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OBOR, Chinese Strategy and Implications

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Re: OBOR, Chinese Strategy and Implications

Postby chanakyaa » 26 May 2017 07:34

SriJoy, "joining CPEC" (or whatever he11 even means) and FTA with China are completely two different things. And, you are assuming that outside of CPEC/OBOR etc. there is no trade between India and China. In fact, China runs a trade surplus with India. Unfortunately, the argument of exchanging revokable contractual agreements for permanent physical benefits is a theoretical classroom exercise at this point. If I were you, I would stay away from from such DDS-friend, let alone listen to his conclusions :D

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Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 26 May 2017 07:35

SriJoy, China has a law that anybody who conceded Chinese territory to a foreign country is to be executed, like Blasphemy having death as the only punishment. Therefore, no Chinese leader in his senses can accept for trading Tawang/Aksai Chin etc for something else especially after having claimed these unambiguously as Chinese territories. I am posting separately on the boundary issue (something I have posted here before but worth a recall now that your friend has raised the McCartney-McDonald Line)

Secondly, China wants hegemony. It is not interested in the lofty 'Vasudeiva Khutumbakam' etc. It has determined that India is its competitor and spoilsport in Asia. It wants to constrain, emaciate & shackle us. It believes that by keeping India under pressure (at China border, Pakistan, world fora, and by denying India its due etc), it would make India sweat it out thereby dissipating its energies and not concentrating into growing its economy. It feels that it has been successfully doing this. It also feels that the cost borne by it for its India-effort is insignificant because of its huge political & economic clout. The enormous extent to which China has gone against India over the years even putting its reputation at stake means that there cannot be a turnaround at all. Why should it agree to a deal that would allow India to prosper?

Thirdly, assuming that we would forever be only be a service-oriented economy and not a manufacturing one and committing on that would be an enormous blunder of the Gandhi/Nehru proportions. We never know what future has in store for us.

China's opposition to our joining UNSC & NSG has the basic Chinese angle of protecting its own interests. This is unalterable unlike its opposition to Masood Azhar which is more to pander to Pakistan and make India expend a lot of diplomatic effort and keep it off-balance. Therefore, China would never agree to our joining UNSC (NSG, being a private group may eventually happen, but China wants to delay this as much as possible). Therefore, do not expect China to relent at all on the UNSC issue. It went to the extent of open deceit in this issue which I want to recall below
In mid-September 2015, the UN General Assembly (UNGA) passed a historic resolution to continue further discussions on the expansion of the UNSC in the Intergovernmental Negotiation Group (ING) on the basis of a ‘framework document’ that has been arrived at over a long period of time. China tried to trip it by stealthily trying to introduce in the UNGA Resolution a paragraph on un-necessary technicalities in order to delay the process by several more years. India saw through the game and reversed it by even launching a protest at UNGA president, Sam Kutesa's residence over the weekend. China contacted several nations to force the issue but India’s strength prevailed upon in the end and China had to beat a retreat. Then China began working on the Jamaican government to remove its UN representative, Courtney Rattray, who drafted the text based on which future negotiations would take place so that a new incumbent would be unaware of the intricate and lengthy process behind drafting the text and China can leverage him/her to have its way. In fact, the arrest of former president of the UN General Assembly, John Ashe, on charges of bribery by the Chinese has vindicated India's suspicion that key top level officials in the UN system were being paid off to delay or scuttle the Security Council reform process. In early October 2015, John Ashe, former envoy from Antigua & Barbuda was charged by US attorney Preet Bharara for accepting a bribe of $1.3 million from Chinese businessmen and officials for support for a multi-billion dollar "south south" UN-sponsored conference centre in casino capital Macau. Bharara's complaint also stated that other Chinese nationals paid Ashe hundreds of thousands of dollars to facilitate their businesses in Antigua. While only some of the details of the bribery processes have been made public, they are enough to provide a clue to the methods China uses to influence UN processes. A part of this, they believe, has to do with influencing the progress of UN Security Council reform which China has steadfastly opposed. As president of UNGA between 2013-2014, Ashe started out by setting up an advisory body which drafted a 'non-paper' on the negotiations for UNSC reform. This, Indian officials say, was a simplified version of the 300-page draft negotiation document that was agreed to later in September 2015. India was an enthusiastic supporter of the 'non-paper' which they hoped would later become the draft text, because the advisory body was representative of the major world groups. However, mysteriously for Indians, Ashe backed out from making this the text at the last moment. This came as a blow to India's hopes, and it took a couple more years before the text was adopted. In a reprise, the last UNGA president Sam Kutesa, also wavered at the last moment, inserting paragraphs (inspired by China, say Indian officials) that would have dealt a big blow to the UN process. But this time the G4 and other countries prevailed on Kutesa, and the text went through.

