Baneful Red Imperialism – The Chinese Dream

The Chinese State sponsored newspaper has been echoing a sugar coated narrative of  the Belt and Road Initiative; an ambitious CCP project that banks on ‘Shared Prosperity  and Development’.

Prima facie, the package ensures members of BRI to install economic governance  mechanisms, enhance regional connectivity and develop overall infrastructure required  to exploit natural resources, present untapped in respective nations for the purpose of  deepening trade relations with China, as per it’s ‘Go Out policy’.

This concept of a ‘Unified Large Market’ successfully depicts BRI as purely commercial  initiative, luring 150 member countries today, minus Bharat. What remains for analysis is the strategic implications of BRI and find out why China’s altruistic posturing could be a mere disguise, having military implications.

Project Renminbi

A report by Center for Strategic and International Studies points out that 89% of  contractors participating in Chinese-funded projects within the Reconnecting Asia  database (BRI undertaking in Asia) are Chinese state owned companies, contradicting  the rhetoric about BRI being global and open to all.

Credit plays a key role in favor of Chinese state-owned enterprises (SOEs) for bagging  foreign contracts as China has the largest number of companies of any country  represented on the Fortune Global 500 List. These SOEs often benefit from tremendous  scale and subsidies. This causes a rise in imports of construction-related goods from  China, depleting the forex reserves of the member nation. This move suppresses local  manufacturing and commences a vicious cycle of forced dependence on China.

China is successful at locking in higher interest rate payments against its extravagant  lending to BRI members through non-transparent contracts, agreeing on unnatural risks  and holding commercial property as collateral.

Take the case of Hambantota port, which was constructed and funded by substantial  Chinese investment. After Sri Lanka failed to repay the interest on its debt, China took equity in the port, as per the opaque bilateral contracts. Today Sri Lanka appears to be  stuck in a vicious circle of attempting to get out of debt while further getting  entrenched.

Through above mechanism, China successfully manages to achieve the following objectives:

1. Provide important but modest relief for Chinese manufacturing overcapacity. 2. Increase dependence on imports from China.
2. Artificially increase the demand for Chinese currency: Yuan.
3. Acquire equity in projects at strategic locations, which could later fulfill military objectives. (Discussed later)
4. Create a Sino-centric international trade mechanism, as an alternative to existing US led supply chain which has recently developed a disrepute due to sanctions.

Illegal China-Pakistan Economic Corridor (CPEC)

Bharat opposes the project on grounds of sovereignty and transparency, and does not  endorse joint statements on BRI in Shanghai Cooperation Organisation (SCO), owing to  the fact that BRI, along with CPEC passes through Gilgit-Baltistan in Pakistan Occupied Kashmir (POK). Further, Pakistan illegally ceded over 5000 square kilometers of the  territory in this region to China under China-Pakistan boundary agreement (1963).

Also, CPEC mentions no initiatives enhancing trade cooperation and connectivity  between Bharat and Afghanistan, Central Asian countries. The Bilateral nature of BRI  projects is of detriment to Bharat’s strategic interests as it would ensure unchecked  misuse of Indian ocean by Chinese vessels under the camouflage of trade with our  neighboring countries and could also alter Himalayan Ecology. Moreover, there is no  provision for technology transfer. It would be a demoralizing move to further deepen  economic relations with a country that lays its claim on territories below the McMahon  Line, which separates Arunachal Pradesh from Tibet and Aksai Chin.

Lastly, nobody with a speck of sense can claim that a “strong, stable, prosperous”  Pakistan is in our national interest. The global factory of state sponsored terrorism has  posed a serious threat to Bharat whenever it has received loans. A weak and unstable Pakistan/ No Pakistan is in Bharat’s best interest. The ongoing tensions on LoC and  activation of various other ISI modules within: K-propaganda, PFI 2047 document, hints towards a massive influx of Chinese loans worth USD 62 billion into Pakistan since  2015.

String of Pearls policy

Recent development of ports around Bharat, through BRI and CPEC projects are  perceived as part of string of pearls; a chain of commercial ports built and controlled by  China, wherein each pearl refers to a port. Although these are commercial ports, the  natural suspicion is that of their convertibility to Naval facilities in case of a conflict  against Bharat. It provides China access to the Indian Ocean Region (IOR).

China is aggressively pursuing this policy as a bid to control international maritime trade.  IOR plays a critical role in ensuring global trade and energy security. Being a  manufacturing giant and the second largest consumer of crude oil, China is desperate to  gain control over important choke points, notably the straits of Malacca, Hormuz,  Lombok and Bab-el-Mandeb.

The commercial ports, which are assumed to be part of above policy include:

1. Port of Sudan – Sudan
2. Djibouti – Djibouti
3. Gwadar – Pakistan
4. Male – Maldives
5. Hambantota – Sri Lanka
6. Chittagong – Bangladesh
7. Kyaukpyu – Myanmar

Thus, a successful implementation of maritime BRI projects poses a grave threat to Bharat’s national security. Consequently, Bharat has been engaging with stakeholders  and also western interests in this regard. A pointwise counter strategy developed is  mentioned briefly:

1. Chabahar – Iran
2. Sabang – Indonesia
3. Sittwe – Myanmar
4. Mongla, Chittagong – Bangladesh
5. Naval facilities – Oman, Singapore
6. Military exercises in IOR – QUAD countries
7. Construction of Coastal Radar networks in Mauritius, Seychelles etc.

It is not onerous for one to observe that BRI appears similar to the colonial East India  Company enterprise, as the project in the long run ensures unsustainable debt, broken  communities and unrestricted influence of Beijing in matters of sovereignty of the  member nations. The Chinese Dream appears as an imperialistic threat, one which must  be dealt with the help of Jaishankar Doctrine.

“If it can carry goods, it can carry troops as well”