the island with Gulf remittances slowing down.

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Re: OBOR, Chinese Strategy and Implications

Postby samirdiw » 23 Aug 2017 21:52

Why didn't Sri Lanka have the Chinese build Hambanthotta using BOOT (build own operate transfer) from the outset itself instead of going for debt? It could have perhaps got better terms than the 99 years/70% now. Why take all this risk? A lot of the infrastructure built inside China is using this method.

Build-own-operate-transfer (BOOT)
A form of concession where a private party or consortium agrees to finance, construct, own, operate and maintain a facility for a specific period and transfer the facility to the concerned government or port authority after the term of the concession. The ownership of the concession area (port land) vests in the private party or consortium during the entire concession period and is transferred to the government or port authority at the end of the concession period. As with the BOT, the concessionaire bears the commercial risk of operating the facility.

Here if the Chinese had shown a large port activity that enticed the Srilankans then the number of years they hold the port would have been much less - say 20 years. If they showed low returns in order to hold the port for longer period then Sri Lanks might not have gone for the project

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Re: OBOR, Chinese Strategy and Implications

Postby Aditya_V » 23 Aug 2017 22:27

Still can't understand why we should take up the airport


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Re: OBOR, Chinese Strategy and Implications

Postby Guddu » 01 Sep 2017 03:14

The more that China spends on CPEC, the more they get involved in Paki economy, the harder it becomes for India to take back POK. At some point it becomes a fait accompli, that the Chinese will control POK. I think the clock is ticking for India, and we need to do everything we can to disrupt CPEC now. Dont see that India is doing much to that.

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Re: OBOR, Chinese Strategy and Implications

Postby ashish raval » 01 Sep 2017 11:57

I think India should sign free trade deals with all the nations that OBOR passes through and utilise it by asking Indian businesses setup massive storage facilities on both side of OBOR and piggy back without getting explicitly involved. In this way India could avoid back breaking maintenance and joining requirements and still can use roads in respective nations. :mrgreen:

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 01 Sep 2017 12:13

ashish raval wrote:I think India should sign free trade deals with all the nations that OBOR passes through and utilise it by asking Indian businesses setup massive storage facilities on both side of OBOR and piggy back without getting explicitly involved. In this way India could avoid back breaking maintenance and joining requirements and still can use roads in respective nations. :mrgreen:


India will cut it's own throat by doing such a foolish thing.

The hans will simply repackage their shoddy goods as local and flood the Indian market.

Free trade is what they have wanted from India all the while and you will have given them a one way ticket.

WTF should India get involved in the OBOR??

In which world do you imagine that India wants to be part of the OBOR??

If so, would Modi not have simply joined directly without any fuss?? Who would have stopped him??

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Re: OBOR, Chinese Strategy and Implications

Postby chola » 01 Sep 2017 12:36

ashish raval wrote:I think India should sign free trade deals with all the nations that OBOR passes through and utilise it by asking Indian businesses setup massive storage facilities on both side of OBOR and piggy back without getting explicitly involved. In this way India could avoid back breaking maintenance and joining requirements and still can use roads in respective nations. :mrgreen:


It would take a page from the PRC's own strategy book.

All of Cheen's enemies contribute to the PRC's wealth and power through trade. In fact, those that are its main opponents over the years -- Japan, Taiwan, Vietnam, South Korea and the US -- are the most tied up with Cheen through trade and tourism. India too contributes to Cheen's wealth though we are less integrated to its markets and supply chains than the above.

I wrote for years that there is no reason why we can't take advantage of the Cheen market when Japan or Taiwan can and those countries take constant heat from chini warships and planes at a level far greater than what we put up with. The fact that A Khan's so-so flick Dangal can earn over $200M in the PRC (about three times as much as in India) tells us a lot about the market potential. And also a lot about the chini attitude (at least among its general population) toward Indian products. I doubt we would ever have a Bollywood film making even $20M in the US or UK.

It would take the same kind of balls and chanakyan strategy that the PRC displayed when they allowed Japan, SoKo and Taiwan to build out its ports, warehouses and manufacturing ecosystem. Without that investment from its frenemies, Cheen would never have taken off and be in the position to even attempt something like OBOR.

Still I wouldn't want any change on our position on OBOR so soon after Doka La. It would seem like a fvcking concession. But possible that this could happen with Modi in the PRC at the BRICS conference.

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Re: OBOR, Chinese Strategy and Implications

Postby ashish raval » 02 Sep 2017 02:46

chetak wrote:
ashish raval wrote:I think India should sign free trade deals with all the nations that OBOR passes through and utilise it by asking Indian businesses setup massive storage facilities on both side of OBOR and piggy back without getting explicitly involved. In this way India could avoid back breaking maintenance and joining requirements and still can use roads in respective nations. :mrgreen:


India will cut it's own throat by doing such a foolish thing.

The hans will simply repackage their shoddy goods as local and flood the Indian market.

Free trade is what they have wanted from India all the while and you will have given them a one way ticket.

WTF should India get involved in the OBOR??

In which world do you imagine that India wants to be part of the OBOR??

If so, would Modi not have simply joined directly without any fuss?? Who would have stopped him??


We can't stop flooding Chinese product even now and you are saying that they can flood even more. Can you enlighten me on that? Do we have consumption beyond 200 billion in our country for any products let alone Chinese? What are we importing from any other nations except China that China can replace - nothing? Whatever China could grab it has already done.

First 40 countries make up 98 percent of our import and China has lions share of approximately 20 percent of them. They have peaked in terms of what they can export to us while we have not even scratched the surface of what we can export to them. I doubt we can consume anything beyond a point of what China floods..