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Re: OBOR, Chinese Strategy and Implications

Postby shiv » 26 May 2017 07:37

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 ?

There are so many areas where this statement is ignorant that I should ignore it but because people come to BRF and read and might start thinking that this is a good idea simply because BRF has a reputation I will do what I can to demolish this delusion.

China can give us 80% of Aksai Chin today - but they can take it back in a jiffy because it is difficult to hold militarily. And an India that has given up industrial competition to China will be an international weakling who will not be able to stand up to 2 days of war. That aside China will never give up the access that the G219 highway through Aksai Chin gives them

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. UN or no UN a nation breaks into the top echelons of world power by being an economic and military giant. Not by giving concessions to China. licking ass, making ourselves weaker and wagging our tails like eager puppies that "We will get UNSC seat"

Sorry if I sound harsh. But the idea has pissed me off. I speak my mind. That aside. WRONG THREAD
Last edited by shiv on 26 May 2017 10:48, edited 1 time in total.

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 26 May 2017 07:45

Whatever Beijing May Say, But A Credit Downgrade Right After The OBOR Jamboree Is Embarrassing









Whatever Beijing May Say, But A Credit Downgrade Right After The OBOR Jamboree Is Embarrassing


V Anantha Nageswaran

- May 25, 2017,

Whatever Beijing May Say, But A Credit Downgrade Right After The OBOR Jamboree Is Embarrassing

SNAPSHOT
Moody’s downgrade of China’s sovereign debt might not be a surprise but its timing was unexpected. If anything, the surprise is that it took so long for them to act.


Moody’s downgraded China’s sovereign credit rating from Aa3 to A1 and upgraded its outlook for the rating to ‘stable’ from ‘negative’. That is, it does not expect to downgrade China again anytime soon.

As soon as it happened, many dismissed it. The Chinese government does not borrow in foreign currency and hence, a credit rating action by an international agency does not really matter. Well, not so fast. Even Indian sovereign does not borrow in foreign currency. Yet, its credit rating is just above junk bond rating and is often cited in many commentaries on India’s fiscal health. So, let us not be too nonchalant about it, on behalf of China. Certainly, the Chinese government won’t be.

The fact is that this is the first China rating change by Moody’s in nearly thirty years. It does make people sit up and take notice. Second, China has just come off the One Belt One Road conference where it assembled many foreign leaders. It was almost an emperor’s durbar with the little chieftains in attendance. Hence, to have this happen within a week of that jamboree is a bit of an embarrassment that China could have done without.

For China, ‘face’ matters a lot and hence, a foreign credit rating agency from a country that is, in its view, fast losing its pre-eminence is a reminder to China that the world order had not changed yet. That would be quite annoying.

For India, it would be a bit of a Schadenfreude because India had raised questions about the debt burden it would create for the countries involved. Moody’s downgrade vindicates India in a way.

Second, Arvind Subramanian, the Chief Economic Advisor to the Government of India had been fiercely critical of the credit rating agencies for their lopsided credit rating of India and, say, China. He called the chasm between the sovereign credit ratings of both countries indefensible. India was just above junk bond rating and China’s credit rating was Aa3. He might be somewhat mollified or feeling vindicated although he was batting for an upgrade for India and not so much downgrade for China.

As for China’s economic fundamentals, they had justified more than a one-notch downgrade long time ago. In its Article IV report last year, the International Monetary Fund had pointed out that China’s ‘augmented fiscal deficit’ was slightly above 10 per cent of GDP in 2016 (p.43). Its public debt ratio too is correspondingly much larger and rising. Even then, no one has the faintest idea of how much debt China’s local governments have taken on and how much of it would devolve on Beijing.

Further, China’s banks are swimming in a sea of bad debts to local government funding vehicles, to State-owned enterprises and, further, on their part, have sold these debts as Wealth Management Products to their private clients, looking for a higher yield with no risk. Their official non-performing asset ratio is less than two per cent. But, private estimates range from 5 to 25 per cent. Fitchratings, another credit rating agency, puts it at 15 per cent. Therefore, objective fundamentals warranted a lower credit rating for China.

