Bharat Rakshak Forum Announcement

Hello Everyone,

A warm welcome back to the Bharat Rakshak Forum.

Important Notice: Due to a corruption in the BR forum database we regret to announce that data records relating to some of our registered users have been lost. We estimate approx. 500 user details are deleted.

To ease the process of recreating the user IDs we request members that have previously posted on the BR forums to recognise and identify their posts, once the posts are identified please contact the BRF moderator team by emailing BRF Mod Team with your post details.

The mod team will be able to update your username, email etc. so that the user history can be maintained.

Unfortunately for members that have never posted or have had all their posts deleted i.e. users that have 0 posts, we will be unable to recreate your account hence we request that you re-register again.

We apologise for any inconvenience caused and thank you for your understanding.

Regards,
Seetal

OBOR, Chinese Strategy and Implications

The Strategic Issues & International Relations Forum is a venue to discuss issues pertaining to India's security environment, her strategic outlook on global affairs and as well as the effect of international relations in the Indian Subcontinent. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
shiv
BRF Oldie
Posts: 33671
Joined: 01 Jan 1970 05:30
Location: Pindliyon ka Gooda

Re: OBOR, Chinese Strategy and Implications

Postby shiv » 26 May 2017 15:00

SriJoy wrote:Also, whoever said that we sign a FTA first and then 'hope' China keeps its bargain- in this scenario, our FTA is contingent upon getting the seat- as in the UNSC, except for China, nobody else has serious reservations to India's permanent membership. Same with the NSG scenario.

Who said what is entirely contingent on what you claim occurred in an exchange between you and a friend of yours.

Whether we get into that impotent useless body UNSC or not is completely irrelevant considering what your friend nonchalantly suggests we sign away. That is one of the most worthless ideas I have read in recent times and sorry I will be frank about my opinions. Subsuming our manufacturing sector to China to get something that is little more than bragging rights on a useless world body, the UNSC. Pressure on nations is applied with or without taking into consideration what the UNSC bleats/brays depending on which way the wind is blowing

Here is your original post:

SriJoy wrote:My friend concluded that since we are not a manufacturing-based economy, Chinese overpowering of our manufacturing sector will be debilitating but not crippling and for a short/to intermediate term (i.e., 5-20 years?). But in exchange, we get
a) The border issues with China solved
b) long term strategic gain from permanently becoming part of UNSC and NSG.

Bhurishravas
BRFite
Posts: 680
Joined: 02 Sep 2016 18:25

Re: OBOR, Chinese Strategy and Implications

Postby Bhurishravas » 26 May 2017 17:19

Finally I must express my extreme irritation and frustration at the seeming repetition here of a very Indian (and BRF) viewpoint that imagines that UNSC seat is club membership that gives us bragging rights.

There is no such BRF viewpoint. Lutyens dhakkans, mostly from Congress, have never quite left the Nehruvian habit of seeking good behaviour certificate from everyone. They just want some attention from goras and that is the origin of UNSC permanent seat demand.

During one of our discussions,
My friend concluded that one should take a completely ridiculous position during Group Discussion rounds of selection in various institutions. This helps you
a)in getting attention(in view of yr foolish position) from every other person who has common sense.
b) in getting maximum time to speak.

Bhurishravas
BRFite
Posts: 680
Joined: 02 Sep 2016 18:25

Re: OBOR, Chinese Strategy and Implications

Postby Bhurishravas » 26 May 2017 17:37

India should gradually change its position on Tibet. The Nehruvian blunder needs to be undone.
1. Some hawk in the govt should first claim that Tibet does not belong to China but to India in view of close historical and religion ties.
2. The frequency of these claims should increase.
3. It should lead to a full fledged debate in media, forcing and pressurizing the Congoons and BJP retards to take a stand.

We will see where we go from there.

SSridhar
Forum Moderator
Posts: 21717
Joined: 05 May 2001 11:31
Location: Chennai

Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 29 May 2017 08:36

Misreading the tea leaves - Hardeep S Puri, The Hindu
nstitutions created by human beings necessarily reflect the pre-eminent preoccupation of their time. The present, the post-Second World War global order, anchored in the United Nations and the Bretton Woods institutions, the International Monetary Fund, the World Bank and now the World Trade Organisation, has survived for over seven decades. This is partly because these institutions responded to the imperative of history when they were created to prevent succeeding generations from being subjected to the scourge of war and the need for post-war economic reconstruction.

Two events

Is this present global order still ‘fit for purpose’? Much can be said for both sides of the argument. One thing is, however, clear. An alternative order or vision is not on the horizon. It is useful to bear this in mind whilst evaluating two developments. The first is the underwhelming first hundred days of the Donald Trump presidency which finds itself in an internal civil war situation with both the ‘deep state’ and the ‘fourth estate’ and provides cause for anxiety to some that it may be unravelling. The second is Beijing’s spectacular Belt and Road Initiative (BRI) extravaganza.

Some initiatives result in the building of institutions that are viable and establish their relevance over a period of time. Others, such as the ill-fated League of Nations, start badly and then fail altogether. Those based on flawed thinking find it even more difficult to take off. The present global, post-1945, order can broadly be characterised as having evolved in two phases, the pre-1989 and post-1989 phases. The disintegration of the Soviet Union, the end of the Cold War and the advent and what seemed like the triumph of globalisation resulted in some intellectuals like Francis Fukuyama to go somewhat prematurely into a celebratory dance.

Brexit and Mr. Trump’s victory appeared to some observers to change all that. As I observed elsewhere, it was far too early in 1989 and still too early in 2017 to celebrate the premature demise of globalisation, free trade, human rights, the Washington consensus and interventionist mindsets. All that Brexit and the Trump presidency signify is that Western industrial democracies have still not come to terms with slow rates of economic growth.

Still the only superpower

Does this provide an opening for an alternative order to come into being? Some rebalancing will most certainly take place. But no fundamental alteration and restructuring of the existing global order appears, at this point of time, to be realistically on the horizon. Any suggestions that the Chinese are taking over or that the two world’s largest economies have now resolved all their differences cannot but be somewhat fanciful.

The U.S. is not only an $18 trillion economy but also has by far the largest industrial military complex and a lead in technology and innovation that it will take several decades for China, the second largest economy, to catch up. The U.S. provides global leadership in terms of global public goods. Even allowing for some set-back through mismanagement, it is inconceivable that these global public goods could be provided by even a transforming China.

This brings us to the BRI extravaganza. When the initiative was first announced in 2013, it was clear that the motivation was to find external outlets for the surplus infrastructure building and manufacturing capacity that had been domestically created and for which demand was now petering out. This brings us to the essential kernel of the problem. Large white elephant type mega projects, such as the one in Hambantota in Sri Lanka, can never be attractive for private investors who will look for returns on their investment. This is where China’s state banks come in. With 68% of Sri Lanka’s GDP now required for debt servicing, such infrastructure projects have their limitations. A railway line China is building in Laos is expected to cost $6 billion and is unlikely to break even after 11 years, as anticipated. Meanwhile Laos’s public debt stands at around 60% of GDP. This is a familiar pattern in country after country. Yes, the Chinese are investing heavily overseas but not in BRI projects. BRI projects get funding from the state banks and are laying the ground for acrimony with local communities, on adequate compensation for land acquisition, Chinese labour, collusive award of works and a host of other problems. All these point to an economic model that can never be viable.

The EU-27, which account for a significant proportion of global economic activity, refused to sign on to the trade statement in Beijing. Add to that this the $18 trillion U.S. and $5 trillion Japanese economies. It appears highly unlikely that these countries will sign on to a global scheme that is designed to favour contracts being awarded to Chinese economic entities.


India’s position is beautifully captured in its May 13 statement: “…connectivity initiatives must be based on universally recognised international norms, good governance, rule of law, openness, transparency and equality. Connectivity initiatives must follow principles of financial responsibility to avoid projects that create… debt burden for communities….” Also: “Connectivity projects must be pursued in a manner that respects sovereignty and territorial integrity.”

Staying away from the BRI

India’s decision to stay away from the BRI event in Beijing was not only well considered but, in a sense, the only option open to it. That our smaller neighbours decided to attend should not be allowed to influence our overall approach and strategy. Having said that, it needs to be emphasised that the time has come for us to engage the Chinese at a sufficiently senior political and strategic level on how to progress our economic relations. We would be doing ourselves great disservice if we allow this important relationship to be viewed through a 1962 mindset. Equally, a more strategic engagement with China, irrespective of provocations from them, real or imagined, will serve long-term strategic interests in terms of both our security and economic interests.

China has registered impressive economic gains. Apart from lifting hundreds of millions of its citizens out of poverty, it has become a major global economic power. It is running massive trade surpluses with most of its trading partners. Whether these surpluses are the result of China’s competitiveness, unfair trading practices or its exchange rate, it is inconceivable that this state of play can continue indefinitely.

