China Power

China’s Vision for the Belt and Road in South Asia

What progress has the BRI made in South Asia thus far?

By Antara Ghosal Singh for
China’s Vision for the Belt and Road in South Asia

Chinese President Xi Jinping and then-Pakistani Prime Minister Nawaz Sharif inaugurate CPEC projects in April 2015.

Credit: Pakistan Prime Minister’s Offce

As China celebrates the fifth anniversary of its Belt and Road Initiative, South Asia has clearly emerged as a “priority zone” in the Chinese scheme, particularly, with the highest density of early harvest projects. Given South Asia’s strategic location at the intersection point of the China-proposed Silk Road Economic Belt and the 21st Century Maritime Silk Road, Chinese policymakers are of the opinion that having a foothold in South Asia or securing economic integration with the region is not only crucial to consolidate China’s strategic presence in the Eurasian hinterland but also to thwart any future attempt by its adversaries to confine China in the East Asia. Therefore, despite many challenges, China remains steadfast in carrying out its Belt and Road vision in South Asia.

So, what exactly is that vision?

A research report released by an authoritative think-tank in China, titled “Opportunities and Challenges for Belt and Road Initiative in South Asia” (PDF, in Chinese), deliberates upon China’s long term vision of opening up South Asia through its Belt and Road Initiative and tracks the progress made so far in that direction.

According to the report, China’s Belt and Road Initiative in South Asia includes four subprojects: the China-Pakistan Economic Corridor (CPEC), the Bangladesh-China-India-Myanmar Economic Corridor (BCIM), the Trans-Himalaya Corridor, and China’s cooperation with Bangladesh, Sri Lanka, and the Maldives under the 21st century Maritime Silk Road.

CPEC

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The $62 billion CPEC is considered the flagship project, given the speed of its progress. The signing of the memorandum of understanding between China and Pakistan in 2013 was quickly followed by the establishment Joint Cooperation Committee (JCC) and the laying out of the “1+4” cooperation structure (with the Economic Corridor at the center and Gwadar port, energy, infrastructure, and industrial cooperation as the four key areas). Now, CPEC has reportedly reached the early harvest stage, with more than 20 of the 30 early harvest projects under construction or completed. Among the milestones, Gwadar port has already been made operational, transporting Chinese merchandise to Middle East and Africa. The Gwadar East Bay Expressway and the Gwadar International Airport are under construction.

The transportation network that China is presently building under CPEC will connect Kashgar in China to Islamabad and Lahore through Karakoram Highway (Phase I and II), to Multan via the M4 line, and to Karachi through the M5 line. On the other hand, of the 16 priority proposed energy projects, accounting for 76 percent of the total investment in the corridor, most are under construction and are expected to reach completion by 2020. Meanwhile, among the 29 planned industrial parks, the Gwadar Port Free Trade Zone, for which Pakistan has handed over 30 percent of the land use right (nearly 280 hectares) to China Overseas Port Holdings Co., Ltd., for a lease term of 43 years, has already been made operational. The Haier-Ruba Industrial Park is planning expansion and more investments. On the Chinese side the provincial-level economies of Xinjiang, Sichuan, and Guangxi are gearing up to get integrated with that of Pakistan.

However, China is eager to expand the scope of CPEC beyond Pakistan, incorporating other key players of the region. The long-term Chinese vision is that of constructing a China-Pakistan-India-Iran-Afghanistan-Kazakhstan Corridor – a multination mega connectivity project that will dominate the heartland of Central and South Asia and even the Eurasian continent. Interestingly, although India is among the harshest critics of China’s CPEC, India continues to figure in China’s CPEC visions.

BCIM

Under the BCIM umbrella, China is reportedly developing three railways and three highways in southwestern Yunnan province. The China section of the China-Myanmar Railway (the Western Line of the Trans-Asian Railway) is expected to be completed and opened to traffic in 2020. Additionally, Baoshan-Tengchong-Houqiao Railway and the Dali-Qingshuihe Railway are carrying out their preliminary work. Work on the China-Myanmar Highway (including Kunming-Ruili, Kunming-Tengchong, Kunming-Qingshuihe) has also gained momentum.

The other important Chinese projects under the BCIM umbrella include the Padma Multipurpose Bridge Project in Bangladesh, the Kunming-Dhaka cargo transportation corridor, and the Bangladesh-Myanmar Railway, work on which has either been completed or is currently underway. The 2,800-kilometer-long Bangladesh-China-Myanmar Economic Corridor has been made open to traffic, except for certain sections, and two car rallies have been organized from Kolkata, India, to Kunming, Yunnan, in 2011 and 2013.

China has a bigger vision for the BCIM corridor, through which it wants to connect and integrate the economies of three geopolitical sectors of South Asia, Southeast Asia, and East Asia. However, disillusioned with the slow pace of its development so far, China has recently proposed a China-Myanmar Economic Corridor (CMEC), which will start from Yunnan province and extend to the central Myanmar city of Mandalay, and then east to Yangon and west to the proposed Kyaukpyu Special Economic Zone. The corridor may later get integrated into BCIM, but even in its present form, it can help expedite China’s trade with regions beyond Myanmar, including India, Bangladesh, and even the Middle Eastern nations via the sea route, and can also provide China with land access to the Bay of Bengal.

