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Does China’s new “Silk Road” matter for India?

By 玄史生 (Own work) [CC BY-SA 3.0 (], via Wikimedia Commons

China’s deep sea ports in Myanmar, Sri Lanka and Gwadar in Pakistan have been considered by international strategists as expression of China’s desire to protect its international trade routes through the Indian Ocean. Among Indian strategists those ports are seen as elements of scaring “strings of pearls” encircling India. Eminent Indian Government Officials, however, deny the existence of such Chinese threats to Indian strategic interests. Nevertheless, India has sought a new partnership with Iran and concluded an agreement to develop the port of Chabahar in Iran’s South-East, in order to build its own trade route through Iran to Central Asia and thus bypassing Pakistan. The symmetric counterbalance to China’s regional strategy is obvious. But now, China has come up with its “Belt and Road Initiative”, the BRI, with which it launches the future design of the age-old “Silk Road” linking the East to the West by land and sea.  In addition, China has registered a major diplomatic success by adding to its BRI the Asian Infrastructure Investment Bank (AIIB), which had after its inauguration in Beijing in January last year, a resounding starting impact. The AIIB is aiming at funding Asian infrastructure projects and has already committed funds to major projects notably along the trade routes and corridors defined by Chinese trade interests. The AIIB, established in Beijing, secured solid global recognition by the fact that it chose the US dollar as the institution’s currency and English as the bank’s business language. Born out of a Chinese initiative, chaired by a Chinese, associating itself with the World Bank, the Asian Development Bank and all other major development banks and having been invited to the World Bank’s Global Infrastructure Forum 2016 held in Washington D.C., the AIIB is now involved in a global setting which determines the world’s investment priorities for the improvement of transport infrastructure everywhere in order to make trade more cost-effective. This is China’s path to world relevance: from the largest population to the second-largest economy to a major stake in global investment banking. This position will soon positively impact China’s trade with the world and its overall position in world economy and will take China to strategic heights where it will, in a bipolar world order, share global dominance together with the USA.  This may well be achieved within one generation and, remarkably, without very large and wide open access to the seas and without naval forces typically associated with world rule over the last half millennium, when one thinks of Portuguese, Spanish, British and American colonial and imperial domination over major parts of the world. What hits the eye is China’s irresistible capacity to unequivocally determine its national long-term strategic interests, define adequate strategies to protect those interests and its political determination to implement those strategies. European democracies used to see the cause of their temporary world dominance in their democratic societies, the rule of law and free media, in short in liberal societies. China is and has nothing of it, whereas India, population-wise comparable to China, claims to be the world’s largest democracy and to have a legal order governed, in principle, by the rule of law, and definitely enjoys free media. But where does India find itself in its competition with China for strategic influence on at least regional affairs, if not world affairs, with the purpose of protecting and promoting its legitimate political and economic interests? We have, in these columns, repeatedly acknowledged that Prime Modi in his first moves in foreign affairs showed a rational understanding of what strategic interests are and how to promote them. This has not changed, but it is obvious that India, with all its potential and its legitimacy, does not seem to understand how to pursue its interests efficiently and effectively. Substantially improved growth rates of late seem not to be sufficient to catch up with India’s perennial competitor China. It takes much more fundamental and determined social and economic reforms than what the current man at the helm of this great nation has been able to implement. Liberal societies in Europe may know, in theory, what is required in order that India genuinely takes off, but are at a loss when it comes to the question of how to set reforms going. Europeans, who have lost their global dominance, feel uneasy with the current leadership of the remaining world power of European descent and would cherish a new world order governed by regional powers each with legitimate claims to influence on others, but are left with hopes. In the meantime, the “Silk Road” of modern times is materialising under Chinese guidance without democratic checks and balances and guarantees of the rule of law, but nevertheless with beneficial impact on material needs of developing societies in Asia and beyond.

7th July 2017 / Philippe Welti

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