Once the leaders who were present in Beijing have returned to their capitals and resumed their normal duties, they will have no option but to evaluate proposals on their merit. The leaders in Africa are already calling for a rebalancing of bilateral trade. It is unlikely that countries ranging from Russia to Hungary or in Central Asia will agree to trading in their interests for a grand scheme in which their long-term economic interests are not looked after. For the BRI to be a success, it will need to build in win-win elements not only for China but for other stakeholders as well. Unless that is done, the scheme is not likely to take off.

Hardeep S. Puri, a diplomat, was India’s Permanent Representative to the United Nations both in Geneva and in New York.

SSridhar
Forum Moderator
Posts: 21717
Joined: 05 May 2001 11:31
Location: Chennai

Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 30 May 2017 14:23

China may hit funds roadblock over OBOR, says think tank - Dipanjan Roy Chaudhury, Economic Times
China's 'One Belt One Road' mega initiative could hit a roadblock, a Hyderabad-based think tank has claimed, arguing that the country may increasingly find it difficult to fund several infrastructure projects across continents owing to financial constraints at home arising from debts, shadow banking, Ponzi schemes and zombie companies.

OBOR is a $124-billion venture to build ports, railways, airports and power plants in South Asia, Central Asia, West Asia, Africa and even South America with Chinese loans and manpower, a prospect that has raised severe concerns in countries including India.

In a report released last week, the Centre for Asia Africa Policy Research said China may be forced to put brakes on its grandiose plans after credit ratings agency Moody's decided to downgrade the country's sovereign debt rating.

Image

"Will the new credit rating put brakes on China plans? Frankly, there are no ready answers… Will they succeed? It depends on how the Chinese marshal their energies to blunt the Moody's critique and how the Chinese sweeten the deals for the cash strapped low income countries, which have come to see their infrastructure nirvana in OBOR," said the report titled 'China's Hard sell – Moody's Worries'.

The report claimed that China is fudging statistics on a wide range of issues from the growing unemployment rates to banking sector.

Shadow banking and Ponzi schemes are rampant in China and could hurt its economy, it said. Besides, the Chinese market is flooded with uninsured wealth management instruments and zombie companies which, the think tank said, can derail OBOR project.

China frustrates the world when it comes to data on economy. "There is no statistics less credible than the nation's official unemployment rate," said business magazine Fortune in August 2015. The Financial Times also said in the same year, "China's official unemployment statistics are the worst of a notoriously unreliable set."


The US National Bureau of Economic Research has said that China's real unemployment rate is much higher than the official rate and, when correctly measured, is much closer to that in other nations at similar levels of development. Its working paper on 'Long Run Trends in Unemployment and Labour Force Participation in China, estimated that the actual unemployment rate in 2002-09 averaged nearly 11%, while the official rate averaged less than half that.

The think tank's report said, "High and rising unemployment in China created by massive layoffs during major changes in the structure of the labour market is not reflected in government figures.

The jobless rate may be three times the official estimate, according to Fathom Consulting;
its China's Underemployment Indicator has tripled to 12.9 percent since 2012 even while the official jobless rate has hovered near 4 percent for five years."

panduranghari
BRF Oldie
Posts: 3534
Joined: 11 Aug 2016 06:14

Re: OBOR, Chinese Strategy and Implications

Postby panduranghari » 30 May 2017 17:20

yensoy wrote:OBOR is no Marshall Plan, make no mistake about it.


It seems like Plaza accord redux. I think US will give Indian interests a short shrift by agreeing to this new accord under the auspices of OBOR.

shiv
BRF Oldie
Posts: 33671
Joined: 01 Jan 1970 05:30
Location: Pindliyon ka Gooda

Re: OBOR, Chinese Strategy and Implications

Postby shiv » 30 May 2017 18:47

panduranghari wrote:
It seems like Plaza accord redux. I think US will give Indian interests a short shrift by agreeing to this new accord under the auspices of OBOR.

Could you flesh out in some detail as to what this entails. I am unable to see what the US can do to make things worse for India given that it has done little to make it better. I cannot see how US support will make OBOR "more successfully anti-India" than it already is.

panduranghari
BRF Oldie
Posts: 3534
Joined: 11 Aug 2016 06:14

Re: OBOR, Chinese Strategy and Implications

Postby panduranghari » 30 May 2017 19:12

SriJoy wrote:
So i take it 'FTA with China in exchange for 80% of Aksai Chin, recognition of AP as Indian state, permanent seat at UNSC and NSG' is not 'worth it' in your opinion ?
D.


Great powers or nation states with ambitions of great power status, do not confirm to status quo world views- those views which have been imposed and we have had no say in it.

rgosain
BRFite
Posts: 299
Joined: 10 Jan 2003 12:31

Re: OBOR, Chinese Strategy and Implications

Postby rgosain » 30 May 2017 19:17

Obor makes perfect sense from a US perspective and should be seen as a realisation of the clinton-zemin accord from 1997. As part of the US-China strategic partnership the PRC would be recognised as having suzerainty over the Asian landmass whilst the US would dominate the Pacific ocean and beyond, hence the containment policy against India for much of that period, upto 1998. This stabilisation would allow US companies access to these new chinese markets.
Obor/cpec or whatever rubric it is called, has been delayed because of the failure to contain India below the himalyas

panduranghari
BRF Oldie
Posts: 3534
Joined: 11 Aug 2016 06:14

Re: OBOR, Chinese Strategy and Implications

Postby panduranghari » 30 May 2017 19:42

Shiv saar,

Rgosain ji has put political picture of US-China tango in perspective in the post above this one.

Now what was Plaza Accord?
The Plaza Accord or Plaza Agreement was an agreement between the governments of France, West Germany, Japan, the United States, and the United Kingdom, to depreciate the U.S. dollar in relation to the Japanese yen and German Deutsche Mark by intervening in currency markets. The five governments signed the accord on September 22, 1985 at the Plaza Hotel in New York City.


It was done at a time when dollar was rising rapidly, not unlike today.
It was done at a time when there was global stagnation, not unlike today.
It was done when the US centric world thought, Japan is going to take over the US- remember Die Hard- Nakatomi plaza. Every 2nd building was owned by the Japanese, not unlike what the world says about China today.

So how does OBOR fit in?

Chinese using it trade heft, eventually allows yuan to float. It removes the artifical peg with USD. In true free market, the Yuan would become a very strong currency as China exports more than consumes. But its joined in the hip to the dollar. As dollar is rising so is yuan. Its affecting the dollar liquidity in China. Quite a lot of Chinese debt burden is unknown. Shadow banking is rampant. All depend on dollar funding. The yield curve is inverted that means people are not willing to hold long term chinese debt. China needs dollars more right now, than in the past.

Even AIIB is not funding any projects as was expected. Besides India being a 2nd largest contributer to AIIB may have some say in where the funds will be spent. I dont think India will allow AIIB funds to be used for OBOR.

The Chinese as I see have 1 choice. Strike a deal with US. They would hope India will submit to pressure from US if US is brought on board. If it was Hillary Monsanto Malmaison was the president, then perhaps it would have happened. But the Donald might take some time. The Chinese deep state have already bought Kushner anyway. He will facilitate a modus vivendi between US and China that will allow Chinese OBOR to proceed perhaps even through CPEC leg, In return Chinese will let their currency rise, thus weakening the dollar. US manufacturing PMI is being crushed by rising dollar. If PMI falls below 47, its game up for US. I do not think The Donaldo will let that happen.

There will be a Plaza accord redux and OBOR will facilitate this. All of course IMO.

chola
BRFite
Posts: 1669
Joined: 16 Dec 2002 12:31
Location: USA

Re: OBOR, Chinese Strategy and Implications

Postby chola » 30 May 2017 20:04

Before we go into any more dhoti shivering over OBOR, these are the basic facts:

1. OBOR, even with POK -- hence the PO part, does not go through Bharati held land so its failure or success is outside our ability to control unless we go to war

2. It is a chini mega infrastructure initiative that can cement chini influence in Eurasia if it succeeds, if chini success is a danger to Bharat then we must go to war

3. It is a chini mega infrastructure initiative that can hobble the chini economy for a generation if it fails, Bharat can only guarantee it fails -- because economically, diplomatically and geo-politically the PRC hold massive advantages along OBOR -- if we go to war.

So the situation is clear. Either we go to war or we ignore and let the chinis succeed or failure on their own accord.

Either way, we should stop shivering over this. It is the PRC who had decided to make this trillion USD bet not us.

