Mr. Ravi Prasad is a Yenching Scholar at Peking University. Jennifer Loy interviewed him regarding how the Belt Road Initiative (BRI) of China would affect nations in South Asia.
Regarding the BRI, do you believe Xi Jinping’s intentions are truly economic and almost nation-building, or do you think there are military motives as well?
There are geopolitical motives too – but it is country, sector and protect specific. In the most part, BRI is underpinned by market forces that Xi Jinping has no control over. These are Chinese firms deciding to invest abroad off their own volition. Of course, when projects are financed by policy banks with direct central government involvement projects may have stronger geopolitical rationale.
Military motives are secondary motives to protect the investments made. E.g. Turning Djibouti and Gwadar (Pakistan) ports into military stations.
The BRI is an incredible endeavor, a modern Silk Road. How is the Chinese government funding this project?
It is not just the Chinese government. The lion’s share of BRI investments made up to now have been made by private enterprises and SOEs, who the central government does not command direct control over. The policy banks the central government commands direct control over. Much of the financing is done in-house – through issuing bonds and bank loans to SOEs. There is limited capital raising from abroad at this stage.
How do the Chinese people view such an extensive project?
Very positive, albeit complicated.
BRI projects would truly benefit the host nation if locals are employed. Is this part of the BRI?
Yes. In a recent trip to Ethiopia – Chinese infrastructure projects and manufacturing factories overwhelming employed local employees. Some projects in certain countries do only employ Chinese though. This of course faces backlash – and explains why countries like Kyrgyzstan and Malaysia have imposed local worker requirements on Chinese projects.
Are the free-trade agreements China recently made in South Asia also part of the BRI or are they separate?
BRI has no set definition – it is a fluid concept. If it’s trade and investment related in BRI regions, then I personally would brand it as BRI, yes.
In Xi Jinping’s first address to the UN in 2013, he stressed, “We should build partnerships in which countries treat each other as equals, engage in mutual consultation, and show mutual understanding.” I feel this does not prove true today with Sino-Indian relations, especially as China is gaining influence in South Asia. What can you say to this in terms of the BRI?
Agreed, actions don’t necessarily reflect words. See here.
India appears to be losing influence in Nepal, Sri Lanka, and the Maldives. What do they need to do to regain this, or should they wait and see how the BRI aids the region?
Wouldn’t necessarily agree with the statement. Just because China has larger investments in these countries does not mean it has ‘influence’. That said, India is partnering with Japan to counterbalance BRI. Similarly, India has just agreed to open up more consulates in Africa. The new great game is one over infrastructure, and India is an active participant.
What benefit(s) will India receive from the BRI? What does it need to do to benefit from it? Does Indian Prime Minister Modhi even want Chinese investment?
India already receives lots of Chinese investment – you just don’t hear much of it. Especially Chinese private companies in the tech space are investing heavily in India (Indian cricket team sponsored by Chinese companies!). India is part of BCIM – but admittedly that project has been stalled. When geopolitics is not involved India is happy to be involved with BRI – see its engagement with AIIB for example. India receives most investments.
Jennifer is Research Associate for Nepal Matters for America.