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India’s decision not to attend China’s mega trade summit is being seen as an unwise move which could isolate it at a time when Beijing’s voice is being heard with rapt attention across the world

~By Seema Guha

India’s decision to boycott China’s mega trade summit to promote its ambitious One Belt One Road (OBOR) project is inexplicable. When even the US, the one nation China is competing with to become the number one global player, thought it worthwhile to send an official delegation for it, India’s decision not to be part of the show despite repeated requests from China indicates a sullen refusal to face the reality.

China is invoking the ancient sea routes and road links to promote its maritime Silk Route and OBOR. Both are aimed at expanding links between China through Asia-Europe and Africa. The US and its western allies had earlier been suspicious of President Xi Jinping’s pet project, seeing it as China’s attempt to expand its sphere of influence around the world. But despite misgivings, few countries have boycotted China’s major diplomatic exercise. The US, Japan and South Korea, all wary of China’s growing military and economic might, were in attendance. So was Vietnam. In fact, its president, Tran Dai Quang, was present despite testy ties over South China Sea.

The summit was also attended by the presidents of Russia (Vladimir Putin), Turkey (Recep Tayyip Erdogan) and the Philippines (Rodrigo Duterte), the prime ministers of Sri Lanka (Ranil Wickremesinghe) and Pakistan (Nawaz Sharif) and Myanmar’s State Counselor Aung San Suu Kyi. In all, 30 leaders, including Xi, as well as 30 high-level representatives of other countries were in attendance. The UK, France, Germany and Israel all sent their representatives. UN Secretary General Antonio Guterres, World Bank president Jim Yong Kim and IMF director Christine Lagarde were also there.

So why not India? India has legitimate concerns, but the best way of dealing with this is not through a boycott. Successive governments in India have made it a point to engage with China, despite many differences, including a border war. Yet, the engagement had paid off in the past.

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Is Prime Minister Narendra Modi going to move away from the policy of engagement pursued so far? “I think staying out is churlish, though India has some major concerns, mainly about sovereignty. We had issues over the BRICS bank and the Asian Infrastructure Investment Bank (AIIB), but all this was settled through negotiations,” said analyst Srinath Raghavan. “With the US walking out of the Trans-Pacific Partnership, the next big idea is China’s flagship connectivity project, and India should be part of it. Talking through the differences would have made much better sense. India’s approach is unwise, especially as it has no alternative idea to put on the table,” Raghavan added. Considering that ties with China are strained at the moment, this will further aggravate matters.

One Belt One Road

China’s humungous OBOR project plans to connect Asia, Africa and Europe:

  • The two components of OBOR are Overland Silk Road and 21st century maritime Silk Road
  • OBOR will help China boost its domestic growth
  • In 2016, its total trade along the Belt and Road was $935.59 billion, of which exports along this route was $587.47 bn
  • In 2016, 25.7 percent of China’s entire trade was through Belt and Road
  • China has invested $14.5 bn as FDI in countries affiliated on this route
  • Estimated no of jobs created through OBOR: 1,80,000

Yes, India has many grouses against China and is angry that it constantly bats for Pakistan. It is also annoyed at Beijing’s repeated attempts to scuttle Delhi’s entry into the Nuclear Suppliers Group. It is even more annoyed that China had been going out on a limb for Pakistan in the UN Security Council to ensure that Masood Azhar, the Jaish-e-Mohammed chief, is not placed in the UN sanctions list. In fact, the Jaish is already under sanctions.

Infographic: Rajender Kumar
Infographic: Rajender Kumar

Bringing anti-India terror groups under sanctions has made no difference to these outfits. If we are to take the government argument that these terror entities are used by the Pakistan army against India, why should sanctions (which would freeze funds) ever pose a problem? Money would be generously provided by the army and the ISI to plan terror attacks against India. So the logic of approaching the UN may, at best, be a means to shame and name Pakistan. More likely, it is to play to the domestic audience. Whatever be the case, India cannot afford to be left out in the cold when all of her neighbours, except Bhutan, are enthusiastic about OBOR.

INDIA’S ANNOYANCE

Delhi, though, has a point about “national sovereignty’’ and cannot but protest about the China-Pakistan Economic Corridor (CPEC) which passes through PoK. As MEA spokesman Gopal Baglay said: “Our difficulty lies in the fact that the so-called CPEC forms a part of OBOR. It passes or proposes to pass through what is sovereign Indian territory and we have made our views in this regard very, very clear to the Chinese side.”