The US, EU and East Asia will make their pound of flesh. Just like they did on the rise of Cheen itself. If the PRC wants the high-risk, low-return segment call infrastructure building then by all means let them do it, we (MNCs) will sell them tools to build it and once built we (MNCs) will use them to hit new markets.
Last edited by chola on 30 May 2017 20:12, edited 2 times in total.

shiv
BRF Oldie
Posts: 33671
Joined: 01 Jan 1970 05:30
Location: Pindliyon ka Gooda

Re: OBOR, Chinese Strategy and Implications

Postby shiv » 30 May 2017 20:08

panduranghari wrote:
The Chinese as I see have 1 choice. Strike a deal with US. They would hope India will submit to pressure from US if US is brought on board. If it was Hillary Monsanto Malmaison was the president, then perhaps it would have happened. But the Donald might take some time. The Chinese deep state have already bought Kushner anyway. He will facilitate a modus vivendi between US and China that will allow Chinese OBOR to proceed perhaps even through CPEC leg, In return Chinese will let their currency rise, thus weakening the dollar. US manufacturing PMI is being crushed by rising dollar. If PMI falls below 47, its game up for US. I do not think The Donaldo will let that happen.

The problem that I see with this scenario, apart from the fact that I don't understand it at all is that the name "India" occurs in the paragraph just once along with names like "Malmaison", "Donald", acronyms like "PMI" etc. With respect this is the language of my Indian American relatives and Indian American doctor classmates and friends on an alumni bulletin board. I get used to having unfamiliar names like "David Letterman" thrown at me.

The name India occurs in the sentence "hope India will submit to pressure from US"

I have taken part in discussions such as these in the past and will word my viewpoint carefully. There are two possibilities here
a. India will not submit to US pressure
b. India submits to US pressure

Now anyone who argues that India will not submit to US pressure is usually subjected to a tsunami of economic and political facts about the strength of the US and China combined which make the combine an irresistible force thereby eliminating the choice that India will NOT submit. So 50% of the possible options are eliminated with rhetoric.

So OK. India submits

What does India submit to? What happens to India? I would be happy to hear some detail. I must point out that I have spent many decades seeing India not submitting as people expect her to submit and holding out when Indian interests are at stake - so I would like to hear how people see the US and China cooperating to coerce India in some way. Let me say up front that the arguments sound far fetched and unconvincing to me. And India is full of people like me who simply will not submit and would like to see how we can be coerced. It is hardly credible to me to be told that nations that cannot control Syria, Pakistan, NoKo etc with all sorts of bribes and sanctions will somehow coerce India to submit to something in an argument filled with strange names and jargon which remind me of Eric von Daniken's books about aliens on earth

panduranghari
BRF Oldie
Posts: 3534
Joined: 11 Aug 2016 06:14

Re: OBOR, Chinese Strategy and Implications

Postby panduranghari » 30 May 2017 20:46

India accepts to CPEC. Sorry if I was not clear.

pankajs
BRF Oldie
Posts: 9557
Joined: 13 Aug 2009 20:56

Re: OBOR, Chinese Strategy and Implications

Postby pankajs » 30 May 2017 22:03

Strange .....

Kyle Bass is betting that the Yuan will depreciate vs the Dollar without the Chinese intervention or rather inspite of the Chinese intervention.That is to say that the Chinese have kept Yuan higher vs the Dollar than the Trade/Flow data would suggest and they have burnt $1 Trillion+ in the process. Without that support the Yuan will FALL vs the Dollar.

This is contrary to "Chinese will let their currency rise" that seems to imply the Yuan is being *held* down vs the Dollar.

ramana
Forum Moderator
Posts: 47896
Joined: 01 Jan 1970 05:30

Re: OBOR, Chinese Strategy and Implications

Postby ramana » 30 May 2017 22:40

pankajs, I would listen to Panduranghari who has followed this stuff with skin in the game.


Foreign Exchange is a very situational perspective and changes all the time.
Macro is only for the long run.

ramana
Forum Moderator
Posts: 47896
Joined: 01 Jan 1970 05:30

Re: OBOR, Chinese Strategy and Implications

Postby ramana » 30 May 2017 22:43

Srijoy, Your friend is on something stronger than Old Monk.

China will never accept India in UNSC with veto.

So forget it.

ramana
Forum Moderator
Posts: 47896
Joined: 01 Jan 1970 05:30

Re: OBOR, Chinese Strategy and Implications

Postby ramana » 31 May 2017 06:27

No discussions on International North South Transportation Corridor (INSTC)?



This corridor runs from India to Russia

https://en.wikipedia.org/wiki/North%E2% ... t_Corridor

Image


The International North–South Transport Corridor (INSTC) is a 7,200-km-long[1] multi-mode network of ship, rail, and road route for moving freight between India, Russia, Iran, Europe and Central Asia. The route primarily involves moving freight from India, Iran, Azerbaijan and Russia via ship, rail and road.[2] The objective of the corridor is to increase trade connectivity between major cities such as Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, Bandar Anzali, etc.[3] Dry runs of two routes were conducted in 2014, the first was Mumbai to Baku via Bandar Abbas and the second was Mumbai to Astrakhan via Bandar Abbas, Tehran and Bandar Anzali. The objective of the study was to identify and address key bottlenecks.[4][5] The results showed transport costs were reduced by "$2,500 per 15 tons of cargo".[5] Other routes under consideration include via Kazakhstan and Turkmenistan.

This will also synchronize with the Ashgabat agreement, a Multimodal transport agreement signed by India, Oman, Iran, Turkmenistan, Uzbekistan and Kazakhstan, for creating an international transport and transit corridor facilitating transportation of goods between Central Asia and the Persian Gulf.[


Brookings Analysis circa 2002 gives the background:

https://www.brookings.edu/articles/the- ... -corridor/


CONCLUSION: The North-South Transport Corridor is making strides towards achieving a new framework. The project has the potential to incorporate other interested states, including countries of the Caucasus, Central Asia, and Eastern Europe, and perhaps also Oman. However, history shows the difficulty of developing regional transport projects. The Trans-Siberian Railway, once hailed as an important strategic and economic project, now moves only about 10,000 containers per year mainly due to a lack of service reliability. The Caspian region is also notorious for its lack of investment in essential port and railway infrastructure. Strategic and political dangers, such as the potential for militarization of the Caspian, could pose a significant threat. Prominent Russian politicians have already noted the danger that the route be abused for illicit drug and weapons trafficking, following existing routes from Afghanistan in the south via Central Asia into Russia and Europe. The Olya and Astrakhan ports, as well as others on the Iranian portion, are also already allegedly involved in the illicit transfer of WMD components from Russia to Iran.

At the same time, the official North-South Transport Corridor Project must be seen in light of a broader attempt by regional Central Asian countries to create as many trade and transport opportunities as possible. Today?s developments mirror the continually evolving system of multiple routes and relationships of the historic Silk Road. In addition to following developments in the official North-South Transport Corridor, it will be equally important to track the web of bilateral infrastructure and trade routes developing in the region.




NaMo will inaugurate it on his Russia Visit.

OBOR is a response to this.

SSridhar
Forum Moderator
Posts: 21717
Joined: 05 May 2001 11:31
Location: Chennai

Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 31 May 2017 07:00

ramana wrote:No discussions on International North South Transportation Corridor (INSTC)?

Yes, we should do that here as well as Project Mausam & Project Spice Route.

Y I Patel
BRFite
Posts: 489
Joined: 01 Jan 1970 05:30

Re: OBOR, Chinese Strategy and Implications

Postby Y I Patel » 31 May 2017 07:10

ssridhar

That's a masterful summary of the geography of Aksai Chin. I have copied it to the good posts thread.

chetak
BRF Oldie
Posts: 15848
Joined: 16 May 2008 12:00

Re: OBOR, Chinese Strategy and Implications

Postby chetak » 31 May 2017 10:35

Competitive Connectivity is at the Core of the New Cold War




Competitive Connectivity is at the Core of the New Cold War

29.05.2017
Andrew Korybko

The struggle between the unipolar and multipolar camps to determine the future of the 21st century is rapidly turning into a contest between two competing hemispheric-wide connectivity projects.

By now, everyone in the world is familiar with China’s One Belt One Road (OBOR) global vision of New Silk Road connectivity, though not many people are aware of the joint Indo-Japanese response of the Asia Africa Growth Corridor (AAGC), also called the “Freedom Corridor”. This initiative stems from a November 2016 joint declaration by Indian Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe to cooperate in building infrastructure projects all across the Indo-Pacific Rimland.

Although no overt American participation has been announced as of yet, the very fact that it’s being touted as the “Freedom Corridor” carries heavy overtones of American influence, and it can be reasonably presumed that the US has an interest in supporting any connectivity projects which compete with China’s.

