How G7 counter to China’s Belt and Road Initiative will benefit India
New G7 Build Back Better World program to counter Chinese Belt and Road Initiative
- The seven richest economies in the world, known as G7 plan to counter China’s economic power around the world.
- They agreed to offer developing nations support to build basic buildings, roads, power supplies that are needed for the operation of a society or enterprise which will rival China’s multi-billion-dollar Belt and Road Initiative or Belt and Road Initiative (BRI).
- The plan is being led by United States president Joe Biden. Named the Build Back Better World (B3W) initiative, world leaders at the G7 summit hope to invest $40 trillion to provide a simple infrastructure partnership alternate to Chinese BRI.
- China’s BRI scheme was launched in 2013 by president Xi Jinping and involves development through spending in base projects all over Asia to Europe and ahead.
- More than 100 countries have agreements with China to join the Belt and Road (BRI) projects like railways, ports, highways, and other infrastructure. As an alternative, the G7 proposed the Build Back Better World (B3W) drive.
- The White House said that the United States will work with the US Congress to supplement existing development loans and “collectively catalyze hundreds of billions of dollars of infrastructure investment”. India has welcomed the G7 countries’ latest plan.
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- In March 2014, Russia was indefinitely suspended following the capture of Crimea, reducing G8 to G7. The G7 now comprises the US, UK, France, Germany, Italy, Canada, and Japan.
- PM Modi was invited by the French president in 2019 as a goodwill partner and he participated in the sessions on ‘Climate, Biodiversity and Oceans’ and ‘Digital Transformation’.
- This year the UK currently holds the presidency and invited India, Australia, South Korea, and South Africa, as guest countries for the Summit. Attendance was through physical and virtual participation.
- In May of last year, ex-US President Donald Trump had invited India. Back then he called the G7 a “very outdated group” and added that he would prefer to include India, Australia, South Korea, and Russia in the group of the largest advanced economies.
- Trump wanted the new group to be called “G10 or G11”, and proposed a meeting in September or November 2020. The coronavirus and the US election outcome canceled those plans.
- This year, after the UK’s invitation, Prime Minister Modi was expected to travel to the UK but canceled the visit due to the pandemic situation in India.
How the G7 plans to do it
- The theme is ‘Build Back Better’, and the UK has mentioned four key areas for improvement: leading the global recovery from coronavirus while strengthening resistance against future pandemics; promoting future prosperity through free and fair trade; tackling climate change, and preserving the planet.
- The B3W plan discussed by the G7 nations that include the US, Britain, Canada, France, Germany, Japan, and Italy calls for spending hundreds of billions of dollars in collaboration with the private sector keeping climate change and labor practices in mind.
- Biden had earlier spoken to leaders of the ” Quad” (Australia, India, Japan, and the US). He wanted to increase vaccine production and wanted to know their opinions on Beijing.
- Ahead of G7, Biden announced that the US would unconditionally donate 500 crore Pfizer-BioNTech doses.” One billion doses of Covid vaccines to poor and middle-income countries are planned as part of a campaign to “vaccinate the world” by the end of 2022.
- It’s designed to compete with president Xi’s BRI, which has created massive debt and exposed many countries to unfair influence by Beijing. This has led to many countries being deeply indebted to the Chinese government
- Exactly how the new plan will work or how much capital it would ultimately allocate is not known.
- The leaders are planning the future moves on global recovery from the pandemic with a focus on health and climate change.
BRI and CPEC and how it affects India and the world
- The government of India (GOI) has repeatedly objected to China’s BRI, especially the “China–Pakistan Economic Corridor” (CPEC) (a part of BRI) project since it passes through Gilgit Baltistan, an area under Pakistan occupied Kashmir (PoK).
- On the face of it, CEPC projects plan to link Pakistan’s southern port city of Gwadar and the headquarters of China’s northwestern province of Xinjiang. It plans to build all-weather roads, railway lines, and gas pipelines that will all be powered by a series of coal-based power plants.
