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4 April 2017 Question Bank

 

4th MAY 2017

QUESTION BANK

(1 Question)

 

Answer questions in NOT MORE than 200 words each. Content of the answer is more important than its length.

Links are provided for reference. You can also use the Internet fruitfully to further enhance and strengthen your answers.

 

GS II: BILATERAL - INDIA - CHINA

1.   What is OBOR? Should India join the OBOR initiative? Clearly state your stand with justification.

      (Repeat Question from 12 January 2017 Question Bank)

http://www.thehindu.com/opinion/op-ed/Missing-the-Asian-tailwind/article17024081.ece

http://www.thehindu.com/opinion/op-ed/chinas-one-belt-one-road-programme/article8179870.ece

http://www.thehindu.com/opinion/lead/the-dragon-beckons/article18379037.ece


One Belt, One Road (abbreviated OBOR):

  • It is a development strategy and framework, proposed by Chinese paramount leader Xi Jinping, unveiled in 2013, that focuses on connectivity and cooperation among countries primarily between the People's Republic of China and the rest of Eurasia,
  • It consists of two main components, the land-based "Silk Road Economic Belt" (SREB) and oceangoing "Maritime Silk Road" (MSR).
  • The strategy underlines China's push to take a bigger role in global affairs, and its need for priority capacity cooperation in areas such as steel manufacturing.
  • Russia and the Central Asian countries are linking their infrastructure to China's OBOR, to meet their long quest for a warm-water port.
  • Chinese investment is also attractive to Europe, Malaysia, Thailand and Myanmar.
  • China is fast replacing global rules with connectivity, the OBOR, through infrastructure, new institutions and integrated markets.
  • The massive investment has been welcomed, with prospects for shared prosperity.
  • United Nations Security Council resolution on security in Afghanistan includes reference to regional development initiatives including China'sBelt and Road Initiative(BRI).
  • India alone in continental Asia does not support the OBOR, which spans more than 65 countries, three-quarters of known energy resources, envisages an investment of $4 trillion and is estimated to cover two-thirds of the global population and GDP.




China's intent under BRI/ OBOR

  • BRI is a rich mix of economic, developmental, strategic and geopolitical motives. It is also the most ambitious global infrastructure project ever envisaged by one country.
  • Among Chinese objectives of the BRI/ OBOR are :

1.     finding outlets for excess capacity of its manufacturing and construction industries,

2.     increasing economic activity in its relatively underdeveloped western region,

3.     creating alternative energy supply routes to the choke points of the Straits of Hormuz and Malacca, through which almost all of China's maritime oil imports pass.

Political objectives include:

4.     strengthening China's influence over swathes of Asia and Africa,

5.     buttressing its ambitions to be a maritime power

6.     developing financing structures parallel to (and eventually competing with) the Bretton Woods system.

  • Connectivity and infrastructure development are unexceptionable objectives. Much of Asia lacks them and the finances required to develop them.
  • China argues that connectivity provided by the BRI would enhance economic cooperation and promote peace.


Concern's over OBOR

  • Analysts have highlighted a number of potential issues:

1.     Chinese overcapacity may override host countries' development priorities in project selection;

2.     political tensions between countries may prevail over considerations of economic benefit;

3.     local elites may corner the "spoils" from new projects, thereby exacerbating social tensions; and

4.     financing strategies may result in countries sleepwalking into a debt trap (the Hambantota development projects in Sri Lanka provide a telling example).

  • Much will depend on how sensitive China is to international and local concerns on these counts.


 

Belt and Road Forum for International Cooperation (BRF) 

  • It is being hosted by China in mid-May 2017.
  • The declared purpose is to review progress of the BRI, obtain perspectives of stakeholders and plan new trajectories of cooperation.
  • China is working towards ensuring high-level global attendance at the BRF.
  • Whatever its other objectives, the principal role of the forum is to showcase international endorsement of President Xi's strategic vision of economic cooperation for peace.