Where did I said India should be part of OBOR. I said we can have our cake and eat it by thinking laterally on how we can access Chinese roads without necessarily paying or taking part in it or getting policially engaged into it. OBOR will happen with or without India in it and that is a fact we cannot shy away so why not engage in chanakiyan way and find vulnerability and get best out of it? No matter what we think we are two decades away from being tagged developed so I would want India to access every part of the globe without much political baggage..if you really read between the lines what I want to say is that Indian business should really be first to establish presence in markets where China is doing donkey work and establish presence and intelligence apparatus on ground.

With regard to flooding Indian market, it takes someone 5 minutes to register a company in singapore, import stuff from China and send it to India..

There are umpteen ways to flood a market if you choose to there is really no way of stopping it.

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Re: OBOR, Chinese Strategy and Implications

Postby ashish raval » 02 Sep 2017 02:58

chola wrote:
ashish raval wrote:I think India should sign free trade deals with all the nations that OBOR passes through and utilise it by asking Indian businesses setup massive storage facilities on both side of OBOR and piggy back without getting explicitly involved. In this way India could avoid back breaking maintenance and joining requirements and still can use roads in respective nations. :mrgreen:


It would take a page from the PRC's own strategy book.

All of Cheen's enemies contribute to the PRC's wealth and power through trade. In fact, those that are its main opponents over the years -- Japan, Taiwan, Vietnam, South Korea and the US -- are the most tied up with Cheen through trade and tourism. India too contributes to Cheen's wealth though we are less integrated to its markets and supply chains than the above.

I wrote for years that there is no reason why we can't take advantage of the Cheen market when Japan or Taiwan can and those countries take constant heat from chini warships and planes at a level far greater than what we put up with. The fact that A Khan's so-so flick Dangal can earn over $200M in the PRC (about three times as much as in India) tells us a lot about the market potential. And also a lot about the chini attitude (at least among its general population) toward Indian products. I doubt we would ever have a Bollywood film making even $20M in the US or UK.

It would take the same kind of balls and chanakyan strategy that the PRC displayed when they allowed Japan, SoKo and Taiwan to build out its ports, warehouses and manufacturing ecosystem. Without that investment from its frenemies, Cheen would never have taken off and be in the position to even attempt something like OBOR.

Still I wouldn't want any change on our position on OBOR so soon after Doka La. It would seem like a fvcking concession. But possible that this could happen with Modi in the PRC at the BRICS conference.


Indeed if GoI puts brains and resources thinking how they can take advantage of China economically it will come up with umpteen ways to exploit their market. The question is finding a hole which is a painstaking task but not impossible. I am not saying change of position on OBOR just implying take advantage without necessarily doing donkey work on ground or staying politically where we are now. After all there is no point in doing nothing about it, right!! In other words sabotage things in OBOR, exploit OBOR and shift blame on small eyes for everything bad going in those nations by controlling their media and enjoy the movie :mrgreen:

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Re: OBOR, Chinese Strategy and Implications

Postby chola » 02 Sep 2017 08:07

Wall Street blue chips are already making a mint from OBOR.

Waiting and hoping for this thing to fail is not really a strategy. Formulate a fvcking plan to sabotage it (really can only do that through war) or profit from it.

https://www.economist.com/news/business/21725810-general-electric-got-23bn-orders-infrastructure-project-last-year-western-firms

Western firms are coining it along China’s One Belt, One Road
General Electric got $2.3bn in orders from the infrastructure project last year

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 02 Sep 2017 08:19

ashish raval wrote:
chetak wrote:
India will cut it's own throat by doing such a foolish thing.

The hans will simply repackage their shoddy goods as local and flood the Indian market.

Free trade is what they have wanted from India all the while and you will have given them a one way ticket.

WTF should India get involved in the OBOR??

In which world do you imagine that India wants to be part of the OBOR??

If so, would Modi not have simply joined directly without any fuss?? Who would have stopped him??


We can't stop flooding Chinese product even now and you are saying that they can flood even more. Can you enlighten me on that? Do we have consumption beyond 200 billion in our country for any products let alone Chinese? What are we importing from any other nations except China that China can replace - nothing? Whatever China could grab it has already done.

First 40 countries make up 98 percent of our import and China has lions share of approximately 20 percent of them. They have peaked in terms of what they can export to us while we have not even scratched the surface of what we can export to them. I doubt we can consume anything beyond a point of what China floods..

Where did I said India should be part of OBOR. I said we can have our cake and eat it by thinking laterally on how we can access Chinese roads without necessarily paying or taking part in it or getting policially engaged into it. OBOR will happen with or without India in it and that is a fact we cannot shy away so why not engage in chanakiyan way and find vulnerability and get best out of it? No matter what we think we are two decades away from being tagged developed so I would want India to access every part of the globe without much political baggage..if you really read between the lines what I want to say is that Indian business should really be first to establish presence in markets where China is doing donkey work and establish presence and intelligence apparatus on ground.

With regard to flooding Indian market, it takes someone 5 minutes to register a company in singapore, import stuff from China and send it to India..

There are umpteen ways to flood a market if you choose to there is really no way of stopping it.


one cannot flood the Indian market with cheap stuff without the very active connivance of Indian small time businessmen. A visit to any wholesale market in India will show you how much junk is being imported in the name of business.

A chat with these businessmen will surprise you as to how many times they visit china to make deals for shitty stuff. All this leads to payment in dollars which is an expense that India just cannot afford.

India has to regulate and control junk coming into the Indian market from china in the name of trade.