And that’s exactly what the “Freedom Corridor” is supposed to be, a rival to OBOR, though it’s unlikely to compete with China in any significant way unless the US’ anti-OBOR Hybrid War plans succeed in offsetting some of Beijing’s projects in Afro-Eurasia. Hybrid War is conceptualized by the author as being externally provoked identity conflicts in geostrategic transit states which aim to disrupt, control, or influence transnational connective infrastructure projects just like how the War on Syria preempted Iran’s Friendship Pipeline to the Mediterranean and the spree of urban terrorism commonly known as “EuroMaidan” crushed Russia’s hopes of integrating Ukraine into the Eurasian Union.

The same pattern of transitioning Color Revolutions into Unconventional Wars (or vice-versa) is even more applicable and comparatively easier to pull off in the three geopolitical zones of competition between OBOR and the “Freedom Corridor”, so it’s expected that Hybrid War will continue to remain one of the most dominant trends of the 21st century as the US actively seeks to subvert its Chinese rival all across the world in order to give a boost to its Indo-Japanese “Lead From Behind” partners.

Before describing the three regions of overlap between OBOR and the “Freedom Corridor” and analyzing the Hybrid War vulnerabilities that the US is expected to exploit against China, the reader needs to become familiarized with the geostrategic importance of the New Silk Roads.

This was reviewed in the author’s earlier Sputnik analysis titled “What’s CPEC, And How Does The Future Of The Multipolar World Depend On It?”, which explained how the New Cold War is really all about the resultant friction between the stakeholders of the existing global system and those who are challenging it, or in other words, the US and its unipolar allies (rather, underlings/vassals) versus China, Russia, and their multipolar partners.

OBOR is understood in this context as being the vehicle by which Beijing can catalyze an irreversible change in the strategic balance of power through the pioneering of new trade routes and markets, and the China-Pakistan Economic Corridor (CPEC) is the flagship of this initiative because it aims to provide China with reliable non-Malacca access to the Indian Ocean.

Due to the game-changing dynamics behind this project, a vicious Hybrid War has been unleashed against CPEC in the Pakistani province of Balochistan, though it’s thus far been unable to impede the geostrategic attractiveness of this route because of the heavy security that Islamabad has committed to protecting it.

That being said, CPEC isn’t the only New Silk Road corridor even if it is the most important one. China is also pursuing the Eurasian Land Bridge with Russia and Kazakhstan, contemplating a high-speed rail line to Iran via Central Asia, building the ASEAN Silk Road, and constructing several rail corridors in East Africa.

There are also supplementary projects such as the possible Himalayan Silk Road with Nepal and the stalled BCIM Economic Corridor with Bangladesh, India, and Myanmar, but they won’t figure into the present analysis. Instead, this article will take a look at the intersection points between OBOR and the “Freedom Corridor” and explain the regional variables which could be weaponized against Beijing to the relative benefit of the US’ allies in New Delhi and Tokyo.

The Chinese and Indo-Japanese projects overlap in ASEAN, Central Asia-Iran, and East Africa, a broad stretch of Afro-Eurasia linked together through the concept of “Greater South Asia”. The author introduced this term in late 2016 to describe Pakistan and India’s differing geographic focuses in the aftermath of that year’s failed SAARC Summit, whereby Islamabad set its sights on connectivity with its Central Asian civilizational cousins through CPEC while New Delhi did the same with its Southeast Asian ones via its “Act East” engagement with the BIMSTEC grouping.

East Africa comes into the mix because it’s located on the western edge of the Indian Ocean (the maritime frontier of South Asia) and was correctly forecast to be the center of Chinese-Indian competition in the continent. Seeing as how Beijing’s engagement with East Africa will increasingly come to rely on the South Asian CPEC port of Gwadar in the future, it’s only reasonable to broaden the concept of “Greater South Asia” to include this part of the Indo-Pacific region alongside Central Asia and ASEAN. Moreover, India and Pakistan’s Chinese partner both have infrastructure interests in Iran, which is no historical stranger to the South Asian region, so the Islamic Republic is also naturally included in this geographic model as well.

In principle, China and India-Japan’s connectivity projects in “Greater South Asia” could peacefully coexist with one another, and any competition between them could spur the development of their three shared transit regions and work out to everyone’s ultimate benefit. The problem, however, is that the US is expected to clandestinely intervene in seeking to disrupt, control, or influence China’s investments through Hybrid War, which might work out to India-Japan’s competitive benefit even if they need to accept some degree of collateral damage:
ASEAN:

China’s ASEAN Silk Road is a high-speed rail corridor from the Yunnan capital of Kunming to Singapore, passing through Laos, Thailand, and Malaysia along the way, and there’s also the hope that a separate Myanmar-focused branch can one day be built parallel to the Kyaukphyu Pipeline in complementing CPEC’s Indian Ocean connectivity.

As for India-Japan, their connectivity plans run perpendicular to China’s and integrate the western and eastern reaches of Indochina. India is building the Trilateral Highway with Myanmar and Thailand, while Japan is spearheading the East-West and Southern Corridors from southeastern coastal Myanmar to Vietnam. Both sides will cooperate on each other’s projects and also in joint investments in India’s Andaman and Nicobar Islands.

The most disruptive Hybrid War scenarios in what is technically referred to as the “Greater Mekong Subregion” are an expansion of Myanmar’s civil war and “red shirt” opposition unrest in the group’s northeastern Thai base of “Isan”, both of which would interfere more with China’s projects than India-Japan’s. Even if the unlikely worst-case event where both transit states are largely destabilized, the “Freedom Corridor” can still survive via the more strategically secure Southern Corridor and India-Japan’s outposts in the Andaman and Nicobar Islands.

Central Asia-Iran:

China wants to streamline a high-speed rail route from its eastern city of Yiwu to Tehran via the heart of the Central Asian states because existing infrastructure is insufficient and too geographically circuitous to Beijing’s liking. India and Japan, however, want to use the southeastern Iranian port of Chabahar in the province of Sistan e Baluchestan as their entry point into the region.

From there, they envision branching out in two principle directions – northeast into Afghanistan and the Central Asian Republics, and northwest through Azerbaijan and Russia en route to the EU (as per the North-South Transport Corridor’s master plan). Iran is also toying with the idea of a Persian Gulf-Black Sea Corridor through Armenia and Georgia which could complement the NSTC.

Central Asia is stable for the time being, but China’s plans could hit a major roadblock if transnational violence is triggered in the densely populated Fergana Valley by Afghan-originating Daesh terrorist attacks and/or a return to the brief but bloody 2010 ethnic pogroms between Kyrgyz and Uzbeks. The inevitable leadership transition in Tajikistan might also not be as smooth as it was in Uzbekistan, potentially opening up a wide range of internal conflict scenarios.

As for Iran, it will probably suffer blowback from the Hybrid War on CPEC as third-party-supported Baloch terrorism spills across the border from the Pakistani namesake province to the Iranian one, potentially impacting on Chabahar. In that case, India and Japan could just relocate their base of operations to Bandar Abbas instead, though accepting that any Afghan-Central Asian connectivity from there would be more costly.

Moreover, although the odds are dismal, there’s a chance that the US could provoke unforeseen problems between Russia and its other two main Great Power partners on the NTSC which could result in Iran’s Persian Gulf-Black Sea Corridor becoming the sole north-south gateway between India and the EU, thereby effectively cutting Russia completely out of this transcontinental trade route.

East Africa:

Beijing has already completed the Djibouti-Addis Ababa railway and is working on the LAPSSET Corridor from Kenya to access the landlocked Ethiopian giant from its southern flank. China’s also building the Standard Gauge Railway in Kenya which it hopes to one day connect to the northeastern Congolese city of Kisangani and from there down the country’s eponymous river and overland to the Atlantic.

There’s also the Central Corridor through Tanzania and the existing TAZARA railway, the latter of which could connect with Angola’s recently refurbished Benguela Railway to trailblaze a southern cross-continental corridor to the Atlantic.

India and Japan have yet to announce any similarly ambitious projects, though the “Freedom Corridor” is reportedly going to focus on something called the “Kenya-Tanzania-Mozambique (KTM) growth zone”, which basically means that these two Great Powers are coastal-focused in their joint East African infrastructure efforts. China, however, is looking to deepen its reach into the continental interior, which means that destabilizations there such as the Hybrid War on Ethiopia and the impending slow-motion collapse of the Congo could harm its core interests while leaving India and Japan’s largely unscathed.

— --------

All in all, the US can crash China’s hemispheric connectivity plans through the strategic provocation of Hybrid War in some of the most important transit states along its New Silk Roads, and the successful completion of these briefly touched-upon proxy campaigns could “level the playing field” to India and Japan’s competitive advantage in the New Cold War.

The views expressed in this article are solely those of the author and do not necessarily reflect the official position of Sputnik.