- According to the Chinese, 42% of China’s overseas investment goes into coal projects. A major portion of their energy investments go to fossil fuels
- It starts in the chaotic Balochistan province and will assist mass movement of goods and military supplies from ports to Kashgar, the headquarters of China’s restless Uighur Muslim minority, and further into China, and back.
- Since this is disputed territory, New Delhi points out that neither Pakistan nor China has the power to make legal decisions and judgments essential in PoK and considers the use of force near our border an act of aggression.
- In August of 2019, India made it clear that any future talks with Pakistan will now be over PoK only.
What’s in it for India?
- India has long called for improving global organizations like the G7 by adding new countries that are of importance today. Trump’s offer to expand G7by including New Delhi’s amongst others was appreciated by India.
- With China rudely trampling on human rights around the globe and unleashing the virus on the world, the US is looking for partner countries to deal with Beijing.
- If Biden and Johnson want to work towards constituting a global alliance of 10-11 countries, it will be an important signal.
- India has vaccine shortages and will expect the US president to stand by his word. Raw materials for vaccine production which were stopped from being exported from the US are now available with fewer restrictions.
- US Vice President Kamala Harris had spoken to PM Modi about Washington’s plans to make vaccines available to other countries, including India. A US statement said the Biden-Harris administration will begin sharing and the first 2.5 crore vaccines will be shared by the end of June.
- India is expected to get around 20 lakh doses in the first installment immediately and around 8 crores will be shared globally.
Issues with the Chinese loans
- As of mid-2020 more than 2,600 projects costing $3.7 trillion were linked to the BRI but China added that around 20% of projects had been severely affected by the pandemic.
- The Chinese transactions lack transparency and they maintain poor environmental and labor standards. Western countries have failed to offer a positive alternative till now
- According to a report by an NGO, the Chinese communists who claim to be a workers party are exactly the opposite. Human rights violations of the Chinese migrant workers abroad are severe.
- The Chinese companies seize workers’ passports once they arrive in another country and push them into forced labor, make them apply for illegal business visas and threaten to report their illegal status if they refuse to comply, refuse to give adequate medical care and rest, restrict workers’ personal freedom and freedom of speech, force workers to overwork, cancel vacations, delay the payment of wages, publish deceptive advertisements and promises, browbeat workers with high amount of damages if they intend to leave, provide bad working and living conditions, punish workers who lead protests and so on
- China’s invasion to claim most of the South China Sea and other expansionist policies have, in recent years, has forced many countries to re-think their support to the BRI.
- Even though BRI participation promises significant economic benefits, concerns persist about loan traps, corruption, security concerns related to Chinese investment, and ongoing conflicts in the South China Sea and the India-China border
Issues within Pakistan and China
- All CPEC projects collectively worth $70 billion are planned and run by a corrupt retired Military General named Asim Saleem Bajwa. It is clear that once completed, CPEC authority will shift from the hands of the civilian government to military authorities in Pakistan.
- According to the CPEC Authority Ordinance 2019: “Except as expressly provided in this ordinance, no suit, prosecution or other legal proceedings shall lie against the authority, the chairperson, chief executive officer, executive director, any member, officer, member of staff, other employees, expert, consultant or advisor of the authority in respect of anything done or intended to be done in good faith under this ordinance, rules or regulations.”
- Such clauses provide legal protection for both the Chinese and the Pakistanis.
- CPEC could face serious security problems. China will have to face the challenge of violent activities of Muslim Uighur separatists who are fighting for an independent homeland. Ethnic Baloch separatists having kidnapped Chinese nationals in the province. Radical Islamists have blown up assets including the Mehran naval airbase on the outskirts of Karachi in May 2011.
- Imperialism is a policy of extending a country’s power and influence through expansion, use of military force, or other means. It is exactly what the communists say they oppose while they themselves try to buy poor nations and plunder whatever little resources they have by using soft loans and incentives.
- China through the BRI chooses developing countries whom they intentionally loan knowing fully well that the receiving country will not be able to pay back. Such countries are being steered into a loan trap also called a debt trap.