If India has to spend hard currency, let it not be on junk that has no market elsewhere.

No taxes are paid and often hundreds of containers with chinese junk pass through Indian customs on the say so of curropt customs officials.

Even today, no GST is being paid. Someone has to correlate dollar payments to the imports and sale of junk to arrive at which businessman is paying through the hawala route or funding through benami accounts in the gelf.

No one does because everyone is busy wetting their beaks.

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Re: OBOR, Chinese Strategy and Implications

Postby Chandragupta » 02 Sep 2017 10:52

chetak wrote:
ashish raval wrote:
We can't stop flooding Chinese product even now and you are saying that they can flood even more. Can you enlighten me on that? Do we have consumption beyond 200 billion in our country for any products let alone Chinese? What are we importing from any other nations except China that China can replace - nothing? Whatever China could grab it has already done.

First 40 countries make up 98 percent of our import and China has lions share of approximately 20 percent of them. They have peaked in terms of what they can export to us while we have not even scratched the surface of what we can export to them. I doubt we can consume anything beyond a point of what China floods..

Where did I said India should be part of OBOR. I said we can have our cake and eat it by thinking laterally on how we can access Chinese roads without necessarily paying or taking part in it or getting policially engaged into it. OBOR will happen with or without India in it and that is a fact we cannot shy away so why not engage in chanakiyan way and find vulnerability and get best out of it? No matter what we think we are two decades away from being tagged developed so I would want India to access every part of the globe without much political baggage..if you really read between the lines what I want to say is that Indian business should really be first to establish presence in markets where China is doing donkey work and establish presence and intelligence apparatus on ground.

With regard to flooding Indian market, it takes someone 5 minutes to register a company in singapore, import stuff from China and send it to India..

There are umpteen ways to flood a market if you choose to there is really no way of stopping it.


one cannot flood the Indian market with cheap stuff without the very active connivance of Indian small time businessmen. A visit to any wholesale market in India will show you how much junk is being imported in the name of business.

A chat with these businessmen will surprise you as to how many times they visit china to make deals for shitty stuff. All this leads to payment in dollars which is an expense that India just cannot afford.

India has to regulate and control junk coming into the Indian market from china in the name of trade.

If India has to spend hard currency, let it not be on junk that has no market elsewhere.

No taxes are paid and often hundreds of containers with chinese junk pass through Indian customs on the say so of curropt customs officials.

Even today, no GST is being paid. Someone has to correlate dollar payments to the imports and sale of junk to arrive at which businessman is paying through the hawala route or funding through benami accounts in the gelf.

No one does because everyone is busy wetting their beaks.


Yes absolutely. I posted on similar lines in GDF. China's actual imports to India must be 10x of the reported amount. Any small time wholesaler anywhere in India has access to hawala. I run a small electronics manufacturing startup and I know how much it hurts people like us when cheap under invoiced chinese junk kicks us off the shelves.

The greed of our countrymen knows no bounds. You have to see what people are importing, even toothpaste & shaving creams for crying out loud! And this is apart from the fact that 90% of anything thats made from plastic has come from China even if it has a 'Made in India' tag stamped onto it.

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Re: OBOR, Chinese Strategy and Implications

Postby ashish raval » 02 Sep 2017 12:02

Well this issue of non compliance can be easily be solved by constituting multiple agencies being constituted under prime minister to check the fraud and corruption. The idea is person can know people in 1,2 or 5 agencies but not 10 agencies and eventually someone in one of the agencies will leak things to press and cops will be pressured to act including central agencies. There should be multiple agencies doing checks and making a person bankrupt and taking them to court of multiple counts adding years to meager jail sentence being extended to atleast 20 years.

We need massive change in judiciary and government to take care of this.

If there is corruption really 20 years behind bars is the only solution to deter.

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 02 Sep 2017 12:12

ashish raval wrote:Well this issue of non compliance can be easily be solved by constituting multiple agencies being constituted under prime minister to check the fraud and corruption. The idea is person can know people in 1,2 or 5 agencies but not 10 agencies and eventually someone in one of the agencies will leak things to press and cops will be pressured to act including central agencies. There should be multiple agencies doing checks and making a person bankrupt and taking them to court of multiple counts adding years to meager jail sentence being extended to atleast 20 years.

We need massive change in judiciary and government to take care of this.

If there is corruption really 20 years behind bars is the only solution to deter.


not in this lifetime.

every sleazy bugger that you have mentioned above, judiciary included, is interested in wetting his own beak.

ultimately all such idealist ideas end like this, fit for the dust bin. impracticable and undoable.

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Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 02 Sep 2017 12:47

Japanese PM Shinzo Abe's India visit to see Asia-Africa Growth Corridor launch - Dipanjan Roy Chaudhury, Economic Times
Japanese Prime Minister Shinzo Abe’s mid-month India visit for an annual summit will see the launch of Asia-Africa Growth Corridor (AAGC), an initiative seen as providing an alternative to the One-Belt-One-Road (OBOR) initiative of China.

Asia-Africa Growth Corridor (AAGC) is a development cooperation initiative envisaged to link the two continents. The agreement entails development and cooperation projects, quality infrastructure and institutional connectivity, enhancing capacities and skills and people-to-people partnerships.

Prime Minister Narendra Modi and Abe will outline the vision of the AAGC during the three-day summit that starts on September 13. The initiative is being widely seen as an attempt to balance Beijing’s efforts to expand its geopolitical influence in Asia and Africa, particularly through OBOR cross-continental connectivity initiative.


