Advertisement

  • News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
  • Editorial Calendar 19-20
BW Businessworld

The Eco-Politics Of CPEC And India

Off late China-Pakistan relationship has emerged as an important development in South Asia, which must be closely watched. China-Pakistan Economic Corridor (CPEC) and linking of Gwadar Port is an ambitious strategic plan by Chinese 'One Belt One Road' project. With this, China is eying to address multiple objectives. The development of CPEC is major step towards projection of its power outside its borders and an expansion of its territorial supremacy, which is a latent desire

Photo Credit : Shutterstock

1491565698_jtSAd4_CPEC-shutterstock.jpg

Off late China-Pakistan relationship has emerged as an important development in South Asia, which must be closely watched. China-Pakistan Economic Corridor (CPEC) and linking of Gwadar Port is an ambitious strategic plan by Chinese 'One Belt One Road' project. With this, China is eying to address multiple objectives. The development of CPEC is major step towards projection of its power outside its borders and an expansion of its territorial supremacy, which is a latent desire.

China is attempting stealthily to take an edge on autonomous regions of Xinjiang Uyghur and Tibet. Interestingly, this project will recognize the much-hyped 'String of Pearl Theory' and the revival of 'New Silk Route' via CPEC thereby checking Indian regional influence. With increased economic importance of China, it is trying to leverage by exploiting its economic interdependence, heavily skewed on to China. CPEC offers a strategic location and as an economic hub for China to the rest of the world and its strategic trade partners by connecting three major continents, Asia, Europe and Africa.. The fundamental hypothesis on which this concept paper is centered around is that CPEC will bring a major shift in global geo-eco-politics and will position China at the center. The increasing Chinese influence in South-Asia in particular and Asia and World will emerge as a major challenge to India in times to come.

China's ambitious project of "One Belt, One Road" (OBOR) and the revival of the "Silk Route" that includes the 'New Silk Route' and the '21st Century Maritime Silk Route' was started with the bilateral talks between China and Pakistan in 2013 during the visit of Chinese Premier Li Keqiang. The proposed project included linking Kashgar in northwest China with Gwadar Port on Arabian Sea coastline in Baluchistan. During Xi's visit, to Pakistan in April 2015, the two countries signed fifty-one agreements at an estimated value of $46 billion. An interesting add on to CPEC is that major power like Russia has shown an inkling and China has invited Iran to join hands to link Gwadar and Chhabar ports for commercial gains. The authors seek to investigate into the geo-strategic importance of CPEC and Gwadar port and its implications for China, Pakistan and repercussions on India. This research further attempts in analysing the eco-politics of CPEC, its challenge to the existing economic powers like USA, Germany, India and the overall impact on the world economy.

What is the strategic response to the volatility, uncertainty, complexity and ambiguity this mega project has put forth to India and the world, needs critical thinking and reaction yet a strategic response.

China's Game plan: Scholars of international politics believe that the Chinese president Xi Jinping's 'OBOR' project is a major strategic step towards projecting itself as an International power. China, through this project has signaled a new phase of its foreign policy by shedding its hesitancy and conservatism and tactically building a more confident and stronger role in international politics. As said earlier, at the same time, China is looking forward to address the problems of its domestic constituencies like the autonomous region of Tibet and Xinjiang Uyghur, sending a message that they have no option of cessation from the Chinese state.

Furthermore, the geo-strategic location of CPEC and Gwadar port creates a favorable condition for China to have its firm and long-term reliable presence in the Indian Ocean, close to the Persian Gulf. Strategically, the Silk Road Economic Belt (SREB), and the CPEC creates ing a vast network that connects the world. China can take a first mover advantage and leverage towards greater economic cooperation with its allies. What is India's response? And should be?
China is one of the biggest global traders other than European Union (EU) and that we must not discount that China is EU's second trading partner after USA. USA is an important trading partner of China followed by Hong Kong, Japan and South Korea. Thus, access to Indian Ocean via Gwadar port will enable China's naval warships and merchant ships to bypass Malacca Strait and overcome its "Malacca Dilemma".

The combined CPEC and SREB projects have the potential to open newer horizons for the Chinese economy. Recently, with Russia's request to use Gwadar port for accessing Indian Ocean is followed by Iran and Turkmenistan. Is India watching or has a plan in response to this volatility and challenge?

