Source:
http://www.maritimeindia.org/CommentryView.aspx?NMFCID=8390
INDIA’S APPROACH TO CHINA’S MARITIME SILK ROAD
AN ALTERNATIVE VIEW
Author : Gurpreet S Khurana
17 Feb 2015
In his December 2014 pre-election manifesto, Sri Lanka’s President Sirisena had expressed his intent to reconsider the US$1.4 billion Chinese-funded project to develop Colombo port. However, the visit of Chinese ‘special envoy’ (Liu Jianchao) to Sri Lanka in early-February 2015 led to a “careful assessment” of the issue, following which, the Sri Lankan government has indicated that it is likely to go ahead with the project.
The Colombo port project has been essential for the ‘Maritime Silk Road’ (MSR) initiative of the Chinese President Xi Jinping. But this success for China may be only the first step in the implementation of MSR, with more to follow. Many other countries in India’s maritime neighbourhood – Bangladesh, Indonesia, Kenya, Maldives, Pakistan, Thailand et al – are on the MSR bandwagon. In the context of this trend, this essay examines India’s approach to the MSR concept, and presents an alternative to the prevailing mainstream view in New Delhi.
Invoking the ‘ancient’ Chinese contribution to Asian seaborne trade and cultural linkages, the MSR concept essentially involves China helping its partner countries to develop their port infrastructure to enhance trade connectivity, and to establish manufacturing and free-trade zones in the hinterland, with attendant economic incentives. The MSR initiative is thus proposed as an economic concept. However, even as its specific details are yet unclear, its multi-dimensional strategic intent and wide-ranging ramifications cannot be ignored. India’s response to MSR has been guarded; and understandably so, owing to the adversarial potential of its relations with China.
While India has not yet rejected China’s MSR proposal, a preliminary assessment – outlined in the succeeding text – indicates that there may be a case for New Delhi to consider the MSR more objectively.
It is important to note that in the present times of national technical means and stand-off non-kinetic offensive weapons, national security cannot be achieved through physical barriers, including denying Chinese companies / entrepreneurs’ access to Indian production and distribution hubs.
Understandably, India has been cautious with regard to its critical logistic infrastructure including ports and port-connectors, which it calls ‘strategic sectors’. However, the strategic value of a facility depends upon the context. A ‘generic’ designation of sea-ports as ‘strategic’ may not be appropriate. Hence, a selected site on Indian coast allocated to a Chinese company for port construction need not be designated as strategic.
Though the MSR is Beijing’s initiative, its historic roots are not exclusively Chinese.
http://www.maritimeindia.org/CommentryView.aspx?NMFCID=8390
INDIA’S APPROACH TO CHINA’S MARITIME SILK ROAD
AN ALTERNATIVE VIEW
Author : Gurpreet S Khurana
17 Feb 2015
In his December 2014 pre-election manifesto, Sri Lanka’s President Sirisena had expressed his intent to reconsider the US$1.4 billion Chinese-funded project to develop Colombo port. However, the visit of Chinese ‘special envoy’ (Liu Jianchao) to Sri Lanka in early-February 2015 led to a “careful assessment” of the issue, following which, the Sri Lankan government has indicated that it is likely to go ahead with the project.
The Colombo port project has been essential for the ‘Maritime Silk Road’ (MSR) initiative of the Chinese President Xi Jinping. But this success for China may be only the first step in the implementation of MSR, with more to follow. Many other countries in India’s maritime neighbourhood – Bangladesh, Indonesia, Kenya, Maldives, Pakistan, Thailand et al – are on the MSR bandwagon. In the context of this trend, this essay examines India’s approach to the MSR concept, and presents an alternative to the prevailing mainstream view in New Delhi.
Invoking the ‘ancient’ Chinese contribution to Asian seaborne trade and cultural linkages, the MSR concept essentially involves China helping its partner countries to develop their port infrastructure to enhance trade connectivity, and to establish manufacturing and free-trade zones in the hinterland, with attendant economic incentives. The MSR initiative is thus proposed as an economic concept. However, even as its specific details are yet unclear, its multi-dimensional strategic intent and wide-ranging ramifications cannot be ignored. India’s response to MSR has been guarded; and understandably so, owing to the adversarial potential of its relations with China.