A colleague had a legitimate question as to why this downgrade did not come earlier, when China’s fundamentals were dodgy as in, say, at the beginning of 2016 or in August last year, etc. The answer is simple. It is that the credit rating agencies did not want to pour oil into the fire and turn China’s turbulence into a self-fulfilling rout. It is better to do it when times are quieter.

Second, the scale of the estimates being touted for the ‘One Belt One Road’ initiative might have influenced Moody’s. It is our guess. The number is variously estimated at 900 billion to 1 trillion US dollar.

Hence, this downgrade could be a pre-emptive warning.

The downgrade, while being meaningfully negative for those borrowers that rely on the sovereign rating to price their own debt, may also make the Chinese government think a bit harder about the next round of debt-funded reflation once it gets bored or frightened of the current round of de-leveraging that it is supposedly pursuing.

In all, Moody’s downgrade of China’s sovereign debt might not be a surprise but its timing was unexpected, surely. If anything, the surprise is that it took so long for them to act and the question is why only one notch down.

This article in the Wall Street Journal comparing China and Japan is a good read. Moody’s rates both countries alike now.

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Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 26 May 2017 07:58

On the McCartney-McDonald and other similar boundary lines . . .

Geographically, three mountain ranges are important in understanding the dispute. The Himalayas (the Westernmost), the Karakoram (in the middle) and the Kun Lun (the Easternmost). They all meet at the Pamir Knot at the Wakhan Corridor. The Pamir Ranges then extend westwards first into Hindu Raj Ranges and afterwards, the Hindu Kush Ranges. Tibet lies enclosed among the Himalayas, Karakorams and the Kun Lun. The Karakoram is bounded on the northeast by the edge of the Tibetan Plateau, and on the north by the Wakhan Corridor and the Pamir Mountains.The southern boundary of the Karakoram is formed by the Gilgit, Indus, and Shyok Rivers, which separate the range from the north western end of the Himalaya range proper. The Karakoram runs right across the Aksai Chin and bisects it. The first Boundary Commission set up by the British in c. 1846 determined that the Karakoram range formed the eastern limits of J&K Princely State. The KunLun Mountain range is on the eastern extremity of Aksai Chin. The Tibet-Sinkiang Highway (built by China in 1957) passes right between the Karakoram & the KunLun ranges in Aksai Chin.

The border story starts in the year 1865 when British Surveyor W.H.Johnson surveyed the land extent of the State of Jammu & Kashmir. The Kashmir Maharaja’s outpost at Shahidullah (now renamed as Xaidulla by the Chinese) made Johnson include the Kun Lun watershed (further east of the Karakoram) as part of J&K. Pangong Lake (Pangong Tso in Tibet) is the southern end of the Johnson Line and is about five hours drive from Leh through the third highest motorable pass, Chang La. The Pangong Tso is south of the great bend of the Shyok River around Siachen just before the Nubra River joins it. Thus, Shaidullah (further north of the Karakoram Pass) made the eastern end of Johnson’s survey while Pongong Tso made the southern end of the survey for Ladakh. There existed therefore a gap in the boundary between Pongong Tso and Shahidullah through the Karakoram Pass (the Karakoram pass was never in dispute and which was already accepted as forming the border between Ladakh and Tibet). The Johnson Line thus confirmed Aksai Chin as part of J&K. By 1878, China had conquered Eastern Turkistan (later known as Sinkiang and now Xinjiang) and had erected boundary markers at the Karakoram Pass.

In c. 1897, Sir John Ardagh proposed a boundary line along the crest of the Kun Lun north of the Yarkand River (The Yarkand River orginates in the Karakoram very near Siachen Glacier. One tributary of the Yarkand is the Shaksgam River. It is the Shaksgam valley that Pakistan conceded to China in c. 1963 as part of the Border Agreement with China). This proposal fixed the gap between Pongong Tso and Shahidullah through the Karakoram Pass. These lines together became known as the Johnson-Ardagh Boundary Line.

In c. 1899, Britain re-drew the boundary as China and Britain became friends and the boundary was re-fixed along the Karakoram rather than Kun Lun further east as the Johnson-Ardagh line did. This new line was known as McCartney-McDonald Line. The Chinese never replied to the British proposal. Britain used both boundaries according to the exigencies of circumstances.