- This is done with the intention of obtaining financial or political concessions from these third-world countries when it comes to repayment and default. The terms of such loans are never made public and accounts are never audited plus the contractors are paid directly from China.
- Pakistan has received a bulk of BRI loans and has struggled to pay them back. This forced China to slow down funds that led Pakistan back to the US, its old ally. This exposed China’s loans to the world.
- It shows Pakistan is vulnerable and China could exploit and force them to give up the authority of key assets to China. China is arranging to make loan repayments in a different way or at a later time than was originally agreed shows it is ready to wait.
- China wants Pakistan to provide legal recognition to the illegally held Gilgit Baltistan region without attracting opposition from Kashmiri separatist leaders in Pakistan.
- They say it is necessary for Pakistan to provide legal cover to the Chinese investment on CPEC running through Gilgit Baltistan where the trend is of restlessness against what locals consider Pakistani and Chinese occupation of their land.
- Pakistanis could turn the Gilgit Baltistan region by recognizing it as its fifth province of the country. Pakistan had not merged Gilgit Baltistan with the rest of the country to show Kashmir as the disputed territory and any recognition might be the end of their Kashmir dispute.
- Among other things, the port town of Gwadar was recently being fenced off for security reasons. The fencing is part of a master plan to separate Gwadar from Balochistan and bring it under direct Chinese control.
- By fencing a port town, the signal to the business world and Chinese investors was that the country is unsafe and insecure for would-be investors. Chinese investors are growing less interested in unprofitable but politically right projects
How the Chinese operate
- In China, power is concentrated in the hands of a leader and a small elite who are not elected representatives of the 140 crores odd population and are in turn not constitutionally responsible to the people. The elite are opposed to individual freedom of thought and action and believe in the principle of blind submission to authority called Authoritarianism.
- China tends to coerce smaller countries instead of directly picking on the United States. Chinese economic sanctions tend to focus on large state-owned enterprises or large private businesses. The business community then presses the government to improve relations with China.
- Each time China has restricted imports, the goods concerned are commodities that they can easily purchase from other countries. China has avoided blocking imports that are deemed necessary to Chinese commercial growth
Chinas history of using non-military coercion on foreign countries
- Way back in 2010, the Norwegian parliament appointed a Norwegian Nobel committee that awarded the Nobel Peace Prize to Chinese political activist Liu Xiaobo imprisoned by China accused of being someone who opposes China’s official state policies. China cut diplomatic and trade ties and imposed sanctions on Norway.
- Liu Xiaobo wrote and publicly published articles on the Internet, organized and persuaded others to sign to try and reform China’s state power and social system. The People’s Republic of China leaders cited criminal law and accused Liu of incitement to overthrow the regime, and imprisoned him.
- China banned salmon from Norway. Norway’s market for fresh salmon in China fell from about 90 percent in 2010 to under 30 percent by the first half of 2013. China denied a former Norwegian Prime Minister a visa to visit China. Starting from January 2013 they rejected Norwegians from the list of European citizens who could stay in Beijing for up to 72 hours without a visa.
- Their economic moves never affect losses to themselves. This was evident when in 2011 a Chinese state-owned company bought a Norwegian hydro company for its expertise in deepwater drilling. Reserves including 190 trillion cubic feet of natural gas and 11 billion barrels of oil were found with much more undiscovered in the South China Sea
- This system of justice works well in an authoritarian state but never in a democracy and the whole world opposed it. Norway went a step forward. For the Chinese, this was not a human rights issue but interference in the internal affairs of their country. They cite current development and stability to silence opposition.
- In September 2010, a Chinese trawler was ordered by Japanese patrol vessels to stop for inspection since it was traveling 12 km off the Senkaku Islands, which was outside the agreed area for Chinese fishing, and within disputed Japanese territorial waters. The Chinese refused the order and attempted to flee from the scene.
- During the chase and interception, it collided with JCG patrol vessels. The Japanese boarded the Chinese trawler and arrested its captain for obstruction of performance of public duty and illegal fishing and detained the trawler, the captain, and 14 crew members.
