China's motives clearly economic

21 Sep, 2016

Pakistan's exports are plummeting not only because demand for our raw commodities and low-value added products in the rich markets has collapsed but also because we lack enough exportable surpluses in products that are in demand globally and/or regionally. In fact, we don't make such items at all. And minus China, we have next to negligible trade relations with regional countries. Our border trade with our immediate neighbours - India, Afghanistan and Iran - has been held hostage since the very day Pakistan came into being to our self-destructive geostrategic compulsions. So much so, that we have actually cut the nose to spite the face as we have virtually bottled up the country shutting down our trade-outlets in the East, in the West and North-West while the Northern outlet is too far away and awaiting the CPEC to become tradable and in the South we have a small little sea outlet, not enough for even our own limited export and import activity. Meanwhile, the deepening and widening Indo-American honeymoon is being viewed world-wide and particularly in Pakistan with the Cold War lens.
Conclusions reached, therefore, naturally see this growing alliance between the two big 'democracies' of the world as a grouping of 'good guys' being put together to contain the emergence of vast regions under Chinese influence or what the Western media would like the world to believe, the rise of a grouping of 'bad guys'. In this so-called new tussle between the 'good guys' and the 'bad guys' for carving out areas of influence many of those wearing the Cold War lenses see the signs of a grand global conflict on the lines similar to those during the Cold War days between the so-called 'free-world' led by capitalist US on the one hand and the so-called 'captive world' led by the communist Soviet Union on the other.
However, as opposed to the Cold War which was essentially an ideological tussle between the two superpowers influenced entirely by geopolitics, the competition that is emerging between the present 'good guys' and 'bad guys' is not at all ideological and is entirely influenced by geo-economics and not geopolitics. And when geo-economics is the dominant subject or the primary issue between states, the two bilaterally or group-wise tend not to harm or undermine the markets in the rival grouping but bend backwards to help sustain them because that ensures continued and escalating incomes from trading which in turn ensures prosperity of trading partners. China's 'One Belt, One Road' project has emerged as the signature foreign policy initiative of the Xi Jinping administration.
It envisions a vast, Chinese-built transportation network spanning inland Eurasia and coasts of the Indian Ocean. The 'Silk Road Economic Belt' comprises railways, roads and logistics facilities that connect China to Europe via Central Asia, with branches extending to Pakistan, Iran and the Caucasus. The '21st Century Maritime Silk Road' is a series of ports around the Indian Ocean Rim.
China's motives are clearly economic: developing its impoverished western regions, generating new overseas demand to support domestic industries struggling with overcapacity, and ultimately boosting exports by cutting freight costs. Unveiled in 2013 the B&R, with a potential to stimulate an investment of as much as $4 trillion, comprises two main parts: a series of land-based economic corridors that China refers to collectively as the Silk Road Economic Belt, and the Twenty-First-Century Maritime Silk Road, which will traverse the South China Sea, the Indian Ocean, and the Mediterranean Sea. The first of the Silk Road Economic Belt's corridors will connect north-eastern China to mineral-rich Mongolia and Siberia by means of a modernised rail network. The second, the China-Pakistan Economic Corridor, will link China's western region of Xinjiang to the Pakistani deep-water port of Gwadar on the Arabian Sea. Beijing will open up China's south-western provinces to the Indian Ocean by investing in rail, highways, ports, pipelines, and canals in India, Bangladesh, and Myanmar.
To the south, China is developing what it has termed the China-Indochina Peninsula Economic Corridor, connecting Southeast Asia's 600 million inhabitants to China's economy through investments in ports and high-speed rail. Beijing also aims to complete two major rail projects: one will likely link Henan Province, Sichuan Province, and the Xinjiang region to hubs in Poland, Germany, and the Netherlands by way of Central Asia, Iran, and Turkey; the other, the New Eurasian Land Bridge, will connect China to Europe by way of Russia. Finally, Beijing is developing a corridor that will connect ports in Djibouti, Kenya, Tanzania, and Mozambique to the Red Sea, the eastern Mediterranean, and central and south-eastern Europe.
So far the United States has either fruitlessly attempted to undermine the initiative or avoided engaging with it altogether. That is the wrong course, cautions Gal Luft - Co-Director of the Institute for the Analysis of Global Security and a Senior Adviser to the United States Energy Security Council - in his latest Essay (China's Infrastructure Play - Why Washington Should Accept the New Silk Road) in the Sept/October 2016 issue of Foreign Affairs.
He asks Washington instead to cautiously back the many aspects of the B&R that advance the US interests and oppose those that don't. He says the United States does not have to choose between securing its global position and supporting economic growth in Asia: selectively backing the B&R would help achieve both goals.
"Most important, China has retooled its foreign policy in service of the Belt and Road Initiative. To encourage their support for the B&R, Beijing welcomed India and Pakistan into the Shanghai Cooperation Organisation, a regional bloc; it is likely pushing for Iran to join, too. In Europe, China has upgraded its relations with the Czech Republic, turning Prague into the hub of its ventures on the continent. During a state visit in March, Chinese President Xi Jinping finalised business and investment deals worth some $4 billion with the Czechs. Driven by the belief that the B&R's success depends on stability in the Middle East, meanwhile, China has recently taken an activist approach in the region that contrasts starkly with its historical reluctance to get involved there. In January, Xi became the first foreign leader to visit Iran after the lifting of international sanctions on that country; on the same trip, he met with the leaders of Egypt and Saudi Arabia. China has also attempted to mediate between the rival factions in Syria's civil war; and, in December 2015, passed a law that will allow the People's Liberation Army to participate in counterterrorism missions abroad."
Luft believes that the passive-aggressive approach of the US to B&R was misguided: it allows China to shape Eurasia's economic and political future without the US input; it denies American investors opportunities to profit from major infrastructure projects; and, insofar as it seeks to weaken the initiative, it could stifle a source of much-needed growth for Asia's developing economies and Europe's stagnating ones. As the failed US attempt to prevent its allies from joining the AIIB shows, resisting China's regional economic initiatives puts Washington in an uncomfortable position with some of its closest partners, many of which see the B&R as a useful tool for pulling the global economy out of the doldrums.
"Instead, Washington should approach the B&R with an open mind. The US officials should publicly acknowledge China's initiative and the potential benefits it offers, provided that Beijing leads the effort transparently and ensures that it works largely in the service of international development rather than China's own gain. The two countries should then find a bilateral forum-the Strategic and Economic Dialogue is just one option-in which to discuss a joint economic development agenda and come up with a role for the United States that plays to its strengths. American defence contractors, for example, could provide physical security and cyber-security services to B&R projects, and the US military could help secure some of the more volatile regions where Washington already has military assets, such as the Horn of Africa. That would spare China the need to increase its overseas military presence and bolster the legitimacy of the US forces working in those areas."
So, most likely rather than turning into a Cold War type of confrontation between the two groups of nations, one led by the US and the other by China, the B&R initiative would perhaps lead to global cooperation with all nations notwithstanding their respective bilateral or multilateral conflicts joining hands for the greater good of all and hopefully for inclusive global prosperity.

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