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India will not attend China's OBOR summit: Know more about the New Economic Corridor

 2017-05-13 11:38:14.0

India will not attend Chinas OBOR summit: Know more about the New Economic Corridor

Tahlka News Bureau

Beijing: China is organizing a grand two-day summit tomorrow for its One Belt, One Road – (OBOR) in order to build its network trade routes that will connect Asia, Africa, the Middle East and Europe.

A total of 65 countries are expected to attend the summit though only 29 heads of state will attend. China plans to issue a joint statement after the two day summit to showcase a worldwide approval of its ambitious project. India and Japan are unwilling to attend the summit. While Japan will send a delegation, India has refused to send any representative. The US took a U-turn at the last moment and will send a representative.

What is OBOR?

The coverage area is primarily Asia and Europe , including Oceana and East Africa. Inspired by the Silk Road, the Medieval trade routes between Europe and Asia. It will impact 4.4 billion people. China is said to be spending $1 trillion on it. It is not just one project but six major roués which will include several railway, roads, ports and other infrastructure. One Belt, One Road has been in contrast with the two US – centric trading agreements, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership.

China claims these economic corridors will not only build infrastructure in countries that cannot afford to do it themselves but also boost global trade. Most of the countries in Asia and all of India's neighbors, expect Bhutan, are willing to take part in the project.

Who can benefit more: China or other countries?

The participating countries can benefit in terms of trade and infrastructure. OBOR can be an easy and fast way for many small countries to acquire important infrastructure projects which they cannot afford otherwise. But all this will come at a huge hidden cost. China will lend money for OBOR projects to host countries at high rates of interest which the countries may not be able to repay.

This can lead to China acquiring equity and then controlling stakes in these projects, getting a permanent footprint in several small countries which is nearly impossible for it to achieve otherwise. OBOR can a way to extend Chinese influence at the expense of the US, in order to fight for regional leadership in Asia. It can also give it opportunities to use its overcapacity in steel and minerals.

The trade route will give routes to new markets. Permanent Chinese presence in dozens of countries will give China an edge over its rivals in trading with these small countries. China can even spread its manufacturing across countries as manufacturing costs such as power and wages in China are going up. If OBOR becomes a reality

Is it just about Economy and Trade?

China has always been hiding its military operations in its economic projects. A vast infrastructural footprint in dozens of countries in Asia and Africa will eventually mean a strong Chinese military presence across OBOR. A small country that hosts infrastructure created by China and unable to repay the loans can lead to loss of China's diplomatic and military moves.

Why is India not attending?

A key part of China is China- Pakistan Economic Corridor (CPEC), a 3,000km project connecting Pakistan's deep-water port Gwadar and China's Xinjiang. With the network of highways, railways and pipelines, the economic corridor is considered to China-Pakistan relation. It passes through Gilgit-Balistan region which lies in Pakistan-Occupied Kashmir. The Chinese presence in a disputed region which India claims as part of its own territory raises sovereignty concerns for India.

India have officially boycotted the OBOR summit because of the issue. However, a major security concern is CPEC giving China control of Pakistan's Gwadar port. The OBOR is boosting the Chinese presence in the Indian Ocean which will turn China's old 'string of pearls' policy to encircle India into a reality.


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