"We would naturally like the initiative (Asia-Africa Growth Corridor) to be based on universally recognised international norms, good governance, rule of law, openness, transparency and equality,” Foreign Secretary S Jaishankar had said at a consultative meeting of AAGC here last week. One of the reasons India stayed away from the OBOR Summit in May was that China did not hold any consultation with India and, therefore, the initiative lacked transparency.

"There must be a strong sense of local ownership, which can only happen with consultative project designing, transfer of technology and encouragement of skills,” Jaishankar had said at the meeting organised by the Research and Information System (RIS) for Developing Countries, a think-tank under the external affairs ministry.

India has been opposing the China-Pakistan Economic Corridor (CPEC), the flagship project under OBOR. The CPEC is proposed to pass through Pakistan occupied Kashmir. Delhi has been accusing Beijing of infringing on sovereignty of India by joining Pakistan for the CPEC. "Our activities must fully conform to balanced ecological and environmental protection and preservation standards. And, I am compelled to add, respect for sovereignty and territorial integrity,” the foreign secretary said.

Tokyo, while participating in the OBOR Summit, had adopted a cautious approach, but its troubledties with China over territorial matters has cast a shadow over its participation in the OBOR initiative, which has, of late, also been criticised for putting the smaller participating nations at the risk of being caught in a debt trap.

"No less important is ensuring of financial responsibility, so that there is no encouragement of unsustainable debts,” Jaishankar said.


The trouble is that both India & Japan are known to take a long time for project implementation while the Chinese act very, very quickly.

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Re: OBOR, Chinese Strategy and Implications

Postby arun » 04 Sep 2017 13:07

Xposted from the “Neutering & Defanging Chinese Threat (09-08-2014)”.

India has sucessfully kept out of the BRICS Xiamen declaration any endorsement for pet intiatives of the Peoples Republic of China namely the One Belt One Road (OBOR) and Belt and Road Initiative (BRI).

Despite Peoples Republic of China pre Xiamen BRICS meet fulminations opposing India bringing up of Islamic Republic of Pakistan sponsored Mohammadden Terrorism at the BRICS meet, India has sucessfully got the BRICS Xiamen declaration that the Peoples Republic of China was hell bent on blocking, to mention of Mohammadden Terrorism emanating from the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan by getting the declaration to include Mohammadden Terrorist groups originating in the Islamic Republic such as India Centric Lashkar-e-Taiba (LeT), Jaish-e-Mohammad (JeM) included. Other Islamic Republic of Pakistan resident Mohammadden Terrorist groups included are the Haqqani Network. The fly in the onitment is that undoubtedly owing to the PRC going to bat for Iron Brother Pakistan, the Tehreek e Taliban Pakistan (TTP) was also included not to mention the PRC’s Mohammadden bogeyman, Eastern Turkistan Islamic Movement (ETIM). See 48.

Full text of BRICS Leaders Xiamen Declaration from our MEA’s website:

BRICS Leaders Xiamen Declaration

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Re: OBOR, Chinese Strategy and Implications

Postby arun » 04 Sep 2017 14:35

Earlier at one of the percursor meetings leading up to the Xiamen meet, the one at Fuzhou, the Peoples Republic China had tried real hard to get BRICS endorsement of Bridge & Road Initiative aka BRI but was stonewalled by India.

That stonewalling seems to have carried though to Xiamen and India has ensured that there is no suggestion that BRICS endorsed pet Peoples Republic of China intiative of Bridge and Road Innitiative (BRI) and One Road One Belt (OBOR).

Bravo India:

The Hindu has learnt that at a conference of the political parties, think-tanks and civil society groups of the BRICS countries held in Fuzhou, Indian and Chinese delegates failed to arrive at a consensus that the five emerging economies should formally support the BRI. Brazil, Russia and South Africa are the other members in the BRICS grouping. The Fuzhou conference, organised by the Communist Party of China, is widely seen as an important component in framing the outcome of the BRICS summit, which will be held in the Chinese coastal city of Xiamen.
The differences between the two delegations became evident when the text of the Fuzhou Initiative, released at the end of the conference, was changed, on the insistence of India.

‘Great significance’

Paragraph 14 of the first document’s first version had commended “the Belt and Road Initiative proposed by China” for its “great significance for achieving development in developing countries…” However, since a consensus could not be achieved, the entire paragraph was dropped in the final version, which was finally adopted at the conference. A source privy to closed door deliberations, which resulted in recommendations for the BRICS summit as a separate “outcome” document, said that Indian side, nevertheless, expressed its willingness to support individual connectivity projects, provided they were not tied up with the BRI.

India had boycotted last month’s Belt and Road Forum, hosted by China for promoting the BRI.


Dating back to June 20, 2017, from here:

India objects to BRICS supporting China’s BRI

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Re: OBOR, Chinese Strategy and Implications

Postby DavidD » 05 Sep 2017 11:35

Not directly related to OBOR, but you can see some of the goals of it being achieved. The end goal for OBOR isn't about making money from loans, roads, or powerplants, etc. The end goal is to construct an economic order with China as an integral part. With that will come political leverage as well. They won't be drawn to China's orbit because they owe China money, because worse comes to worst they can always default or inflate their way out of debt. They'd be drawn to China's orbit because everything they make and consume will need to pass through China some point along the way.

https://finance.yahoo.com/news/despite- ... nance.html

Despite strains, Vietnam and China forge closer economic ties

Reuters
By My Pham and Matthew Tostevin

HANOI (Reuters) - Tensions are high on the South China Sea as Vietnam faces off against China over their overlapping maritime claims.