India, since its independence, has recognized only the Johnson-Ardagh Line in Ladakh which gives the entire Aksai Chin to India.

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Re: OBOR, Chinese Strategy and Implications

Postby sudarshan » 26 May 2017 08:29

SriJoy, one does not put non-negotiable items on the bargaining table. Period. Arunachal Pradesh, Aksai Chin, Ladakh, POK are non-negotiable. Regardless of whether or not China accepts that. Getting China to "accept India's claim" on any of these, or even to accept that these items are non-negotiable, is not a victory. Getting China to (on its own) understand the futility of even trying to get India to make any kind of concession on these non-negotiable items, is a desirable outcome (not a victory). There is no victory in non-negotiable items, but there can be resounding defeats, born of exactly the kind of thinking your friend is advocating.

The Bhagavad Gita says - every organism has the right to defend itself against external aggression. This is non-negotiable. Getting some other organism to accept your right to self defense is not a victory. If the question even arises, of getting somebody else to accept your non-negotiable claims, that is rank stupidity.

The question of even bringing these issues to any kind of bargaining table, simply does not arise under any circumstance. FULL STOP. This, BTW, is China's stance on Tibet or Taiwan or the One-China policy.

"What is mine, is mine. What is yours, is negotiable."

Edit: So in that spirit, let me propose a better bargain with China. In return for their support for our entry into the UNSC, the NSG, the XYZE, the UPeeOnMee etc. etc., and in return for their immediate and permanent cessation of all incursions into sovereign Indian territory and for maintaining a permanent 200 mile demilitarized zone on their side of the border, India will agree to temporarily drop all claims on Inner Mongolia and Manchuria (for 50 or a 100 years), and will also pardon the amounts owed by China to India for mooching off of our IP, in the form of Buddhism, Kalaripayattu (which became Karate), culture, language, assorted scientific inventions, calendars, and literature. Sound like a good bargain?

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Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 26 May 2017 12:20

India quietly boosts Asean ties as OBOR looms large - Aradhana Takhtani, Economic Times
While just a week ago, several countries in Asia and South East Asia re gion were swept into the massive One Belt One Road (OBOR) initiative of China, India, in a quiet and unobtrusive manner, reached out to the $2.6 trillion regional economy of ASEAN, under its Act East policy. Participating in the 25th year celebrations of India-ASEAN partnership, a delegation of innovators and start-ups to the ASEAN-India Biztech Expo and Conference, organised by AIBC (ASEAN-India Business Council), with the belief that the leap to the next growth phase will ride on the huge potential for SMEs and private sectors.

Didar Singh, FICCI secretary general, is clear India has a definite and different approach to push trade between the two steadily growing economies despite China's aggressive forays in infrastructure involving all SE Asian countries. He said, “India and ASEAN both have similar development scenarios and challenges, whether it is Indonesia or Thailand, besides having physical and historical linkages. Moreover, India is quickly moving its start-up ecosystem from disruption to innovation and this is where I think the return on investment will be huge. Private partnerships will be main driver.“

On the other hand, China's government-driven, huge investments seems an attractive reality for countries like Malaysia, as was evident from the view of Datuk J Jayasiri, secretary general of international trade and industry ministry (MITI). Expressing excitement at the OBOR initiative, he said, “This harks back to the time when Melaka port was the most significant trade post and now this route will bring prosperity again.“

But he quickly pointed out that India and ASEAN, and particularly Malaysia have an immense potential for economic engagement through private sector.

This also found resonance with other experts and speakers present at the two-day conference, where parleys on the Regional Comprehensive Economic Partnership (RCEP) was being touted as resolving soon what with TPP failing to come through. India is actively involved in the RCEP negotiations which when established will have a combined GDP of US$23 trillion with a 32% share of the world goods exports. T S Tirumurti, Indian high commissioner to Malaysia, who has been actively involved with promoting bilateral ties with ASEAN , said, “With Make in India, Startup India and Digital India, it is important that we become part of the regional supply chain feeding into the global supply chain. The natural propeller in India-ASEAN trade is the `centrality' of ASEAN that India adheres to. This epitomises strength in their oneness and this principle also acknowledges the criticality of the role ASEAN plays in the region.“

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Re: OBOR, Chinese Strategy and Implications

Postby SriJoy » 26 May 2017 13:18

shiv wrote:There are so many areas where this statement is ignorant that I should ignore it but because people come to BRF and read and might start thinking that this is a good idea simply because BRF has a reputation I will do what I can to demolish this delusion.