While India has not yet rejected China’s MSR proposal, a preliminary assessment – outlined in the succeeding text – indicates that there may be a case for New Delhi to consider the MSR more objectively.
The assessment needs to factor both economic and security considerations.
Economics
As the largest manufacturing economy in the world, China’s impressive economic growth in the past few decades has led to rising incomes and better lifestyles, but also slowing down of its exports due to rising production costs. China seeks to address this conundrum by outsourcing manufacturing to its MSR partners. For India – given its advantages in terms of the relatively low cost of labour and raw-material – this presents an opportunity to strengthen its manufacturing base, propagate its ‘Make in India’ campaign, and generate employment opportunities. The prevailing cynicism against shifting China’s ‘sunset industries’ to India purely on environmental considerations may be akin to ‘throwing the baby out with the bathwater’. Considering that China’s industrial capacity is at least two decades ahead, Indian industries could leapfrog in the same way that the Southeast Asian economies did in the 1980s on the back of ‘outsourcing’ by Japanese multinational companies. Commonly referred to as the ‘Flying Geese Paradigm’, the sound logic for such ‘outsourcing’ was based on comparative advantage and market rationalism.
On the other hand, if New Delhi opts to stay out of the MSR, India’s industrial growth will lag behind its Asian neighbours – most of which are China’s avowed MSR partners – thereby adversely affecting India’s economic growth and developmental plans.
India also needs to overcome infrastructure-related constraints to enhance connectivity for its overseas trade, which contributes substantially to the national economy. Notably, in 1990–91, India’s external trade accounted for a mere six per cent of the GDP, which rose to 52 per cent by 2010–11. The MSR could be an effective maritime supplement to the land-based Bangladesh-China-India-Myanmar (BCIM) Economic Corridor under active consideration by New Delhi. It could be dovetailed with India’s own ‘Sagarmala’ project, and thereby contribute to the nation’s efforts to enhance sea-trade connectivity, while also progressively leading to ‘port-led development’ of the hinterland, and the SEZs. The MSR may also help India to develop its ‘blue economy’ through bolstering its marine industries and ship-building capacity.
Security
China’s military-strategic intent behind the MSR cannot be discounted. The unprecedented docking of a PLA Navy submarine at Colombo port in September 2014 is a bellwether for future developments in the Indian Ocean. China is likely to seek naval access to the maritime infrastructure that it is helping to create, thereby increasing its strategic presence in India’s primary areas of maritime interest. The PLA Navy could seek replenishment facilities in Chittagong, Colombo, Gwadar, Hambantota, and so on.
Economics
As the largest manufacturing economy in the world, China’s impressive economic growth in the past few decades has led to rising incomes and better lifestyles, but also slowing down of its exports due to rising production costs. China seeks to address this conundrum by outsourcing manufacturing to its MSR partners. For India – given its advantages in terms of the relatively low cost of labour and raw-material – this presents an opportunity to strengthen its manufacturing base, propagate its ‘Make in India’ campaign, and generate employment opportunities. The prevailing cynicism against shifting China’s ‘sunset industries’ to India purely on environmental considerations may be akin to ‘throwing the baby out with the bathwater’. Considering that China’s industrial capacity is at least two decades ahead, Indian industries could leapfrog in the same way that the Southeast Asian economies did in the 1980s on the back of ‘outsourcing’ by Japanese multinational companies. Commonly referred to as the ‘Flying Geese Paradigm’, the sound logic for such ‘outsourcing’ was based on comparative advantage and market rationalism.
On the other hand, if New Delhi opts to stay out of the MSR, India’s industrial growth will lag behind its Asian neighbours – most of which are China’s avowed MSR partners – thereby adversely affecting India’s economic growth and developmental plans.