But for the boatmen on the junks cruising the calm expanse of Vietnam's Ha Long Bay, another growing Chinese presence in the region is very welcome indeed.

"More than half our tourists are Chinese now," said Nguyen Van Phu, 33, who has spent six years working on the boats that chug between the bay’s spectacular stone towers. "If they stopped coming it would be a big problem, if not a disaster."

The number of Chinese tourists in Vietnam has surged this year, just one sign of the growing economic ties between two long-time enemies. Chinese investment in Vietnam is also increasing rapidly, as is trade between the two countries.

But while tourists, trade and investment are being welcomed, they also present a challenge for a fiercely independent country like Vietnam, which has been wary of China’s growing influence in the region.

"The rising economic dependence on China makes it more difficult for Vietnam to decide how far to confront China on the South China Sea," said Nguyen Khac Giang, a researcher at the Vietnam Economics and Policy Research Institution.

Vietnam would suffer far more than China economically in the event of political instability given its smaller size, he said.

China exports more goods to Vietnam than any other country in Southeast Asia, sending textiles to be made into shirts and sneakers, and electronic components for mobile phones and large flat-panel displays. Those completed products are exported around the world, as well as back to China.

Vietnam also makes electronics components for factories in China, and exports computers for Chinese consumers.

Manufacturers see Vietnam as an attractive base, with wages as little as a third of those in coastal regions of China, according to employment consultants.

And while proximity has historically been a source of friction between the two countries - they fought a border war as recently as 1979 and armed clashes flared for years afterwards - for manufacturers it's a boon.

"We strategically invested in Vietnam because of its geographical advantage – closer to China and hence lower cost on materials, transportation and relatively shorter production lead time," said Bosco Law, chief executive of the Hong Kong-based Lawsgroup. The company makes clothes for brands such as Gap, whose global operations include scores of outlets in China.

Businesses contacted by Reuters declined to talk openly about the risks for them of tension between Vietnam and China.

Chinese trade and investment has surged across Southeast Asia in recent years as companies search out new bases for manufacturing and consumers for their goods.

China has also invested in infrastructure and plans to pour development funds into Southeast Asia as part of its sprawling Belt and Road initiative.

That has already had a political effect.

Big recipients of Chinese investment such as Cambodia and Laos are promoting China's line on the South China Sea at regional meetings.

President Rodrigo Duterte of the Philippines, meanwhile, has cited Chinese investment pledges as he softens his country's stance on its maritime disputes with China.

MISTRUST

Tensions between Beijing and Hanoi have been high since mid-June, when Chinese pressure forced Vietnam to suspend oil drilling on a block that overlaps the line China says marks its claim to almost all the South China Sea.

As Vietnam has emerged as the most vocal regional opponent of China's maritime claims in Southeast Asia, it has drawn Beijing's ire. Its growing defense links to the United States, Japan and India also make China suspicious.

The Vietnamese government has also had to contend with public pressure at home. A row over Chinese oil drilling in disputed waters in the South China Sea in 2014 sparked anti-China riots in Vietnam in which foreign factories thought to be Chinese were set on fire, before the rig was removed.

Tourism dipped in the aftermath, but quickly bounced back. Trade has also risen steadily since then.

Exports to China jumped nearly 43 percent to $13 billion in the first half of 2017 from a year earlier, according to customs data. Imports rose more slowly, climbing 16 percent.

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Re: OBOR, Chinese Strategy and Implications

Postby Viv S » 05 Sep 2017 12:05

DavidD wrote:Not directly related to OBOR, but you can see some of the goals of it being achieved. The end goal for OBOR isn't about making money from loans, roads, or powerplants, etc. The end goal is to construct an economic order with China as an integral part. With that will come political leverage as well. They won't be drawn to China's orbit because they owe China money, because worse comes to worst they can always default or inflate their way out of debt. They'd be drawn to China's orbit because everything they make and consume will need to pass through China some point along the way.

The economic interdependence exists because China is major industrial centre within a globalized economy. Aside from a possible general increase in trade through better infrastructure, there is no direct relationship with OBOR. Clearly evidenced by your article - there are no major OBOR projects planned in Vietnam.

The drivers for the BRI are quite obvious. China is a capital surplus country, most of its partners in the project are capital deficit. China has spent the last 20-30 years creating infrastructure at a breakneck pace but has hit a wall, in that the process is mostly done (further investment in less economically viable projects is a major debt liability), but surplus capacity still exists. Meanwhile most of its clients badly need better infrastructure. Any political advantages are mostly incidental.

Symbiotic relationship? Not entirely. Most public matters suggests that the infrastructure is being created with Chinese workers & Chinese engineers using equipment and machinery imported from China, while the client state underwrites the financial risk albeit with interest subsidies from China. There is relatively little focus on developing domestic industrial capacities or local human resources.

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Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 13 Sep 2017 17:09

Chennai-Vladivostok sea route: India's effort to counter China's OBOR could soon get a big Russian helping hand - Dipanjan Roy Chaudhury, Economic Times
Aiming to put in place a key maritime route connecting India with Northeast Asia and Western Pacific region Delhi is contemplating to put in place a major connectivity initiative — direct shipping link between Chennai and Vladivostok amid China’s ambitious Maritime Silk Route (MSR) connecting Asia with Africa.

With India making concrete moves to expand its presence in Far East Russia to harness natural resources as evident through Foreign Minister Sushma Swaraj’s visit to Vladivostok last week plans are in making for a maritime link connecting Chennai with the key Russian port on the Pacific. This shipping link would enable to transfer cargo between Chennai and Vladivostok in 24 days in comparison to over 40 days currently taken to transport goods from India to Far East Russia via Europe, according to experts on the subject.