China can give us 80% of Aksai Chin today - but they can take it back in a jiffy because it is difficult to hold militarily. And an India that has given up industrial competition to China will be an international weakling who will not be able to stand up to 2 days of war. That aside China will never give up the access that the G219 highway through Aksai Chin gives them


I don't think China will give up G219,either. But as i noted earlier, they did accept the McCartney-McDonald line as the 'official boundary' till 1959. If you look at it, it gives roughly 60% of Aksai Chin to India and retains the 40% that has G219 passing through it. Besides, i am not entirely convinced that our supply lines to the McCartney-McDonald line is at a significant disadvantage to the Chinese supplies to that line, making it untenable.

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. UN or no UN a nation breaks into the top echelons of world power by being an economic and military giant. Not by giving concessions to China. licking ass, making ourselves weaker and wagging our tails like eager puppies that "We will get UNSC seat"


1. It is not about 'bragging rights'. Its about having a veto that prevents an official, UN declaration against us. Theoretically, as it stands now, a unanimous UNSC council can majorly undermine us diplomatically. True, its not in everyone's interest to piss us off and pick on us, but why should we leave that to chance ? The ability to veto a UN military resolution, which happens at the UNSC level, is a significant diplomatic security to have.

2. PRC itself is proof of 'weaselling its way' into the UNSC. When PRC joined the UNSC, its economic might was not even comparable to West Germany or Japan and its military was in the same boat as ours - humongous but a generation or two behind the 'cutting edge' in top tier weapons.

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.

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Re: OBOR, Chinese Strategy and Implications

Postby SriJoy » 26 May 2017 13:21

sudarshan wrote:SriJoy, one does not put non-negotiable items on the bargaining table. Period. Arunachal Pradesh, Aksai Chin, Ladakh, POK are non-negotiable. Regardless of whether or not China accepts that. Getting China to "accept India's claim" on any of these, or even to accept that these items are non-negotiable, is not a victory. Getting China to (on its own) understand the futility of even trying to get India to make any kind of concession on these non-negotiable items, is a desirable outcome (not a victory). There is no victory in non-negotiable items, but there can be resounding defeats, born of exactly the kind of thinking your friend is advocating.

The Bhagavad Gita says - every organism has the right to defend itself against external aggression. This is non-negotiable. Getting some other organism to accept your right to self defense is not a victory. If the question even arises, of getting somebody else to accept your non-negotiable claims, that is rank stupidity.

The question of even bringing these issues to any kind of bargaining table, simply does not arise under any circumstance. FULL STOP. This, BTW, is China's stance on Tibet or Taiwan or the One-China policy.

"What is mine, is mine. What is yours, is negotiable."

Edit: So in that spirit, let me propose a better bargain with China. In return for their support for our entry into the UNSC, the NSG, the XYZE, the UPeeOnMee etc. etc., and in return for their immediate and permanent cessation of all incursions into sovereign Indian territory and for maintaining a permanent 200 mile demilitarized zone on their side of the border, India will agree to temporarily drop all claims on Inner Mongolia and Manchuria (for 50 or a 100 years), and will also pardon the amounts owed by China to India for mooching off of our IP, in the form of Buddhism, Kalaripayattu (which became Karate), culture, language, assorted scientific inventions, calendars, and literature. Sound like a good bargain?



I think you misunderstand me- i am not for 'give us UNSC + NSG membership = we will 'negotiate for border settlement'' scenario. I am saying the 'carrot approach'- give us our acceptable line on the border + UNSC + NSG = FTA with us. And yes, China did use its 'financial incentive' to de-legetimize Taiwan and even to this day, China uses 'lucrative contracts' as a lure to keep itty-bitty nations from siding with Taiwan. So they definitely use the 'we will give u money to accept our diplomatic position' type bribery as well.

