Can India stalls China’s global leadership aim?

1169
Picture Credit: Twitter

The answer is to understand how biased are the pro-China rhetoric? Then you will be able to understand and see for yourself whether China really have a free-wheel in this matter!

HSBC said China’s introduction of stricter capital outflow controls has raised concerns, but there should be little impact in the long term and the Belt and Road Initiative will be a key catalyst to accelerate China’s outbound investment flows.

To explain why that is so, the bank said with the depreciating value of the Chinese currency the renminbi, which depreciated 6 per cent against the US dollar resulting in a drop in China’s foreign exchange reserves, Beijing had to impose capital control.

The dilemma now is that while the capital controls may ease depreciation pressures on the renminbi, they have also curbed the overall volume of outbound acquisitions and investments.

Then the bank says it is a targeted solution and it is a short term one.

But they forgot to mention that it also targeted the expatriation of funds by property developers – like it is the case with the Garden Country Home company with its massive billion dollars project in Johor’s Forest City.

The project, so far, is kaput unless the Arabs from the Dubai-Saudi Arabia axis buys into it.

So it is not just the One Belt One Road that is affected then.

That clearly shows China does not have the clout yet to push for the OBOR or BRI that is the Belt and Road Initiative – a project that it wants to use to gain global influence in trade and geopolitics.

Thus, we can conclude that the BRI is an attempt by China to bring in a new round of opportunities for China and that is targeting the infrastructure construction – building roads, railways, bridges and ports across the Asia region.

To be successful, this initiative cannot have opponents working against it.

Well, India is one such opponent and it is scrambling to prevent the Chinese initiative to go fully global.

For the Indians, their counter activities start in East Africa.

There, Delhi and Tokyo are planning to fund infrastructure and capacity building projects.

And it also involves Iran with Japan expected to join India into the expansion of Iran’s Chabahar port and the adjoining special economic zone.

It does not end there.

India’s own OBOR reaches out to the eastern Sri Lankan region, where together with Japan they are expected to jointly expand the strategically located Trincomalee port.

They are also likely to join hands to develop Dawei port along the Thai-Myanmar border.

And this is not discussed in Southeast Asian newspapers or forums.

Yet those promoting the Chinese OBOR that desperately cannot ignore the fact that is more reasons now to believe the Chinese initiative is not really an all-go-ahead since China itself is seeking investment from ‘stakeholders’.

HSBC itself agrees that the OBOR or BRI does not have sufficient momentum to go ahead as it depends on what China is doing with its foreign direct investment which is in turn affected by domestic policies and curbs on funds outflow!

And with India’s reluctance to join the Chinese initiative, it is a massive roadblock indeed.

Now do you see a bigger picture?

Get the latest news, opinions and commentaries. Available on Android  

16 comments

  1. The Indians just better fix their roads , trains and other basic infrastructure rather than talking too much and aspiring to do stuff beyond their capability and will. They should just provide clean water n electricity to all the villages for start. In china you can travel to the most remote regions n see great dual carriage ways and well paved roads n electric power. In India, the roads even in the capital cities are full of potholes n someone who was to paint white lines seems to have run away. In China they have Maglev n bullet trains which speed along at over 350 kph. In India on one small section they introduced their “supertrain” and it goes at 120kph n they are so proud!!. So when India said they wanted to compete with China’s One Belt one Road Project, I just flipped the page. They won’t change,, not even in 2 more generations. Talk very clever. When it comes to real action, it’s one bIg fat ZERO!

    1. Julian Teo says:

      Agreed totally. They only know how to brag! But if you understand how corrupted the country is, it’s not surprising they haven’t progressed far! 28 states became 29 states and I wonder how many states they’re going to be divided into, in the near futures if they cannot solve their internal religious, language and racial issues! Solve the hygiene issues first!

    2. Tim Irvin says:

      Plenty of smart people in India. But a reluctance to collect tax. The Chinese state is able to pay for good infrastructure because they are able i assume to collect revenue.

  2. Aaron Loy says:

    Doesn’t matter. The PRC has the resources and the ability to follow through with their plans.

    He Indians on the other hand.. let’s just say they’ve been on the global stage much longer than China, but they’ve only made bombastic promises and little progress.

  3. Kelvin Yu says:

    not an intelligent article or writer. clearly does not understand that China is a capital control nation. PRC govt itself decides which project is of national importance, before deciding on exemptions from current outward bound investment. Country Garden is a private developer pursuing a project in Malaysia. Certainly not in the same league as OBOR. for that, China’s reserves and multiple SOEs are sufficient to push through the OBOR.

  4. Han U-Yong says:

    Hahahahaha.
    Everybody knows India is jealous of China. Everyday pour cold water on Chinese achievements. Haven’t the Independent just read that Japan is now begging to join the BRI?

  5. HSBC is in no position to worry about OBOR or BRI. It should worry about its internal problems of being more an investment bank and less a commercial bank.

    I am also puzzled about the comment on the pro-China rhetorics and the anti-China rhetorics. Seems to me the pro-China rhetorics are coming from all over but the anti-China rhetorics are coming from the same traditional sources that dominated the Cold War era.

  6. PRC is a grandmaster in frauds/scams; everyone knows that fr our Suzhou Indl Pk fiasco where we got invited in & kenna backstabbed.
    OBOR is the world’s biggest scam to date; why?
    i. PRC has many inefficient SOEs that’s draining a lot of resources to keep the unemployment rate low. CCP is scared of another re-run of unemployed & disenfranchised pple taking to the streets like what happened in Tiananmen Sq. CCP needs to find biz for these SOEs… u think foreign companies will have much chance or get the better deals?
    ii. PRC has many many *ghost* cities that r built but unoccupied becoz the PRCs learned fr us… be squatter landlords; this is yet another drain on the economy just by the wasted resources in bldg & maintenance. Inefficient allocation of resources doomed Soviet Union; evidently CCP needs to find outlets for these resource allocation than *ghost* cities.
    iii. To forestall Malacca Straits blockade, PRC bet on a railway/supply line thru Central Asia. It doesn’t want to be held to ransom by either SG or US.
    iv. So is OBOR a purely commercial objective or a political/strategic consideration? Obviously, profit is not really a consideration. That bears out in how some Central Asian states have complained their JVs with PRC on some of these projects r losing $$$ & leading them into a worse debt situation.
    v. with supposed trillions in US$ in reserves, why will PRC want to let others into this lobang (if it is any good)? Obviously it want to share the pain but reap its strategic objectives. Only fools will want to put $$$ in there….. notice how the richest guys in PRC & HK (Jack Ma & Li Ka-shing) all diam-diam over this OBOR?
    This is just the economic aspect; wait until u think thru the political/geopolitics.
    OBOR is a dead-end road.

Comments are closed.