This proposed maritime route which could be transformed into a corridor could juxtapose with Indo-Japan Pacific to Indian Ocean Corridor amid Beijing’s OBOR of which MSR is a part – virtually connecting entire SE Asia through road, shipping and rail links.

Swaraj met top Russian Ministers from Putin’s cabinet – Foreign Minister Sergey Lavrov, Industry Minister Denis Manturov, Natural resources Minister Sergei Donskoi and Deputy PM & President’s envoy for Far East Yury Trutnev besides governors of provinces in the region to further India’s role amid Moscow’s aim to diversify options besides China. South Korean President and Japanese PM were present at the Far East Forum that saw senior level representation (Swaraj) from India for the first time. Few months back Russia announced visa-free entry for Indians in its Far East.

On the occasion Swaraj also launched Russia Desk for facilitating Russian investments into India as assured by PM Narendra Modi during the annual summit in St Petersburg in June. This is the 3rd such Desk in India after Japan and Korea. Russia Desk would provide complete support service for any kind of Russian investment/ Businessmen/ from legislative to taxation; from personnel to finding right partner, according to informed officials.

The Far Eastern Federal District (twice the size of India) is the largest but the least populated of the eight federal districts of Russia, with a population of roughly 6.3 million. Russian affairs experts who did not wish to be identified indicated to ET that Moscow is sensitive to growing Chinese presence in Russia's Far-eastern region particularly increasing population from China which are settling there. "This pattern could change demographics of Far-east Russia and growing presence of other countries including India will help to bring balance," pointed out an expert.

India was the first country to establish a resident Consulate in Vladivostok in 1992. Current engagement of India with the region is limited to isolated pockets such as the Irkut Corporation in Irkutsk where the Mig and Sukhoi aircraft are built and over USD 6 billion worth of investments by ONGC Visesh Limited in the Sakhalin 1 project, according to persons familiar with the issue.


The region has a wealth of natural resources such as land, timber, mineral and other resources like tin, gold, diamonds and oil and natural gas. The Russian government has announced several initiatives to attract investments in the region, including an agricultural SEZ, the Vladivostok Free Port Project and also invites participation in the timber industry , mining of the huge mineral resources (coal & diamonds) and precious metal deposits (gold, platinum, tin and tungsten).

Opportunities for collaboration for Indian companies include in such sectors as agriculture, mining, port development and infrastructure, diamond processing, agro-processing.

Image

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 14 Sep 2017 20:00

The Gwadar Port Disillusion



The Gwadar Port Disillusion
MEI XINYU
DATE: TUE, 04/11/2017

(Yicai Global) April 11 -- Pakistan’s Gwadar Port, a Chinese construction project, officially opened in November last year. It is undoubtedly a landmark project in trade ties between the countries and a key part of the China-Pakistan Economic Corridor. As the home of the port’s operating company, China hopes the port will play an important role in Pakistan’s sustainable development. However, the port has no links to China’s energy imports, both security and economic issues prevent the creation of the proposed China-Pakistan Oil and Gas Pipeline.

Advocates of the oil and gas line claim that resources from the Persian Gulf could be shipped to Gwadar Port and transported to China by land, shedding 85 percent of the distance covered by sea-only transport. The line could also break the ‘Malacca Dilemma,’ that casts a shadow over the security of China’s energy imports. Around Chinese New Year in 2015, an article titled Pakistan’s Third Largest Port Will Open in April, Shortening the Oil Transport Distance to China by 85 Percent spread online. The basic premise and conclusions of the argument were misleading. In fact, the Middle East-Gwadar-China transport route for gas and oil is unreasonable, both in terms of security and economic efficiency.

No Business Value

The conceptual error in the premise of this article’s argument, that “the pipeline shortens the oil and gas transport distance from the Persia Gulf to China by 85 percent”, lies in how it ignores the vast size of China and its unbalanced regional development. Its population, economic activity, and oil and gas consumption are mostly distributed around the eastern coast and central regions, far from Xinjiang. It also translates the arrival of resources shipped from the Persian Gulf to China as reaching the country’s major consumer market. If the oil and gas shipped to Xinjiang’s Kashi city through Gwadar Port, it still needs to travel between 4,000 and 6,000 kilometers by rail to reach China’s more populous areas. The actual transport distance could never be cut by as much as 85 percent.

At the same time, it also replaces low-cost, large-capacity sea transport with expensive land transport. The whole concept of the pipeline is inefficient, and that’s without considering the increased security costs. After building the required infrastructure, even for the pipelines built in regions with simple terrain conditions, the return on investment would be lower than when transporting by sea. For example, with a USD2 billion investment in pipelines, 1,000 kilometers of line could be built, transporting 30 million tons annually. If the same amount was injected into marine transport, 20 very large crude oil carriers could be built, transporting 40 to 60 tons a year and resulting in more liquid assets.

China has a complete fundamental infrastructure to transport oil and gas by sea, but such groundwork for the pipeline would be built from scratch. A stable electricity supply can’t even be guaranteed in the host country, Pakistan, a problem which is yet to be solved by a series of power generation projects under the China-Pakistan Economic Corridor framework. The pipeline would require ultra high-power pump stations as it has to pass through the Karakoram Pass, at an altitude of 5,000 to 6,000 meters above Gwadar and Kashi. Add in heating and insulation required for the section of piping on the plateau and the required investment climbs further.

After entering China, the pipeline section from Kashi to the major consumer markets in China has to travel thousands of kilometers through the Gobi Desert, where construction costs are much higher than the plains.