Pakistan's leverage: The other part of CPEC is Pakistan; hence it is interesting to investigate the leverage Pakistan intends over India. The project tacitly offers an exceptional opportunity to Pakistan by helping it in tackling the critical barriers in its economy: energy crisis, poor connectivity and little or no attraction to foreign investors. The $46 billion investment China intends to commit in the long run to Pakistan under the CPEC is definitely impressive. This investment exceeds all FDI Pakistan has received in the past several years, and perhaps is considerably more than entire aid Pakistan has received from the US since 9/11.

The catch is that Pakistan, through the politics of CPEC has been able to broaden its option on foreign policy. Pakistan's relationship with USA has deteriorated since the elimination of Osama bin Laden on its soil and there is constant demand in USA for cutting the aid to Pakistan. With Russia showing its interest to join hands with Pakistan to use the road link, Pakistan is intending to improve its relation with Russia. Here again, India must evaluate the complexity, uncertainties and ambiguity as a result.

Perhaps, these are hypothesis and complex scenarios but much depends on how much leverage China shall give to Pakistan in making choices on its foreign policy. Lets not forget that the major portion of this $46 billion is a debt given to Pakistan by China, a high degree if difficulty for Pakistan to repay to China. This will definitely lead Pakistan in becoming a Pawn to Chinese.

The rising cost of security to the CPEC and Gwadar Port is yet another problem for Pakistan, as the corridor passes through one of the most troubled regions of Pakistan. Pakistan is not a country whose economy rests on export of goods and services but on levy taxes. Does it understand this twist and ambiguity?

There is a strong possibility with Pakistan at loss on this bilateral relationship and China enjoying a free ride in boosting its economic and military might.

India's Imbroglio: It is contended that Chinese policy of "One Belt, One Road" and CPEC is mainly targeted to challenge the rise of India in South Asia in particular and Asia and the world in general. The increasing strategic ties between Pakistan and China through CPEC and the interest of Russia, Turkmenistan and other powers of Asia should be worrisome for India. Furthermore, CPEC will lead China to have the upper hand in the Arabian Sea as it will have complete control over the Strait of Hormuz through Gwadar?s seaport. This will likely have adverse effects on India's trade route.

Secondly the CPEC passes through the contested Kashmir region on which India has its claims. This has added fuel to the Kashmir issue, which by its very genesis is extremely complex. This will escalate the existing bilateral dispute between India and Pakistan.

Scenario for India: Soon after the first Chinese Naval ship arrived in the Arabian Sea, their experts stated that India must not see the Gwadar ports' operation in Pakistan as a strategic project meant to counterbalance India or anyone other than a route and obvious choice for business. How far can this be trusted is not distant? Let us not be confused by hindsight that Gwadar port has the stealth potential to be developed as a maritime base to strengthen Chinese naval power in the Indian Ocean. India has to realize this and decide its policy choices accordingly. Where is the foresightedness?

The question haunts on Indian policymakers on its options and trade offs. There are two immediate options India has: First, to lodge protest and delay or disrupt the development of CPEC, which might or might not lead in halting the project. Second being, reach out to Pakistan and China to have a trilateral cooperation to develop the project and get benefitted from it.

If India decides to go with the first option, the chance are minimal and its impact on the project. To counter the Pakistan's Gwadar port, Indian has started looking and must aggressively hunt at Chhabar port as an option. Sadly, India has delayed, an initiative, which could have been a strategic response.

The second option is in India joining hands with China and Pakistan. The greatest impediment and complexity in doing so is that India has always opposed any states interference in POK and so is with the CPEC project that India considers as illegal. Joining hand with China and Pakistan will compromise Indian stand on POK.

The tradeoff is complex, situation extremely volatile and ambiguous and uncertainty surrounds India on its geo-economics and geo-politics stature in the South Asian region.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Tags assigned to this article:
vuca Geo-Eco-politics gwadar port

Prof (Dr) Manoj Joshi

Dr. Manoj Joshi is a Fellow Institution of Engineers, Professor of Strategy, Director, Centre for VUCA Studies, Amity University, with 30+ years of experience in industry & research. He has authored 100+ articles, co-authored four books “VUCA in Start-ups” “The VUCA Company”, “The VUCA Learner”, “Technology Business Incubators” and is also on the Editorial Board of several international refereed Journals.

More From The Author >>

Dr Anuradha Rai

The author is an Assistant Professor Amity Business School

More From The Author >>

Suhayl Abidi

The author is Management Consultant

More From The Author >>