The View From Asia

China's Belt and Road project under scrutiny

Policy observers keenly watch China's One Belt One Road initiative to assess the benefits and implications of this programme for their people

New economic lifeline for Hong Kong

Lawrence Ma

China Daily, Hong Kong

The Belt and Road (B&R) Initiative is said to be a policy from the very top of the central leadership; it is comparable with the opening-up policy initiated by Deng Xiaoping in 1978.

Within 30 years, the opening-up policy has helped transform China from a poor, underdeveloped country into the world's second-largest economy.

From 1978 onwards, after getting rid of the historical baggage of the "cultural revolution", China opened up to foreign investments.

Waves of entrepreneurs came and built factories in various coastal cities, employing millions and exporting "Made in China" goods to markets worldwide.

Hong Kong's role as the gateway to the Chinese mainland for the world has significantly diminished since the implementation of the opening-up policy as foreign investors can now deal directly with the mainland.

Meanwhile, Hong Kong's stock exchange is no longer the favourite platform for mainland companies to go public as many of their top executives were educated overseas and have a better understanding of foreign systems than their predecessors, and they can get their companies listed in New York or Luxembourg.

Hong Kong undoubtedly has been marginalised along with the mainland's rapid development.

The Hong Kong Stock Exchange is no longer the favourite platform for mainland companies to go public as many of their top executives were educated abroad, giving them a better understanding of foreign systems, and they can get their companies listed in New York or Luxembourg. PHOTO: BLOOMBERG

But the city has three advantages - an impartial and trusted legal system, an efficient financial market and numerous skilful legal and financial professionals.

Central Asian countries certainly will have more confidence in an independent legal institution to handle project disputes that they may have with China.

The Asian Infrastructure Investment Bank and the investors of any infrastructure project can make use of Hong Kong's securities market to raise funds by issuing debenture; they can also list their companies on the Hong Kong Stock Exchange as an exit strategy to cash in investments.

The B&R could be the new lifeline for Hong Kong's economy in the next 30 years if the city aptly positions itself and spares no effort in participating in this initiative.

Silk Road projects can strengthen Sino-Indian ties

Salman Haider

The Statesman, India

The sporadic discord and skirmishes notwithstanding, Sino-Indian ties still move on an even keel of cooperation and engagement. The Silk Road project - linking China to all the major business and cultural hubs across Asia - might enhance the scope of the friendship.

There is no letup in China's effort to give body and substance to its initiative of reviving the fabled Silk Road. In its earliest form, this was a caravan route across the heart of Asia to carry Chinese products, silk above all - hence the name - to markets in Europe where they were greatly prized. 

It was no single thoroughfare comparable to the highways of today, comprising a number of tributary routes that linked numerous manufacturing and trading centres along the main path of the traffic.

India was an important part of this overland trading structure, both as manufacturer and as consumer of traded goods. 

It is noteworthy that even before the Silk Road initiative was given any kind of currency, or the One Belt One Road (OBOR) project as it is more commonly called today, China worked assiduously to remove the endemic jurisdictional and territorial issues that had complicated its relations in the region to its west, and that having been substantially achieved, it was in a position to move on to initiatives on a continental scale like the present one.

Having enunciated the OBOR concept, China has tried to give practical shape by encouraging several road and rail projects that establish new links between the Asian heartland and its Eurasian periphery. 

The OBOR programme contains many elements of interest to India.

The original Silk Road had developed connections between India and far-flung regions in Central Asia, so some measure of revival has considerable relevance for India. 

More immediately relevant to the Indian connection is the maritime component mentioned above, which complements the overland link: this, too, picks up threads from a much earlier past and revives old connections.

With the enlarging of maritime traffic in the Indian Ocean area, the comfortable semi-isolation that has served India well has become less marked; a number of new players are in the field - China prominent among them - and there are fresh challenges for India to handle.  