In terms of transport costs, the proposed China-Pakistan Oil and Gas Pipeline cannot compare to marine transport routes. Japanese scholars once described the transport costs of modern very large crude oil carriers as being so low that Saudi Arabian crude oil and be shipped to Japan at zero cost, and the Persian Gulf could be considered a ‘local’ oilfield to Japan. With today’s shipping costs, the same holds true for the east of China.

It costs just USD1.25 a barrel to ship oil 7,000 kilometers from Saudi Arabia’s Ras Tanura to Ningbo, in China’s eastern province of Zhejiang, according to The Reality and Strategic Consequences of Seaborne Imports: China’s Oil Security Pipe Dream, a research report from February 2010. Considering a ton as seven barrels, that’s USD8.75, or just over CNY60 based on exchange rates from November 2016. If oil and gas from Africa’s east coast could also be sent to China, it would come at a similar price. In contrast, the report forecast the cost of the CPOGP raising transport costs by USD100 per ton.

Combined with the costs of pushing oil from Xinjiang to China’s main consumer markets, the transport costs come in at nearly CNY1,000 a ton, more than 16 times the cost of sea transport from Saudi Arabia to Ningbo. Using figures from last November, Brent crude oil futures were USD49.09 a barrel. Counting seven barrels as a ton, that comes in at CNY2,363 per ton. Using the pipeline, transportation costs are around 42 percent of the selling price of crude oil, compared to just 2.5 percent when transporting by sea. The competitive advantage of shipping is quite apparent.

Also, with the growth of America’s oil and gas exports and the opening of the Panama Canal expansion, global trade routes have quietly shifted. As well as bringing in oil from the Persian Gulf and Africa, China’s eastern ports can accept oil and gas from the US and Venezuela with competitive transport costs. Brazilian subsalt oil and gas may also be used to enhance facility utilization and cut costs.

Venezuela’s oil reserves are larger than Saudi Arabia’s, and the Brazilian subsalt oil field is regarded as the world’s largest oil discovery of the millennium to date, with conservative estimates suggesting its home to around 50 billion barrels. There is a 90 percent chance its usable reserves could reach 176 billion barrels and a 10 percent possibility there is as much as 273 billion barrels, according to the Universidade Federal do Rio de Janeiro’s Oil and Gas Research Center, who gave those figures in 2015.

In its 2013 Outlook for World Energy, the International Energy Agency forecast that by 2035, Brazilian oil production would account for one-third of global supply. If the Nicaragua Canal is completed, transportation costs would be even more competitive, with the Gwadar route paling in comparison.

Concerns Over Strategic Value

From a security viewpoint, the Malacca Dilemma is a pseudo-concept, to a great extent. This concept was originally proposed in Japan during the Cold war. At that time, its oil and gas supply was highly dependent on the Persian Gulf, with allies in America and Britain controlling the gulf’s security. The only route for oil, gas and other goods to Japan that couldn’t be cut off by the Soviet Union, Japan’s quasi-enemy, was the Malacca Strait.

Today, China’s situation is very different. Our quasi-enemies are the navies of America, Britain and India. The US and UK control the security of oil around the Persian Gulf. The US Naval Forces Central Command and US Fifth Fleet are stationed in Bahrain, and the construction of a UK military base in Bahrain’s Mina Sulman Port began in 2015. They also have military bases in gulf countries, like Saudi Arabia. In order to cut off oil and gas supplies from the gulf to China, they just need to advise gulf countries to close oil wells, they don’t need the Malacca Straight. With the Diego Garcia Base in the Indian Ocean, they can also block export ports along the coast of that ocean. Supposing that China went to war with the US, UK and India to protect its oil and gas supplies, it would be easier for its enemies to use the Arabian Sea and the rest of the Indian Ocean.

Some believe the new pipeline improves security for China’s oil and gas imports, but it would actually introduce more security hazards. First, compared with the South China Sea, the Arabian Sea and Indian Ocean have fewer geographical advantages for the Chinese Navy. Secondly, land-route risks would emerge and quickly grow. With its formidable anti-government armed forces, Pakistan is plagued by wars. For example, there are strong separatist forces in Baluchestan province, where Gwadar Port is located. Taliban forces have existed for a long time in Khyber Pakhtunkhwa province, which is semi-independent of Pakistan. The nation’s government once sent out 100,000 soldiers to quell rebellion in Federally Administered Tribal Areas. Disputes between the Kashmir region and India cause frequent military conflicts. Considering all of this, it’s hard to imagine the pipeline being secure when crossing through these regions.

The land-based transport method would also be even more threatening to China’s energy imports. A modern navy would be required to truly threaten China’s sea-based energy imports, which would cost tens of hundreds of billion yuan. In contrasts, the land alternative would be possible with just millions of yuan spent on weaponry and other military costs.

Some suggest a benefit of the CPOGP comes from access to the future Iranian oil and gas pipeline, but this is not the case. First, even if Iran’s resources are exported to China through pipelines, the central Asia-northern Xinjiang line, which has several ready-made pipelines, would be preferable over the China-Pakistan line, in terms of both security and economy. Secondly, Iran may not be happy to export its commodities via Pakistan. Saudi Arabia and other gulf countries, including Iran, have a negative attitude towards the advancement of the China-Pakistan Economic Corridor as it will lower then standing and influence over the country. These countries would prefer that China’s One Belt, One Road imitative focus more in East and Southeast Asia rather than countries to the west of the nation.