Philip
BRF Oldie
Posts: 17607
Joined: 01 Jan 1970 05:30
Location: India

Re: OBOR, Chinese Strategy and Implications

Postby Philip » 31 May 2017 16:56

Being a commie military dictatorship,sometimes one has to admire China's single-minded pursuit of scientific projects which will benefit its people.
One is sure that given the right advice,Mr.Modi will also prove equal to the task.His greatest enemy,our babus.

China is now getting its power from the largest floating solar farm on Earth
https://www.indy100.com/article/china-p ... paign=i100

A_Gupta
BRF Oldie
Posts: 9790
Joined: 23 Oct 2001 11:31
Contact:

Re: OBOR, Chinese Strategy and Implications

Postby A_Gupta » 31 May 2017 18:45

http://indianexpress.com/article/explai ... r-4681749/
To counter OBOR, India and Japan propose Asia-Africa sea corridor
The two governments hope that the project would be cheaper option and have a smaller carbon footprint when compared to China’s One Belt, One Road (OBOR) initiative.
The AAGC is an attempt to create a “free and open Indo-Pacific region” by rediscovering ancient sea-routes and creating new sea corridors that will link the African continent with India and countries in South-Asia and South-East Asia. The project stakeholders hope the sea corridors will be “low-cost” and have “less carbon footprint” when compared to a land corridor. For instance, under the AAGC, there is a plan to connect ports in Jamnagar (Gujarat) with Djibouti in the Gulf of Eden. Similarly, ports of Mombasa and Zanzibar will be connected to ports near Madurai; Kolkata will be linked to Sittwe port in Myanmar. India is developing ports under the Sagarmala programme specifically for this purpose. Apart from developing sea corridors , the AAGC also proposes to build robust institutional, industrial and transport infrastructure in growth poles among countries in Asia and Africa. The idea is to enable economies in Asia and Africa to further integrate and collectively emerge as a globally competitive economic bloc.

Japan’s contribution to the project will be its state-of-the-art technology and ability to build quality infrastructure, while India will bring in its expertise of working in Africa. The private sector of both countries are expected to play big role by coming together to form joint-ventures and consortiums, to take up infrastructure, power or agribusiness projects in Africa.

Philip
BRF Oldie
Posts: 17607
Joined: 01 Jan 1970 05:30
Location: India

Re: OBOR, Chinese Strategy and Implications

Postby Philip » 31 May 2017 18:57

With India in the centre of the IOR,we should be devising a network of trade routes linking the littoral nations of the IOR together with India/SL as the hub.The oil tank farm at Trinco under a JV with SL could store zillions of barrels of crude,petro products for the entire region.Transhipment to the Asia-Pacific,OZ,etc.SL has to be weaned away from the PRC and we must leverage our proximity to it and ancient ties. SL can only count upon India for material and humanitarian help immediately when hit with natural disasters as seen with the Asian Tsunami and now with the latest floods. We must make the SL leaders realise this hard truth and make them sign mutually benefical agreements which are hanging fire. A more dynamic foreign policy and statesmanship is reqd. to succeed with this African/IOR gambit.

ramana
Forum Moderator
Posts: 47896
Joined: 01 Jan 1970 05:30

Re: OBOR, Chinese Strategy and Implications

Postby ramana » 31 May 2017 20:40

X-Post from ASEAN thread...

A_Gupta wrote:'Economic partnership between India, Asean and FTA partners in 2017'
http://www.business-standard.com/articl ... 540_1.html
A comprehensive economic partnership between India, Asean and six Free Trade Agreement (FTA) partners will likely take place in 2017, an External Affairs Ministry official said here on Tuesday.

"A comprehensive economic partnership between India, Asean and six FTA partners is likely. We are hoping to complete it within this year," Joint Secretary in the MEA Anurag Bhushan said at 'Act East: India's Asean Journey' organised by the Indian Chamber of Commerce here.

"Once it is finalised the outcome would be a balanced and comprehensive trade agreement that would not only take care of trade and services but also investments," the official said.

Bhushan, who took over his new assignment on Monday, said the Indian-Asean trading potential was far more than what it had presently achieved.


He said connectivity being a key factor in boosting partnership between the two regions, the trilateral highway between India, Myanmar and Thailand and the Kaladan multi-modal transit project were the prime focus of the Indian government.

"The India-Myanmar-Thailand Trilateral Highway (IMTTH) in terms of road connectivity and the Kaladan Multi-Modal Transit in terms of maritime connectivity are our flagship projects for the connectivity with the Asean," he said.

Bhushan said the government would do massive infrastructural development in the northeastern states as the region is extremely important for Indo-Asean connectivity.


I submit the INSTC, this trilateral highway IMTTH to link India all are more sustainable projects than OBOR. No wonder India is not interested in OBOR.

ramana
Forum Moderator
Posts: 47896
Joined: 01 Jan 1970 05:30

Re: OBOR, Chinese Strategy and Implications

Postby ramana » 31 May 2017 20:41

Philip All these are babu conceived projects.

You want them all thrown out?

yensoy
BRFite
Posts: 561
Joined: 29 May 2002 11:31
Location: USA

Re: OBOR, Chinese Strategy and Implications

Postby yensoy » 01 Jun 2017 06:08

rgosain wrote:Obor makes perfect sense from a US perspective and should be seen as a realisation of the clinton-zemin accord from 1997. As part of the US-China strategic partnership the PRC would be recognised as having suzerainty over the Asian landmass whilst the US would dominate the Pacific ocean and beyond, hence the containment policy against India for much of that period, upto 1998. This stabilisation would allow US companies access to these new chinese markets.
Obor/cpec or whatever rubric it is called, has been delayed because of the failure to contain India below the himalyas


Suddenly there is a double dose of conspiracy theories.

US-China strategic partnership... well there is a pretty awesome trade partnership in place but strategic? Unlikely.

The Asian landmass is where the action is. US will be crazy to just hand that over to China, especially when it is doing all the dirty work. Now if US tells China to take over their nation-building adventures in Afghanistan & Iraq and tame the ISIS then you have a point. I don't see that happening - neither will the US relinquish their space nor will the Chinese step up and take over.

Philip
BRF Oldie
Posts: 17607
Joined: 01 Jan 1970 05:30
Location: India

Re: OBOR, Chinese Strategy and Implications

Postby Philip » 01 Jun 2017 10:36

What is needed is a more forceful unapologetic attitude from babuland when we launch our proposed strategies,which in truth have been knee-jerk reactions to the Chinese global vision of domination by their species.When we were given opportunities,in SL for example,we scorned them only to be picked up by the PRC. Secondly,our time frame of execution of projects is simply woeful. It is only after the BJP has returned to rule that there is a greater emphasis on national security esp. in our neighbourhood. We must name the external threats to our region and not worry about annoying anyone.
The IN has said that 7 Chinese sub visits to the region have taken place in recent times.These are only going to increase and later become permanent once Djibouti and Gwadar are operationalised.

Mr.Modi during his visit to Russia must be frank with Mr.Putin about Chinese mischief against India and that if Russia does not take serious note of it,India will have to work more closely with China's enemies of the West.Politics makes strange bedfellows.

jayasimha
BRFite
Posts: 400
Joined: 09 Feb 2011 17:31

Re: OBOR, Chinese Strategy and Implications

Postby jayasimha » 01 Jun 2017 16:44

China's takeover of Pakistan by
Harsha Kakar in "The Statesman"
May 16, 2017 | 02:47 AM

http://www.thestatesman.com/opinion/chi ... 86622.html


good read..........

chola
BRFite
Posts: 1669
Joined: 16 Dec 2002 12:31
Location: USA

Re: OBOR, Chinese Strategy and Implications

Postby chola » 01 Jun 2017 19:47

Philip wrote:Being a commie military dictatorship,sometimes one has to admire China's single-minded pursuit of scientific projects which will benefit its people.
One is sure that given the right advice,Mr.Modi will also prove equal to the task.His greatest enemy,our babus.

China is now getting its power from the largest floating solar farm on Earth
https://www.indy100.com/article/china-p ... paign=i100



That is our biggest problem with Cheen, because of the lack of experts and formal study (unlike IS/EU/Japan who have massive Chinese programs in academia and business,) we completely mis-identify its strengths and weaknesses.

It is NOT a military dictatorship. It is an mercantile oligarchy that is running one of the most brutally capitalistic (dog-eat-dog) systems on earth. Its military build-up is nothing more than the side benefits of its main source of power which is industrial strength. It builds weapons to sell and to intimidate but it hadn't fought with the stuff in decades. Military culture is exceptionally weak for a P5 and this has been proven by the PRC assiduously keeping its war machine from a fight in 4 decades since its debacle in Vietnam. With the effects of the one child policy and the little emperor syndrome, the PRC's ability and will to fight gets worse as years go by.

