MARITIME SILK ROAD

• In 2013, both leaders of China announced this initiative in
  1.        President Xi Jinping @Shanghai Cooperation Organization (SCO) summit in Bishkek.
  2.        PM (Premier) Li Keqiang @ASEAN+China summit in Brunei.
  Objectives
  1. Connect 12 inland Chinese regions with 14 neighboring countries. (revive ancient silk road)
  2. Get new export markets
  3. Secure lanes to import raw material.
  4. Counter the influence of USA and Russia.

• 

Why New Maritime Silk Road

1: Economic reasons

• Subprime crisis => global economic crisis => Fed Tapering=> less FDI and import orders from US and EU.
• Resultà China’s “Export & FDI” driven economic model is losing its effect.
• China needs to find new export markets (those 14 neighbor countries).
• Just like we have India vs. Bharat- similarly China has “Rich Coastal areas vs poorly developed interior regions.”
• The growing disparity between Coastal China vs. Inland China = creating social problems, helping extremists and junta demanding for democracy. Hence China needs to develop those 12 inland regions (mostly located in Western Part of China).

2: Defusing tension

• Since 2011, because of South China Sea dispute, China’s relations became bitter with- Cambodia, Laos, Thailand, Malaysia, and Japan. New Silk Road policy seems to be aimed at defusing tensions- via soft language and economic offer.
• This can be seen as China’s “olive branch” to ASEAN countries.

3: Countering US+Russia

China wants to counter / balance following:

1. USA’s Pivot Policy in Asia Pacific
2. USA’s proposed Trans-Pacific Partnership (TPP)
3. U.S. support for democratic transition in Myanmar
4. USA’s security cooperation with Singapore, the Philippines, Indonesia, Malaysia, Thailand and Brunei.
5. Russia’s proposed “Customs Union” (now Crimea will give’ them access Black sea and Suez Canal.)

4: Strategic supply lines

• Strait of Malacca= pirate infested waters but >80% of imports to China come from this route. China wants to secure this lane.
• China wants to gain access to Bengal Bay and Indian Ocean = Need better relations with Myanmar and ASEAN.

To summarise MSR is:-

1. Develop port cities along the silk route

1. above the wind region: Indian Ocean
2. Below the wind region: Malacca, South China Sea, Java Sea and Far East.

• Via these port cities, link Asia and Africa with Chinese hinterland.

How to implement Maritime Silk Road? (2+7)

This will be implemented via 2+7 cooperation framework.

“2” = consensus on two issues

1: Strategic relation

1. Strategic relations with “good” neighbors.         
2. Signed strategic partnership agreements with Kyrgyzstan and Turkmenistan.

2: Economic cooperation

• With chillar countries in Central Asia, China signed preferential trade agreements, gave them cheap loans.
• Heavy investments via Chinese PSUs. Mainly in energy (oil-gas pipelines) and transport (railway, highway and ports).
• Joint infrastructure projects (rail-road-ports)
• Even proposed Asian Infrastructural Investment Bank. Its offices will be setup in the capital cities of various Maritime silk road countries.

 “7” proposals

1. sign China-ASEAN good neighbor treaty
2. get maximum benefit from China ASEAN FTA
3. Conclude RCEP by 2015. China led Regional Comprehensive Economic Partnership (RCEP)= the FTA between ASEAN and China, Japan, South Korea, India, Australia and New Zealand); eliminate trade barriers.
4. Regional financial cooperation (to prevent subprime/ BoP crisis) – recall that China gave maximum funding to BRICS Bank’s emergency fund against Fed Tapering.
5. Maritime cooperation- Already working on Gwadar (Pak), Hambantota (SriLanka) and Chittagong (Bangladesh). Proposal for Bangladesh-China-India-Myanmar (BCIM) corridor
6. security cooperation
7. People to people contact for culture, science and environment.

India’s stand on Maritime Silk Road?

Presently, India has two opposite options:

1. Work together with China, Let them gain presence in Indian ocean and reap the collateral economic benefits from this project.
2. Don’t work with China, and prevent Chinese influence in Indian Ocean.

The Next government will take the final decision.

New updates

1. Xi invited India, Sri Lanka and Maldives to join Maritime Silk road (MSR) initiative
2. But Modi remained non-committal, saying it requires mutual trust, stability, respect, free flow of commerce and ideas.
3. India WANT is concern about the Chinese prescence in the Indian ocean, and string of pearl strategy.
4. In other words, if China opens up its economy to indian goods and services, helps reducing India’s trade deficit, maintains peace @border region, then we’ll consider joining M.S.R.

PROJECT MAUSAM(ANTI STRING OF PEARL STRATEGY

•  The project is considered the Modi government’s  foreign policy initiative designed to counter China.
•  It is inspired by India’s historical role as the focal point for trade in the Indian Ocean.
• In pre-modern times, sailors used season winds i.e winds in monsoon and wind in summer.
• This allowed for significant cultural exchanges as diverse people from different places would often spend months at a time living in foreign countries .
•  Project Mausam would allow
  •      India Reestablish its ties with its ancient trade partners and re-establish
  •  have both a cultural and serious strategic dimension. Perhap
  •  developing its Andaman and Nicobar Islands as a security and trade zone , given the islands’ location close to the strategically important Straits of Malacca and Thailand. However, India has yet to reveal actual details on the policies and projects that it intends to pursue to advance Project Mausam.