In this changing world of Asia, where vast new developments have cropped up in rapid succession, India is well in the forefront and has become an important participant in the processes of change. This has become especially marked now that the Indian economy is robust and other major economies are faltering. 

Beyond Asia, India's more active quest for a global role is to be seen in its effort to be included in the Nuclear Suppliers Group (NSG), where its lobbying for international support was led by the Prime Minister himself. India has been bold enough to make its bid even though circumstances do not appear entirely favourable. 

In the Asian region, India has promoted more than one initiative for joint action, like the "Mausam Project" that looks at cultural and economic links among countries of the monsoon belt.

This could be a rich field of shared activity and scholarly exchange all along the Indian Ocean littoral, and some useful seminars and meetings have been held on this theme under Indian sponsorship. However, momentum on this project seems to have been lost and there is not much present sign of activity.

In New Delhi, nobody seems to "own" the project and the effort and resources it attracts are far from adequate for the task, and cannot be compared with the drive and energy brought to pan-Asian initiatives elsewhere, especially in China.

The variety of concepts about Asia's future indicate that contending ideas and interests are at play. Not all of these concepts are Asian of provenance, and the US "pivot" to Asia shows how other powerful players have been drawn into contention in the region.

However, even if from time to time regional entities can be in confrontation, as has been witnessed in the South China Sea, their differences have hitherto been largely contained and solutions found from within the region itself.

The prevailing spirit is still that of cooperation and economic development. That is why India has been able to reach out to China for support in its effort to gain admittance to the NSG, and that, too, despite the fact that China's close ally Pakistan stands in the way with its claim for admission at the same time.

The outcome cannot be predicted but the show of friendship with China and India's outreach to that country may have a useful effect.

Indonesia should boost maritime role

CPF Luhulima

The Jakarta Post, Indonesia

The maritime silk road marks a strategic shift in China's foreign policy, prioritising its relationship with countries in its immediate neighbourhood.

China is keen to contribute to the construction of maritime infrastructure in South-east Asia, particularly in Indonesia's waters, as it "will help boost production capacity in its iron, steel, aluminium and cement industries for export purposes", as the scholar Zhao Hong writes.

Infrastructure, particularly Indonesia's, is a significant opportunity for Chinese firms. As such, it has crucial implications for Indonesia and, by extension, for other Asean members.

Although China reassures its South-east Asian neighbours that its maritime silk road essentially serves peaceful intentions, there is no absolute guarantee.

The deep-rooted apprehension among South-east Asians that China's lofty plans will go beyond maritime connectivity and infrastructure building, as well as trade, was manifest in recent Chinese naval fleet manoeuvres. 

They were meant to effectively raise naval task force standards for actual combat training, which started last month, sailing from Sanya on Hainan Island through the South China Sea, the Sunda Straits, the Lombok Straits, the Makassar Strait and the Bashi Channel - an important passage for military operations - and back to China.

The People's Liberation Army's naval exercise was, according to a May 6 post on a Chinese military website, "a necessary means to properly exert the rights endowed by international laws on warships to protect China's maritime rights and interests and maintain the international maritime order".

It is the argument of the "rights to protect Chinese maritime rights and interests and maintain international order" that agonises South-east Asia.

The unannounced Chinese naval exercise through Indonesian waters indicates that Indonesia has not yet familiarised itself with the actual embodiment of China's maritime silk road.

Indonesia should take a firm stance on the issue. It should shore up its maritime defence system with state-of-the-art technologies to secure its sea lanes, bolster its monitoring capability in its own waters, regulate and supervise traffic flows in its territorial waters and uphold the "international maritime order", bridging the Indian and Pacific Oceans.

It should establish itself as the global maritime fulcrum between these two oceans. 

  • The View From Asia is a weekly compilation of articles from The Straits Times' media partner Asia News Network, a grouping of 21 newspapers.
A version of this article appeared in the print edition of The Straits Times on June 25, 2016, with the headline 'China's Belt and Road project under scrutiny'. Print Edition | Subscribe