It has exceptionally weak forces arrayed against India because of geo-politics and geography. We see daily run-ins between US and Japanese aircraft with Cheen but never once have I come across an Indi-Chini aerial intercept. There seems to be a complete lack of PLAAF patrols on our borders unlike their East Coast.

So here is a rival that is financially and industrially dangerous -- with a printing press that can throw a trillion USD at something like OBOR. But exceptionally weak in military culture and is in a major material dis-avantage against us in our theater because he has arrogantly turned his back on us.

What do you do?

You go to war before his state-financed projects can take hold, before his production of ships, aircraft and whatnot overwhelms the current reality on the ground. That is what!

You hit him in the back of his f.cking head when he is looking elsewhere and least expects it!

chetak
BRF Oldie
Posts: 15848
Joined: 16 May 2008 12:00

Re: OBOR, Chinese Strategy and Implications

Postby chetak » 02 Jun 2017 09:02

A new lunatic express: OBOR projects worldwide are stacking the deck for Chinese enterprises and banks

A new lunatic express: OBOR projects worldwide are stacking the deck for Chinese enterprises and banks


June 2, 2017, Bibek Debroy

Kenya Railways Corporation has a standard gauge railway (SGR) project that’s part of Kenya’s Vision 2030 document. At the moment, work is happening on the first of three phases, from Mombasa to Nairobi, one that will be commercially functional from January 2018. In second and third phases, the line will extend to Uganda, Rwanda and South Sudan. This is part of a master plan to build infrastructure in East Africa. More specifically, there is an East African Railway Master Plan, straddling Tanzania, Kenya, Uganda, Rwanda, Burundi, South Sudan and Ethiopia. It is a great idea to build infrastructure.

Infrastructure yields what economists call multiplier benefits. But benefits are typically external to the project, while costs are mostly internal. That’s the reason, barring odd exceptions, infrastructure projects rarely pay their way. That’s also the reason they are mostly funded through debt, rather than bonds, or equity.

In this part of the world (Kenya/Uganda), the British built railway infrastructure towards the end of the 19th century, though that was more for strategic reasons, not economic. In 1971, Charles Miller wrote a book about this and titled it, ‘The Lunatic Express: An entertainment in imperialism’. The costs, human and financial, were horrendous. Labour came from India, superior skilled ones from Britain. Sleepers and locomotives came from Britain.

We have details for first phase of the SGR project. The principal contractor is China Road and Bridge Corporation (CRBC), a subsidiary of China Communications Construction Company (CCCC). Both are state-owned enterprises. When construction is complete, the line will be operated by CCCC. Locomotives (freight and passenger) and rolling stock (coaches and wagons) will be imported from China, manufactured by various subsidiaries of CRRC Corporation Limited, another state-owned enterprise.

Even if one forgets strategic considerations, or China’s objective of garnering resources for infrastructure, this makes obvious sense for Chinese state-owned enterprises and state-owned banks. With endogenous sources of growth drying out within China, this is a softer option than reforming either enterprises or banks.

How will the first phase be financed? Since infrastructure projects rarely pay their way, as at the end of the 19th century, they have to be publicly funded. In this particular case, Kenya government funds 10% of the expenditure. The remaining 90% is a loan from Exim Bank of China.

Decades ago, there used to be debates around, and arguments against, tied aid. Tied aid means foreign aid in the form of a loan or a grant. But that money must be spent on goods or services produced in the country that provides aid. For obvious reasons, untied aid is more efficient than tied aid. The SGR project, at least the first phase, represents tied aid.

Partly because China wants to project these as overseas investments and not loans, terms are rarely in the public domain. Since this is Exim Bank, it won’t be a grant, or an interest free loan, but a loan on concessional terms. In all probability, terms will be something like the following. An interest rate of 2-3%, a maturity of 20 years and a grace period of 2-5 years. A soft loan.

On the flip side, a Chinese company must be the principal contractor; for equipment, materials, technology and services, there will be purchase preference for Chinese firms and 50% of total procurement will be from China. Certainly, there is no compulsion to accept these terms. There is choice and soft loans on similar terms are also available from multilateral institutions.

However, multilateral institutions will insist on structural reforms, which the Chinese don’t. Hence, the present Kenyan government takes a Chinese loan for an infrastructure project that’s unlikely to yield even that 2-3% and a future Kenyan government and Kenya’s citizens face the consequences.

Is this likely? One doesn’t necessarily know about future Kenyan default, though one must mention that debt/GDP ratios are high in Kenya. But since Cambodia and Sri Lanka have already faced that Chinese-loan-driven excess-capacity-infrastructure problem, it is reasonable to expect other countries will also do so. In a perverse way, a domestic Chinese problem is being exported.

One Belt, One Road (OBOR) is like a hold-all, in the sense that it has several independent, but linked, infrastructure projects. There is Silk Road Economic Belt, Maritime Silk Road, New Eurasian Land Bridge, China Pakistan Economic Corridor (CPEC) (which India can’t possibly endorse) and corridors through Mongolia, Russia, Central Asia, West Asia, Indo-China, Bangladesh, India and Myanmar. For CPEC, Pakistan has got loans on extremely attractive terms (a few limited bits are even interest free). But on an average, it is still a positive rate of interest of more than 1.5%.

It is a wonderful idea to invest in infrastructure. One doesn’t have to cite studies done by economists, linking infrastructure creation to welfare and GDP growth. The Romans knew it, they built roads and bridges everywhere. Sher Shah Suri knew it, and Kautilya before him.

But these welfare and GDP calculations factor in multiplier benefits, known as positive externalities. The social rate of return on a specific infrastructure project may be high. The private rate of return is not necessarily high and may not cover costs of borrowing. Cross-country empirical studies show higher social returns for medium income countries, not low income ones, and many in OBOR are the latter. There is a lunatic express element.

Peregrine
BRF Oldie
Posts: 3999
Joined: 11 Aug 2016 06:14

OBOR, Chinese Strategy and Implications

Postby Peregrine » 04 Jun 2017 14:17

X Posted on the Analyzing CPEC & STFUP Threads

Sri Lanka for sale?

On May 29, the BBC asked, “Is Sri Lanka up for sale?” According to the BBC, “Sri Lanka is allowing Chinese firms to take over key assets, as it struggles to repay loans it was given by China”. In 2007, the EXIM Bank of China began funding Sri Lanka’s Hambantota Port. The port was completed at a cost of $1.3 billion. The Chinese financed and built the 900MW Norochcholai Power Plant at a cost of $1.35 billion. In 2010, Beijing lent Sri Lanka $200 million to build an airport. In 2012, China lent an additional $810 million.

In 2011, the Mahinda Rajapaksa International Cricket Stadium was built at a cost of Rs700 million. In 2013, the Mattala Rajapaksa International Airport (near Hambantota) was built at a cost of Rs26 billion. The Southern Expressway was built at a cost of Rs776 billion. The Hambantota Sports Zone was built at a cost of Rs15 billion. In 2013, China lent to Sri Lanka and built $272-million railway.

Between 2008 and 2015, China lent $6 billion in aid and loans. Fast forward to 2017. The port of Hambantota now lies, more or less, abandoned. The Rajapaksa National Tele Cinema now lies, more or less, abandoned. The Mahinda Rajapaksa International Cricket Stadium now lies, more or less, abandoned. The Mattala Rajapaksa International Airport now lies, more or less, abandoned.

Lo and behold, Sri Lanka is having trouble repaying the debt incurred to build the port of Hambantota. As a consequence, Beijing has now taken over four of the seven container berths on a 35-year lease. Beijing is also acquiring 15,000 acres around Hambantota.

Lo and behold, Sri Lanka is having trouble repaying the debt incurred to build the coal-fired Norochcholai Power Plant. On April 17, 2017, the power plant broke down. On March 13, 2016, the power plant had ceased operations. In 2012, there was a leak in one of the boilers. Sri Lanka wants China to take over the power plant.

Lo and behold, Sri Lanka is having trouble repaying the debt incurred to build the Mattala Rajapaksa International Airport. Sri Lanka offered China control over some of the largest projects – including the Mattala International Airport and the Port of Hambantota – in return for debt relief.

According to Forbes, “Sri Lanka has a debt problem. After more than a decade of taking out huge loans to build large-scale infrastructure – most of which hasn’t yet produced adequate returns – the country is now struggling to make payments, and is looking for another way out”. Prime Minister Ranil Wickremesinghe is prepared to give control of large projects to Chinese companies. But according to Forbes, China’s Ambassador Yi Xianliang has clearly told PM Ranil Wickremesinghe that: “We are not interested. We want our money, not your empty airport”.

Sri Lanka is having trouble repaying its debt. Sri Lanka now owes $58.3 billion to foreign lenders and 95.4 percent of Sri Lankan government’s revenue is now going into debt-servicing.