Further reviewing China’s energy security goal, the aim should not be to maintain ordinary energy consumption during times of war. It is wrong to invest in resources for such an irrational goal, China is the world’s largest country in both industrial development and exports. Such a vast quantity of exports cannot be maintained when at war, and as a result, a large amount of oil and gas energy usually consumed for production and transport of exports will decline sharply. Even in extreme situations, e.g. marine transport of oil and gas from the Persian Gulf is interrupted, domestic production capacity and imports from other countries will be sufficient. In order to guarantee competitiveness in the downstream industrial market when not at war, it’s inappropriate to use expensive resources. Furthermore, China is home to the world’s most abundant coal resources. When at peace, cheap imported gas and oil should be used as much as possible, but during war, coal consumption can be increased to compensate for the lack of gas and oil.

The bear market for primary products, that could last 10 to 15 years from when it began in 2012, brings more benefits to India than Pakistan, which may sharpen the imbalance between the strength of countries in the subcontinent. For the sake of China’s international strategy, and in order to balance strength in South Asia and undermine extremist forces in Pakistan, China must offer support to Pakistan’s economy, mostly through commercial projects. The world’s largest country should remain objective when selecting projects, take full account of economic law and security concerns, and properly control investment amounts.

Given the issue, China should prevent domestic groups from attempting to make misleading national decisions. We should also stop opinions from pushing up the political and economic value of the China-Pakistan Economic Corridor, which could misdirect social understanding of the project.

Mei Xinyu, the author, is a researcher at the Chinese Academy of International Trade and Economic Cooperation for the Ministry of Commerce. The article was initially edited by Wang Yanchun and published in Caijing Magazine on Dec. 19, 2016

Peregrine
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OBOR, Chinese Strategy and Implications

Postby Peregrine » 18 Sep 2017 15:11

X Posted on the CPEC Thread

Japan misleading India against China: Chinese state media

State-run Chinese daily, Global Times, has slammed Japan for misleading India against China, saying that the timing of Japanese PM Shinzo Abe's visit to India, right on the heels of the Doklam standoff, was suspicious.

Abe had visited India last week to inaugurate the Ahmedabad-Mumbai bullet train project, a 508-km railway line that will run on the Japanese Shinkansen technology.

The article in the Global Times also downplayed the role of the Asia-Africa Growth Corridor that was spoken about by Modi and Abe, saying that its basic concept and the spirit was similar to China's Belt and Road initiative.

The piece written by Long Xingchun, director of the Center for Indian Studies at China West Normal University, said that Abe was in conjunction with the USA and they were misleading India. Xingchun said that this was exemplified by the fact that Japan and the US had representatives attending the Belt and Road Forum in May, amidst India's boycott of the event.

It said Japan was using India as a tool to confront China, as Japan doesn't really want to confront it directly.

It took a dig at India too, saying that despite India building expressways and bullet trains, the roads in large parts of India were akin to "dirt tracks".

The article also questioned the entire logic behind the talks between the two countries.

"The better India-Japan ties have mutual self-serving interests. Japan, as the second-largest economy for long, is competitive in export of commodities, technology and global investments. While India is a key emerging market seeking foreign direct investment and technological know-how. Huge potential exists in the cooperation between the two countries," he said before stating that in such circumstances, it was perplexing to see that China was the dominant agenda in the talks between the two sides.

The article called upon both India and Japan to boost regional co-operation, saying the three major Asian powers could foster pragmatic cooperation which could be a win-win situation for regional progress and development as well.

Cheers Image

Mukesh.Kumar
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Re: OBOR, Chinese Strategy and Implications

Postby Mukesh.Kumar » 20 Sep 2017 15:16

The Chinese focus on OBOR is going to be there. Like it or not, India's got to step up. We are losing the game. Here's an update from our backyard- Oman.

Long back I had posted in West Asia thread on the strategic location of Duqm. To refresh memories refer the map and sailing distances below:
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While you can go through my older post to understand context fully, in a nut shell it is here:
[list=*][*] Duqm is an extremely important location for controlling Gulf of Hormuz, Makran coast, Red Sea and East African littoral
[*] Oman government is India friendly
[*] Today Oman government has financial strains because of which they are welcoming investors from outside for this crucial project.
[*] USD 3+ bn over 10 years is a pittance to pay for an economic project that helps us secure oil channels from Middle East, extend our presence in this strategic area and secure our Western coasts
[*] Somehow we are letting this golden opportunity go. Look what the Chinese are doing. This is not a CPEC, this project will payback, and somehow we dropped the ball.
[/list]

Chinese Investments into Duqm

http://www.independent.co.uk/news/business/news/oman-china-investment-coastal-town-boom-duqm-billions-gulf-middle-east-a7932941.html

yensoy
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Re: OBOR, Chinese Strategy and Implications

Postby yensoy » 20 Sep 2017 19:30

chetak wrote:The Gwadar Port Disillusion



The Gwadar Port Disillusion
MEI XINYU
DATE: TUE, 04/11/2017
<snip>
Mei Xinyu, the author, is a researcher at the Chinese Academy of International Trade and Economic Cooperation for the Ministry of Commerce. The article was initially edited by Wang Yanchun and published in Caijing Magazine on Dec. 19, 2016


Surprisingly well written article from China. Looks like the author wants to say something between the lines but then has to appear to toe the party line too. We have discussed these same aspects on BRF with similar conclusions, but it's good to see this view coming from China.

ramana
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Re: OBOR, Chinese Strategy and Implications

Postby ramana » 21 Sep 2017 02:18

Very nice cartoon. One picture worth a thousand words an all that....

Image

Also note what happens to dogs in China......


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