India also needs to overcome infrastructure-related constraints to enhance connectivity for its overseas trade, which contributes substantially to the national economy. Notably, in 1990–91, India’s external trade accounted for a mere six per cent of the GDP, which rose to 52 per cent by 2010–11. The MSR could be an effective maritime supplement to the land-based Bangladesh-China-India-Myanmar (BCIM) Economic Corridor under active consideration by New Delhi. It could be dovetailed with India’s own ‘Sagarmala’ project, and thereby contribute to the nation’s efforts to enhance sea-trade connectivity, while also progressively leading to ‘port-led development’ of the hinterland, and the SEZs. The MSR may also help India to develop its ‘blue economy’ through bolstering its marine industries and ship-building capacity.
Security
China’s military-strategic intent behind the MSR cannot be discounted. The unprecedented docking of a PLA Navy submarine at Colombo port in September 2014 is a bellwether for future developments in the Indian Ocean. China is likely to seek naval access to the maritime infrastructure that it is helping to create, thereby increasing its strategic presence in India’s primary areas of maritime interest. The PLA Navy could seek replenishment facilities in Chittagong, Colombo, Gwadar, Hambantota, and so on.
The question arises: what can India do to prevent this?
India could possibly try to use its leverages with the IOR countries; but these are hardly adequate vis-á-vis the economic attractiveness of China’s MSR. Notably, even Bangladesh and Maldives have opted to support the MSR, and with Pakistan, India has no leverage at all. Hence, the progress of the ongoing developments seems inevitable, over which, New Delhi seems to have little control.
On the other hand, permitting a Chinese company to develop an economic zone – comprising a port-hinterland complex with manufacturing hubs – in an appropriate location in India would entail considerable Chinese investment in terms of finances, technology and possibly, skilled human resource. This would lead to China developing major stakes in India, which would contribute to the latter’s national security through ‘dissuasion’.
On the other hand, permitting a Chinese company to develop an economic zone – comprising a port-hinterland complex with manufacturing hubs – in an appropriate location in India would entail considerable Chinese investment in terms of finances, technology and possibly, skilled human resource. This would lead to China developing major stakes in India, which would contribute to the latter’s national security through ‘dissuasion’.
It is important to note that in the present times of national technical means and stand-off non-kinetic offensive weapons, national security cannot be achieved through physical barriers, including denying Chinese companies / entrepreneurs’ access to Indian production and distribution hubs.
Understandably, India has been cautious with regard to its critical logistic infrastructure including ports and port-connectors, which it calls ‘strategic sectors’. However, the strategic value of a facility depends upon the context. A ‘generic’ designation of sea-ports as ‘strategic’ may not be appropriate. Hence, a selected site on Indian coast allocated to a Chinese company for port construction need not be designated as strategic.
An apt parallel is New Delhi’s ‘active consideration’ to connect the (otherwise ‘strategic’) road infrastructure in India’s north-eastern states to the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC).
Though the MSR is Beijing’s initiative, its historic roots are not exclusively Chinese.
MSR represents the ancient maritime inter-linkages within Asia, which closely followed the regularly-reversing Monsoon winds, thereby enabling sea-borne commercial and cultural exchanges across Asia.
India’s support to the MSR concept would, therefore, serve to propagate Asia’s ‘rise’ and integrate Asia economically. In the process, it would create mutual dependence, and thereby contribute to regional stability and prosperity.
On the contrary, with the regional countries supporting MSR on the back of growing regional economic integration, India’s exclusivist approach would lead to its marginalisation, thereby helping China to ‘displace’ India’s influence in its own backyard.
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(*Captain Gurpreet S Khurana, PhD, Indian Navy is the Executive Director, National Maritime Foundation (NMF), New Delhi. He can be reached at gurpreet.bulbul@gmail.com)
On the contrary, with the regional countries supporting MSR on the back of growing regional economic integration, India’s exclusivist approach would lead to its marginalisation, thereby helping China to ‘displace’ India’s influence in its own backyard.
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(*Captain Gurpreet S Khurana, PhD, Indian Navy is the Executive Director, National Maritime Foundation (NMF), New Delhi. He can be reached at gurpreet.bulbul@gmail.com)
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