According to the BBC, “We don’t like our land being given away to China,” says fisherman Aruna Roshantha, adding that “Not just China, if any country comes and takes land from Sri Lanka, we don’t like it. The government should protect our land, not sell it”.
Cheers Image

manjgu
BRFite
Posts: 1410
Joined: 11 Aug 2006 10:33

Re: OBOR, Chinese Strategy and Implications

Postby manjgu » 04 Jun 2017 20:30

just wondering what kind of feasbility study was done by the SriLankan govt to approve loans for these projects. Surely Rajapaksa was bribed. SL citizens should get his neck !!!

SSridhar
Forum Moderator
Posts: 21717
Joined: 05 May 2001 11:31
Location: Chennai

Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 05 Jun 2017 07:41

manjgu wrote:just wondering what kind of feasbility study was done by the SriLankan govt to approve loans for these projects.

Chinese do not want the partner country to produce any feasibility report or do any environmental impact analysis. The financial management of the projects are also totally crude. The decision-making process is opaque. They choose vulnerable countries too.

In the case of SL, it was the Chinese military help to Rajapakse in the final phase of the fight against the LTTE that made him overcome that evil group. This was exploited soon thereafter by the Chinese and the rest is history.

We know that in the case of Pakistan, it is China's transfer of nukes, missiles and diplomatic support that makes Pak indebted to China (apart from the Paki obsession against India and their whoring mentality). Even here, the Chinese use the more reliable Army rather than the political leaders/parties to get its things done.

In Myanmar, it was the corrupt and powerful military junta.

After the c.2014 coup, the military-ruled Thailand has distinctly shifted its foreign policy closer to China. There is a very increased cooperation between China & Thailnad today with much expanded military exercises, purchase of submarines & tanks from China, building a naval base etc.

vijayk
BRF Oldie
Posts: 3048
Joined: 22 Jun 1999 11:31

Re: OBOR, Chinese Strategy and Implications

Postby vijayk » 06 Jun 2017 23:20

http://www.firstpost.com/world/chinas-s ... 24395.html
A Joint Logistics Support Force has been established. This force will provide logistic support to all the services. A reduction of 3,00,000 personnel from the PLA was announced by Xi in September 2015. From these large-scale changes, it can be clearly seen that the entire armed forces of China are getting transformed.

The recession of 2008 hit the Chinese economy hard. Till then, China’s economic growth was based on the export model. Foreign investors started pulling their money out of China. The crisis that gripped the Shanghai Stock Exchange in 2015 resulted in the flight of foreign currency.

From a forex reserve of $3.9 trillion dollars, it is now hovering around US$ three trillion, a flight of approximately a trillion dollars from China’s economy. The recession created another problem for China, of excess capacity.


One of the reasons for the One Belt One Road (OBOR) Initiative of China is the excess capacity that China had for cement, steel, glass etc.

Today, all the economic activity and infrastructure projects in China are oriented towards this initiative. There are problems coming up in the execution of the project. India was conspicuous by its absence in the summit. The seven Arab countries cutting ties with Qatar on 4 June, 2017, is likely to affect China’s plans for the OBOR project in the region.

The China-European Union (EU) summit, which was held on 2 June, 2017, revealed the apprehensions of the EU. Catherine Wong, in her article inSouth China Morning Post, mentioned a European diplomat saying that "the initiative is about promoting globalisation which is positive. But it comes with Chinese characteristics. So, it is not really a market-oriented, liberal, rules-based globalisation that we would like to see. It seems to be more about hierarchy."

It is worth noting that representatives of many European countries did not sign the trade declaration at the OBOR summit in Beijing in May this year. Only time will tell whether China’s move to put all her eggs in the OBOR basket is a prudent one.

Thus, China as a country is in a state of flux. The jury is still out on why Xi chose to place China in such a predicament and how China will come out of it.

chetak
BRF Oldie
Posts: 15848
Joined: 16 May 2008 12:00

Re: OBOR, Chinese Strategy and Implications

Postby chetak » 10 Jun 2017 16:45

India's plan to develop Iran's Chabahar port faces US headwinds



India's plan to develop Iran's Chabahar port faces US headwinds

10th June 2017

A security personnel looks on at oil docks at the port of Kalantari in the city of Chabahar. (Photo
NEW DELHI: Western manufacturers are shying away from supplying equipment for an Iranian port that India is developing for fear the United States may reimpose sanctions on Tehran, Indian officials say, dealing a blow to New Delhi's strategic ambitions in the region.

Lying on the Gulf of Oman along the approaches to the Straits of Hormuz, the port of Chabahar is central to India's hopes to crack open a transport corridor to Central Asia and Afghanistan that bypasses arch-rival Pakistan.

India committed $500 million to speed development of the port after sanctions on Iran were lifted following a deal struck between major powers and Tehran to curb its nuclear programme in 2015.

But the state-owned Indian firm that is developing Chabahar is yet to award a single tender for supplying equipment such as cranes and forklifts, according to two government sources tracking India's biggest overseas infrastructure push.

U.S. President Donald Trump denounced the nuclear agreement on the campaign trail, and since taking office in January has accused Iran of being a threat to countries across the Middle East.

Swiss engineering group Liebherr and Finland's Konecranes and Cargotec have told India Ports Global Pvt Ltd, which is developing the deep water port, they were unable to take part in the bids as their banks were not ready to facilitate transactions involving Iran due to the uncertainty over U.S. policy, the two officials said in separate conversations with Reuters.

These firms dominate the market for customised equipment to develop jetties and container terminals. One official said the first tender was floated in September, but attracted few bidders because of the fear of renewed sanctions. That fear has intensified since January.

"Now the situation is that we are running after suppliers," one official said, speaking on condition of anonymity because of the sensitivity of matter.

A Konecranes spokeswoman declined to comment beyond confirming the company was not involved in the project.

Cargotec and Liebherr did not respond to requests for comment.

Some tenders have been floated three times since September because they failed to attract bidders. A Chinese firm, ZPMC, has since come forward to supply some equipment, the same Indian official said.

THREAT OF SANCTIONS

Trump has called the agreement between Iran and six major world powers restricting Tehran's nuclear programme in exchange for lifting of sanctions "the worst deal ever negotiated".

Last month his administration extended relief on Washington's broadest and most punitive sanctions, while carrying out a wider policy review on how to deal with the Islamic Republic.

Uncertainty over U.S. policy is already causing long delays in contracts that Iran has sought with international firms to develop its oil fields and buy planes for its ageing airlines.

The lifting of United Nations and European Union sanctions in 2016 partly reconnected Iran with the international financial system crucial to trade.

But large international bankers with exposure to the United States remain unwilling to facilitate Iranian deals for fear of running afoul of narrower, unilateral U.S. sanctions that remain outside the nuclear deal and uncertainty over whether wider sanctions relief will continue.

India's ambassador to Iran said the process of procuring equipment for the Chabahar port was under way and that some of the customised cranes needed take up to 20 months to build. The banking situation was slowing improving, he added.

"Tenders are re-floated for a variety of reasons including technical specifications not being met, etc. Banking channels, in recent months, have in fact somewhat eased," Saurabh Kumar said in an emailed response to Reuters from Tehran. "If some companies do not participate, it really is their business."

India has been pushing for the development of Chabahar port for more than a decade as a hub for its trade links to the resource-rich countries of central Asia and Afghanistan. Access to those countries is currently complicated by India's fraught relationship with Pakistan.

Bureaucratic delays, difficult negotiations with Iran and the risk of incurring Washington's displeasure during the financial embargo in Tehran had meant there was little progress on the port until now.

But, prodded in part by China's development of Gwadar port, which lies barely 100 km (60 miles) from Chabahar on the Pakistani coast, Indian Prime Minister Narendra Modi's government has unveiled massive investment plans centred around the Iranian port, offering to help build railways, roads and fertiliser plants that could eventually amount to $15 billion.

So far, even an initial credit line of $150 million that India wants to extend to Iran for development of Chabahar has remained a non-starter as Tehran has not been able to do its part of work.

"They have not sought the loan from us because they haven't awarded the tenders, either because of lack of participation or banking problems," said the second government official.

Ambassador Kumar said the Iran had indicated it would be sending proposals shortly to tap the credit line.

Meena Singh Roy, who heads the West Asia centre at the Institute for Defence Studies and Analyses, a New Delhi think-tank, said increasing tension between Washington and Tehran would have an impact on the port project.

"The Chabahar Project has strategic significance for India," she said. "However ... nothing much seems to be moving due to new uncertainties in the region."