PRAGMATIC APPROACH

This is understandable. But India could have still sent an official team. That would have been more pragmatic. Like the US, India could have refused to sign the statement that was issued at the end of the summit. Former ambassador to China, Ashok Kantha, agrees that boycott is not the answer. He told India Legal: “India does have some major issues about OBOR. The importance of connectivity is stressed by both India and China. We should work with China on areas where our interests converge and they do on many issues.”

The US and its western allies had earlier been suspicious of President Xi’s pet project. But despite misgivings, few countries have boycotted China on this

He pointed out that China was keen to have India on board. “In my dealings with China, I have found that things move quickly when both India and China approach issues in a pragmatic manner. Take for instance the AIIB. Here, our interests converged and there was some fine-tuning of issues. As we did not want to be part of a wholly owned Chinese bank, our discussions went back and forth, and we finally decided on a multilateral institution. Today, we not just support the AIIB but also hold major stakes in it,’’ he said.

The AIIB is a multilateral bank with 52 members and lends money to countries for building infrastructure in the Asia-Pacific region. The Bank began operations from December 2015. Though the US and Japan are not part of it, European nations such as France and Germany as well as the UK are members. Despite US warnings, some of its closest allies like the UK are part of it. The Bank and the BRICS bank are part of a larger effort to build multilateral banking institutions to compete with the IMF-World Bank domination of financial institutions. However, the AIIB works closely with the IMF now.

Raghavan reminds us that India had problems with China even regarding the BRICS bank. Beijing wanted the voting pattern in the new bank to replicate that of existing western institutions. India resisted and got its way. The same approach would have benefited India greatly this time too.

DOMESTIC RHETORIC

Better sense should have prevailed and the ministry of external affairs should have given the PMO the right perspective. A major problem with the BJP government is its high-pitched domestic rhetoric. It is always keen to show voters that Modi is a strong leader who will not take orders from China, Pakistan’s friend. This may pay dividends during elections but not always in the international stage.

Box2China is pouring in as much as $124 billion for the OBOR projects. Most developing countries, urgently in need of roads, ports, bridges and other infrastructure, are naturally delighted with the prospect of getting China to finance them. Yet Xi Jinping realises that there is skepticism, especially in the US and European circles, about China’s intentions. Keeping this in view, Xi tried to assuage international concerns. “We reaffirm our shared commitment to build open economy, ensure free and inclusive trade, oppose all forms of protectionism including in the framework of the Belt and Road Initiative,” the communique issued at the end of the summit read. Xi, delivering the keynote address at the close of the summit, tried to reassure the world that this was not a projection of China’s power and influence.

Powerful pacts

These are the key agreements China signed with India’s neighbours:

PAKISTAN

  • MoU signed on upgrading Pakistan’s Railway mainline 1
  • MoU signed between ministries of transport of both countries for infrastructure upgrades

SRI LANKA

  • Financial agreements on port, industries and industrial parks
  • Financial cooperation agreements on port, electricity, industrial parks

BANGLADESH

  • Loan agreements signed to upgrade energy sector projects
  • Agreements to enhance investment and trade connectivity

“We are ready to share practices of development with other countries, but we have no intention to interfere in other countries’ internal affairs, export our own social system and model of development, or impose our own will on others. In pursuing the Belt and Road Initiative, we will not resort to outdated geopolitical maneuvering. What we hope to achieve is a new model of win-win cooperation.” He added that “all countries, from either Asia, Europe, Africa or the Americas, can be international cooperation partners of the Belt and Road Initiative”.

India needs to be smarter and remember that it cannot forever resist China’s innovative moves. China’s voice and ideas are heard with rapt attention across the world. India should place its concerns on the table and talk to the Chinese. “Resisting change is like burying your head in the sand,’’ said Raghavan. Policy-makers must remember this.

Sorting out contentious issues will prove much more productive in the long run. For the full potential of the Asian century to be realised, India and China have to be at peace and co-operate with each other on as many fronts as possible. Planting stories about Pakistan becoming a colony of China might provide cheap thrills, but will not benefit India.

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