 

Why China wants India to join OBOR?:

  • China's national goal is to double its 2010 GDP and per capita income by 2020 for which the OBOR is considered essential.
  • China is keen that India join that initiative, providing the opportunity to reset relations.
  • China owes everything it has achieved to world trade; trade flourishes only when there is peace and is, therefore, the first casualty of war.
  • Chinese economy took a sharp turn for the worse in 2012, it found a new, even more urgent, reason: with its huge deficit in infrastructure and its still reasonably high growth rate, India was the only country left that could absorb enough of China's output of machinery steel and cement to substantially ease its crisis of overcapacity.

 

India's objection:

  • Officially, India says it cannot endorse the BRI in its present form, since it includes the CPEC, which runs through Indian territory under illegal Pakistani occupation (Gilgit-Baltistan).
  • Some analysts have argued for the more "pragmatic" approach of a partial endorsement: as the initiative rolls out in various countries, India can engage with them (and with China) to promote projects that would be of benefit.
  • However, China's argument, that India would be "isolating" itself by staying out, is a pressure tactic: roads, ports and railways are public goods, which cannot be open to some and closed to others, based on nationality.


 

Scope for give and take

  • The sovereignty issue needs to be addressed.
  • Would China be willing to declare that the CPEC is not a component of the BRI but a separate bilateral China-Pakistan project?
  • China's Foreign Minister declared that the CPEC does not change Beijing's stand on Jammu and Kashmir.
  • A senior Chinese diplomat was more explicit, drawing attention to Article 6 of the 1963 China-Pakistan "boundary" agreement (in which Pakistan ceded the "Trans-Karakoram tract" to China), wherein the two sides agreed that after the J&K issue is resolved, China would renegotiate the boundary with the relevant sovereign country.
  • Would China be willing to say the same today about the CPEC - that once the status of Gilgit-Baltistan is agreed bilaterally between India and Pakistan, China will renegotiate with the sovereign authority the terms of transit of the corridor?

 

India needs to regain its glorious past:

  • There has been a tectonic shift in the global geopolitical economy, to which powers such as the U.S., China and Russia have responded. However, India is yet to formulate a worldview even as Asia, after a gap of 260 years, is again set to become the centre of the world.
  • Till 1757, India was the richest country with its wealth based on textile export: India clothed the world.
  • The choices we made enabled the British to secure the "Diwani" of Bengal.
  • The loot oiled the Industrial Revolution (textile production), and brought about colonisation and impoverishment.
  • In 1950, India was richer than China; now it is a fifth the size of the Chinese economy.
  • China will soon surpass the U.S. as the largest economy, and a young and digital India can overtake China by 2050. How do we achieve our potential?
  • NITI Aayog has yet to develop a strategy laying out how India can become a $10- trillion economy by 2032.


India's sphere of influence shrinking:

  • The "Look East Policy" enunciated in 1992 does not have much to show for it other than the sale of coastal patrol craft to Vietnam.
  • In the west, India's investment of $500 million in the Chabahar port, mooted some years ago, is minuscule compared to China's investment of $46 billion in theChina-Pakistan Economic Corridor (CPEC)ending in Gwadar, a port just 100 miles away.
  • Despite investments in Afghanistan, political discussions there exclude us.
  • In South Asia, only Bhutan can still be considered to be in our "sphere of influence".
  • India now finds itself increasingly isolated in continental Asia.



India should join OBOR:

  • The Modi-Xi joint statement in May 2015 recognised the two countries as "two major poles in the global architecture".
  • We should become a partner in the OBOR adding a "Digital Sustainable Asia" component, an area where we have global leadership, shaping the infrastructure and markets around two nodes.
  • We should also see Pakistan-sponsored terrorism as a symptom of the domination of the military with the OBOR leading to strengthening of democratic control.
  • Mr. Trump's policy shift considering a deal with China on trade as more important than security concerns has important lessons for us; focus on GDP rather than the NSG, Masood Azhar and the Cold War military logic of a two-front conventional war.
  • These problems will be resolved after we become a $5 trillion economy and the leverage it will provide.
  • There are encouraging signs that we have begun to think strategically by balancing cross-border terrorism with cross-border water flows and greater reliance on endogenous cybersecurity and missiles.



 


 

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