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Re: OBOR, Chinese Strategy and Implications

Postby SriJoy » 26 May 2017 13:32

SSridhar wrote:SriJoy, China has a law that anybody who conceded Chinese territory to a foreign country is to be executed, like Blasphemy having death as the only punishment. Therefore, no Chinese leader in his senses can accept for trading Tawang/Aksai Chin etc for something else especially after having claimed these unambiguously as Chinese territories. I am posting separately on the boundary issue (something I have posted here before but worth a recall now that your friend has raised the McCartney-McDonald Line)

Secondly, China wants hegemony. It is not interested in the lofty 'Vasudeiva Khutumbakam' etc. It has determined that India is its competitor and spoilsport in Asia. It wants to constrain, emaciate & shackle us. It believes that by keeping India under pressure (at China border, Pakistan, world fora, and by denying India its due etc), it would make India sweat it out thereby dissipating its energies and not concentrating into growing its economy. It feels that it has been successfully doing this. It also feels that the cost borne by it for its India-effort is insignificant because of its huge political & economic clout. The enormous extent to which China has gone against India over the years even putting its reputation at stake means that there cannot be a turnaround at all. Why should it agree to a deal that would allow India to prosper?

Thirdly, assuming that we would forever be only be a service-oriented economy and not a manufacturing one and committing on that would be an enormous blunder of the Gandhi/Nehru proportions. We never know what future has in store for us.

China's opposition to our joining UNSC & NSG has the basic Chinese angle of protecting its own interests. This is unalterable unlike its opposition to Masood Azhar which is more to pander to Pakistan and make India expend a lot of diplomatic effort and keep it off-balance. Therefore, China would never agree to our joining UNSC (NSG, being a private group may eventually happen, but China wants to delay this as much as possible). Therefore, do not expect China to relent at all on the UNSC issue. It went to the extent of open deceit in this issue which I want to recall below
In mid-September 2015, the UN General Assembly (UNGA) passed a historic resolution to continue further discussions on the expansion of the UNSC in the Intergovernmental Negotiation Group (ING) on the basis of a ‘framework document’ that has been arrived at over a long period of time. China tried to trip it by stealthily trying to introduce in the UNGA Resolution a paragraph on un-necessary technicalities in order to delay the process by several more years. India saw through the game and reversed it by even launching a protest at UNGA president, Sam Kutesa's residence over the weekend. China contacted several nations to force the issue but India’s strength prevailed upon in the end and China had to beat a retreat. Then China began working on the Jamaican government to remove its UN representative, Courtney Rattray, who drafted the text based on which future negotiations would take place so that a new incumbent would be unaware of the intricate and lengthy process behind drafting the text and China can leverage him/her to have its way. In fact, the arrest of former president of the UN General Assembly, John Ashe, on charges of bribery by the Chinese has vindicated India's suspicion that key top level officials in the UN system were being paid off to delay or scuttle the Security Council reform process. In early October 2015, John Ashe, former envoy from Antigua & Barbuda was charged by US attorney Preet Bharara for accepting a bribe of $1.3 million from Chinese businessmen and officials for support for a multi-billion dollar "south south" UN-sponsored conference centre in casino capital Macau. Bharara's complaint also stated that other Chinese nationals paid Ashe hundreds of thousands of dollars to facilitate their businesses in Antigua. While only some of the details of the bribery processes have been made public, they are enough to provide a clue to the methods China uses to influence UN processes. A part of this, they believe, has to do with influencing the progress of UN Security Council reform which China has steadfastly opposed. As president of UNGA between 2013-2014, Ashe started out by setting up an advisory body which drafted a 'non-paper' on the negotiations for UNSC reform. This, Indian officials say, was a simplified version of the 300-page draft negotiation document that was agreed to later in September 2015. India was an enthusiastic supporter of the 'non-paper' which they hoped would later become the draft text, because the advisory body was representative of the major world groups. However, mysteriously for Indians, Ashe backed out from making this the text at the last moment. This came as a blow to India's hopes, and it took a couple more years before the text was adopted. In a reprise, the last UNGA president Sam Kutesa, also wavered at the last moment, inserting paragraphs (inspired by China, say Indian officials) that would have dealt a big blow to the UN process. But this time the G4 and other countries prevailed on Kutesa, and the text went through.


Excellent post, thank you ( Also your MacCartney-McDonald line history).

i do agree, that China will see this idea as 'not worth it', as it does include them conceding a permanent situation (UNSC/NSG/Border settlement are all permanent solutions, atleast on paper) for a temporary one (FTA).

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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.

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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.

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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.

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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.

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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."

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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.

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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.

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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.

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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

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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.

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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.

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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

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Re: OBOR, Chinese Strategy and Implications

Postby panduranghari » 30 May 2017 20:46

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

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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.

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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.

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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.

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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.

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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.

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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.

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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
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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

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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.

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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.

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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.

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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?

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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.

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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.

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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..........

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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!

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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.


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