- In an effort to release the captain of a Chinese fishing trawler, Chinese customs officials blocked exports of rare earth minerals to Japan. They are used as components in high technology devices, like smartphones, hard disks, and electronic displays.
- The US had 28,500 soldiers stationed in South Korea. After North Korea’s fourth nuclear test in January 2016, South Korea installed U.S. missile defense systems in July 2016 ignoring the Chinese opposition. Beijing punished Seoul in an unofficial but visible manner.
- For unclear reasons, China blocked the streaming of the latest South Korean music and dramas (they were famous in China) on Chinese websites and TV channels.
- They eliminated a competitor citing tax evasion and fire safety concerns by shutting down a South Korean supermarket chain that had stores in China. This chain was guilty of providing its golf course as a deployment site for the missile defenses of their country. Having lost 90% of their investment, they were eventually forced to abandon and sell all of their stores in China.
- By October 2016, Chinese travel agencies were ordered to decrease the number of travelers going to South Korea.
- In February 2016, Beijing had become Seoul’s biggest creditor, holding nearly 18 percent of South Korea’s public debts, and naturally, China did not attack South Korea’s financial sector.
- In April 2012, a Philippine warship confronted Chinese fishermen in the South China Sea near the resource-rich Scarborough Shoal an area disputed by both countries. China was the Philippines ’ biggest importer of bananas. Collateral damage followed when the Chinese imposed tighter controls claiming that pests were found in banana imports.
- This sent banana growers in the Philippines into a crisis in their industry and went on to affect 2 lakh people in that country alone.
- China views the Dalai Lama as someone who supports the separation of Tibet from China and strongly opposes all countries that entertain the Buddhist monk. The Dalai Lama had fled Tibet after a failed uprising against Chinese rule in 1959, was granted asylum by India, and has been living here ever since.
- During a visit in November 2016, the Dalai Lama spoke to thousands of supporters in Mongolia. China had protested previous visits by the Dalai Lama by briefly closing its border in 2002 and temporarily canceling flights from Beijing in 2006.
- A week after the November visit, China imposed fees on imports from Mongolia and charged added transit costs on goods passing through its border with Mongolia.
- China’s latest target is Australia after they barred Huawei and ZTE from its 5G network after accusing China of interfering in Australia’s domestic politics. They also called for an independent inquiry into the origins of the Covid-19 pandemic.
- China has always relied on doubtful legal grounds to justify trade blockades. They blocked 13 products from Australia the total volume of which was $41.8 billion in 2019. China alleged, that Australian winemakers were receiving illegal government subsidies that allowed them to sell their products in China at lower prices.
- This year many countries imposed sanctions on officials in China over human rights abuses against the mostly Muslim Uighur minority group in the Chinese northwest region of Xinjiang.
- China has detained Uighurs at camps, where they are tortured, forced into compulsory labor, and sexually abused.
- The sanctions were introduced by the European Union, United Kingdom, the US, and Canada.
- China dismissed the allegations of abuse, claiming the camps are “re-education” facilities used to fight terrorism. It then reacted with its own sanctions on European officials.
- G7 leaders scolded China for denying them access to laboratories where the coronavirus was allegedly manufactured and demanded a full and thorough investigation of its origins in China.
Chinese communist policies seldom change
- Change in leadership has not changed their foreign policies. Hu Jintao ruled from 2003 to 2013 and Xi Jinping has been their premier since 2013.
- Chinese coercion has had mixed results. In a few cases, targeted countries have changed their policies after facing coercive economic tactics.
- A year after the Galwan incident that resulted in the death of 20 Indian soldiers, a whopping 43% of Indians rejected Made in China products.
- After seven years of restrictions on Norwegian salmon exports to China combined with curbs on interactions with Norwegian officials, Norway buckled and signed a joint statement with China that said that they fully respect China’s sovereignty and will do their best to avoid any future damage. China tasted success when Japan released the Chinese fishing trawler captain without charges that same month. Mongolia promised that it would never invite the Dalai Lama in the future and issued a statement saying that it felt “sorry”