Trans-Himalayan Corridor

Since Nepali Prime Minister K.P. Oli’s Beijing visit in March 2016, China and Nepal have accelerated cooperation under the framework of the Belt and Road Initiative and have strengthened interconnection through trade, transportation, and telecommunications. Significant progress has been achieved in the construction of key projects like the highway bridge over Karnali River at Hilsa of Pulan/Yari port, the Kathmandu Ring Road reconstruction project, and construction of three economic corridors, namely the Koshi Economic Corridor, Gandaki Economic Corridor, and Karnali Economic Corridor, among others. Meanwhile, China and Nepal have also signed a transit agreement under which both sides have agreed to increase the number of bilateral international road freight transport lines from the existing three to 12. Furthermore, the new road and rail transportation services connecting Guangdong, Tibet, and Nepal have been officially opened and goods are being transported to and from China along this route. Both sides are also exploring the possibility of a China-Nepal Free Trade Zone.

The broader Chinese vision here is to tap the Indian economy through Nepal, as a direct land passage. As per the Chinese scheme of things, the “Trans-Himalaya Corridor” actually starts from Chengdu, Sichuan where the Sichuan-Tibet Highway, or the Sichuan-Tibet Railway, is meant to be further extended from Tibet to Kathmandu, Nepal, through Ya’an, Qamdo, Lhasa and Shigatse, and then to India where it will be connected to the Indian railway network — thus forming a large land passage between China and India across the Himalayas.

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The Chinese side is hopeful that once completed, the Trans-Himalayan Grand Passage, together with the China-Pakistan Economic Corridor and the Bangladesh-China-India-Burma Economic Corridor, will completely open up South Asia, connecting 10 countries on both sides of the Himalayas. This interconnection and intercommunication, the Chinese side believes, will release the potential of a true “Trans-Himalaya economic growth zone.”

China’s Cooperation With Bangladesh, Sri Lanka, and the Maldives Under the 21st Century Maritime Silk Road

China sees Bangladesh as an important hub of maritime as well as overland connectivity between the Indian Ocean and the landlocked provinces of southwestern China, especially Yunnan. Bangladesh’s participation in both the Silk Road Economic Belt and the 21st Century Maritime Silk Road is therefore considered crucial by the Chinese side. Since President Xi Jinping’s historic visit to Bangladesh in 2016, billions of dollars’ worth of Chinese financial assistance has flown into Bangladesh. In return, Bangladesh became one of the first South Asian nations to officially endorse China’s Belt and Road Initiative.

There have been recent reports of China implementing $10 billion worth of infrastructure projects in Bangladesh, including the Chinese Economic and Industrial Zone, Payra Power Plant, the 8th China Bangladesh Friendship Bridge, and the International Exhibition Center. Two other projects under the BRI, the Karnaphuli River Tunnel Project and the Padma Bridge Rail Link project, are presently under construction. Meanwhile, on the economic and trade front, there are talks of establishing the China-Bangladesh free trade zone, which the Chinese side argues will help reduce Bangladesh’s trade deficit of $15 billion vis-à-vis China.

Located between Dubai and Singapore and sharing deep economic and cultural linkages with India, China values Sri Lanka’s potential as an important low-cost transit point for its shipping and logistics and also from the perspective of the security of its offshore supply chain.  Among the completed BRI projects in Sri Lanka are the Norocholai Power Station, the Colombo Airport Expressway, the Colombo International Container Terminals (CICT), and the Moragahakanda Project. Meanwhile, the other two mega projects — Colombo Port City project and the Hambantota Port and Industrial Park project — which have courted much controversy and also initiated the debate on China’s “debt trap diplomacy,” are currently under construction. The Chinese side is also upbeat about accelerating the free trade negotiations and setting up of the China-Sri Lanka Coastal and Marine Joint Research and Development Center.

The Maldives, strategically located right in the middle of the Indian Ocean, with market access to almost all South Asian nations including India, Pakistan, Bangladesh, and Sri Lanka, is considered a “natural node” in China’s 21st Century Maritime Silk Road. After the September 2014 visit by Xi Jinping, China-Maldives relations have increasingly strengthened under the banner of the 21st Century Maritime Silk Road. Since then China has been actively involved in construction and upgrade work for a series of infrastructure projects in the Maldives. The largest and the most iconic of the projects, the China-Maldives Friendship Bridge, which was started in 2015, opened to traffic on August 30, 2018. Other than that, the construction of the Laamu Atoll Link Road, reconstruction and expansion of the Male International Airport, expansion of the Ibrahim Nasir International Airport, construction of Public Welfare Housing Projects in Hulhumalé etc., are all being carried out with the Chinese assistance. In December 2017, China and the Maldives signed an FTA, which eventually courted much controversy globally and had a huge impact on Maldives’ political landscape and China-Maldives relations.

Conclusion

China is well aware of the risks associated with implementation of the Belt and Road Initiative in South Asia. The challenges encountered so far are varied, including political instability and unsustainable policies by different governments; threats and attacks by violent extremist forces; geopolitical rivalries; operational risks including unsustainable debt accumulation; and constraints put by issues like environment, culture, religion, and governance. However, it is being argued that these challenges are a “normal phenomenon” in the path of China’s rise. These difficulties are equated to small “tuition fees” that China needs to pay to successfully realize the Chinese dream in South Asia.

Antara Ghosal Singh is presently working as a Research Associate at the Delhi Policy Group (DPG).  She is an alumna of Tsinghua University and Beijing Language and Culture University, China and National Central University, Taiwan. Before joining academic research, she has worked as a journalist.