A_Gupta
BRF Oldie
Posts: 9790
Joined: 23 Oct 2001 11:31
Contact:

Re: OBOR, Chinese Strategy and Implications

Postby A_Gupta » 10 Jun 2017 18:13

http://www.eurasiareview.com/10062017-c ... -analysis/
A direct economic corridor between China and India would demand delineation of the border at the Line of Actual Control (LAC) between the two countries in some sectors. For this, it will be necessary to set up custom offices and develop certain infrastructure to facilitate trade through the border. But China is least enthusiastic on such an arrangement. It does not want to enter the Indian market directly through their common border, but only through the third country like the China-Pakistan Economic Corridor (CPEC), the Bangladesh-China-India-Myanmar Economic Corridor (BCIM) and the proposed China-Nepal-India Economic Corridor (CNIEC). China intends to make entry into the Indian market without resolving border issues with India at the LAC

SSridhar
Forum Moderator
Posts: 21717
Joined: 05 May 2001 11:31
Location: Chennai

Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 10 Jun 2017 19:33

chetak wrote:India's plan to develop Iran's Chabahar port faces US headwinds

India's plan to develop Iran's Chabahar port faces US headwinds

India has consistently deferred to every wish of the USA on the Iran issue. Ms. Clinton promised us the transit route through Pakistan for Afghanistan and beyond. All she could do was to get one-way trade from Afghanistan; Pakistan would not budge. India must stand firm on the Chahbahar issue because that is an important route for us and we can't afford to end up without access to Afghanistan or CAR and optionless against the Chinese outmaneuvers.

A_Gupta
BRF Oldie
Posts: 9790
Joined: 23 Oct 2001 11:31
Contact:

Re: OBOR, Chinese Strategy and Implications

Postby A_Gupta » 10 Jun 2017 22:25

IMO, it is a little more than just fear of US sanctions.
e.g., https://news.vice.com/article/this-is-w ... ill-people
Not long ago, we received a press release that caught our eye — this is not a common occurrence — and was distributed by an NGO called United Against Nuclear Iran (UANI). Based in New York and headed by former US Ambassador to the United Nations Mark D. Wallace, UANI had photos of alleged criminals being hanged in front of spectators in the Iranian cities of Qaem Shahr and Babol. However, the condemned weren't hanging from traditional gallows. They were hanging from construction cranes that had one word painted on them: Atlas.
..
..
Being hanged from a crane is a particularly gruesome way to die. When the gallows we're all used to seeing in moves are used, the condemned’s neck often breaks as he falls, which typically causes near-instant death. When someone is hanged from a crane, however, he is slowly lifted from the ground by his neck and left to dangle in the noose. It can take more than 20 minutes to die.
..
..
According to UANI, its campaign has persuaded five large crane manufacturers to pull out of the Iranian market: Konecranes of Finland, UNIC and Tadano of Japan, Germany’s Liebherr, and most notably Connecticut’s Terex. Notable because the company's presidents have included both Filipov and his son Steve, and because the company claimed in 2011 that UANI didn't persuade them to stop doing business in Iran because they'd already stopped doing business in Iran.


But read the whole thing.

Peregrine
BRF Oldie
Posts: 3999
Joined: 11 Aug 2016 06:14

OBOR, Chinese Strategy and Implications

Postby Peregrine » 12 Jun 2017 04:40

X Posted on the Analyzing CEPC & STFUP Threads

After OBOR gets ready, Pakistan will become China’s colony: S Akbar Zaidi

NEW DELHI: Pakistan will become a colony of China once the China Pakistan Economic Corridor (CPEC) -- flagship project under the One Belt One Road (OBOR) initiative is operationalised, contended top Pak political economist S Akbar Zaidi on the very day the Shanghai Cooperation Organisation (SCO) Summit praised Beijing’s mega connectivity plan.

In a lecture titled “Has China taken over Pakistan” organised in Kolkata by think tank ‘Calcutta Research Group’ on Friday night Zaidi noted that the CPEC initiative is the most discussed but the least transparent among all the foreign initiatives in Pakistan.

“It is indeed a game changer, but not in the way our ruling classes have projected it to be. It will enslave Pakistan and undermine its sovereignty,” alleged Zaidi author of pioneering books --‘Military Civil Society and democratisation in Pakistan’ and ‘Issues in Pakistan’s Economy’.

“CPEC is a part of China’s OBOR initiative to expand its influence in the world and Pakistan is just the geographical space used by Beijing to reach the warm waters of the Persian Gulf. But in the process, Beijing blueprint will ensure complete control over Pakistan,” Zaidi further alleged.

Incidentally Zaidi’s comments came on the very day when SCO praised China’s Belt and Road Initiative (BRI). India, which went to the Summit as an observer and became a member, however, was not party to the final Summit document on this occasion. CPEC is the very project that has irked India as it passes through PoK besides the fact that OBOR or BRI initiative lacks transparency and is being implemented in a unilateral fashion.

Speaking at SCO Summit PM Narendra Modi took a dig at connectivity projects that infringes on sovereignty. Zaidi quoted Pak Senator Tahir Mashhadi, chairman of the standing committee on planning and development, who had described the CPEC corridor as the advent of “another East India Company is in the offing.” China has announced to invest whopping $ 62 bn in CPEC.

The most dangerous implication of the CPEC would be that Pakistan’s foreign relations, especially those with India, will be determined by the Chinese, the Pak scholar warned. “Pakistan’s obsession with China and CPEC will prevent any rapprochement between India and Pakistan unless the Chinese themselves initiate such a process and that they would do only if that fits into their grand design in the region. With China taking over Pakistan, providing it with undisclosed amount of investments, any any argument of increasing trade and economic cooperation between India and Pakistan lose out completely.” Zaidi blamed the Pakistani ruling elite for leading the country down the path of enslavement.

“Our ruling classes, especially the military, have first lived with the influence of US imperialism, then allowed unusual degree of Saudi intrusion in domestic, cultural and social affairs. Now they have prostrated themselves before Chinese imperial designs.”

Cheers Image

Peregrine
BRF Oldie
Posts: 3999
Joined: 11 Aug 2016 06:14

OBOR, Chinese Strategy and Implications

Postby Peregrine » 13 Jun 2017 13:44

Mods - Unable find a "Myanmar Thread". Please post this on a suitable thread.

Eye on China, India speeds up infra projects in Myanmar

NEW DELHI: Having missed several deadlines, and with China taking big strides, India is trying hard to speed up its infrastructure commitments in Myanmar. India's tardiness in project implementation has marred its reputation, even though India has extended over $1.75 billion in grants and credit to Myanmar.

Indian envoy to Myanmar Vikram Misri said India had completed building the Sittwe power and the inland water terminal in Paletwa. Speaking to a local publication, Global Light of Myanmar this week he said, "We have just awarded the contract for the final stage which is the road to be built from Paletwa to a point called Zorinpui which is on the border with Mizoram. I think the creation of this transport corridor, once it is fully functioning, has the potential to transform the economic landscape in the states through which it goes, Rakhine and Chin." Construction is expected to start in October, with a Rs 1,600-crore contract awarded for building 109-km road connecting Paletwa river terminal to Zorinpui in Mizoram.

India is also building the trilateral highway, or India-Myanmar-Thailand highway, which was originally targeted for 2014, but will now only be complete by 2020. Misri said projects there are underway. "We are repairing 69 bridges on the Tamu-Kalay road and also constructing the Kalaywa-Yagyi section of the highway. In Chin State which borders Mizoram in India, we are constructing a road that will connect Rhi on the border to the town of Tiddim."

India-Myanmar relations saw some official attention recently, when foreign secretary S Jaishankar went to Naypyidaw for foreign office consultations on May 27, but by and large this eastern neighbour has not seen the kind of high-voltage attention lavished on Bangladesh, Sri Lanka and Nepal. Yet Myanmar is crucial to India's Act East policy, particularly as India tries to balance out China's massive presence in the country.

Ironically, India is helped by Myanmar's own growing discomfort with China. China's Belt & Road (OBOR) project has seen an almost $10 billion investment in a port Kyaukphyu and a special economic zone, which, China has promised, will generate thousands of jobs.

Aung San Suu Kyi, state counselor and effectively the head of the civilian government, allowed the Chinese investment as Beijing-Yangon relations have improved under her watch, perhaps more than India. But there remains a popular distrust of China, which is largely absent vis-a-vis India.

Part of the problem is also security-related issues. India still worries about some of the insurgent groups that take sanctuary across the Myanmar border, though in recent years, the two security systems have worked quietly to combat them.

India has also raised alarm over the fact that a number of Rohingyas have found their way to Jammu & Kashmir, although that is more a failure on India's part. However, India reckons the road projects, including a couple of new ones in Kachin and Rakhine states would help the people of these largely poor areas, find some extra means of economic activity.

Cheers Image


Return to “Strategic Issues & International Relations Forum”

Who is online

Users browsing this forum: Jaeger, saip, schinnas and 40 guests