Expert Interview –Vinod Subramanian on China’s OBOR

“Loan defaults by other nations could be disastrous for the Chinese economy too in the long run”

Interview with Vinod Subramanian, author of “India and China: Negotiating Spaces in the Narratives”


  1. In a simple way, can you explain China’s One Belt One Road (OBOR)/Belt Road Initiative (BRI)?

While it appears to be an economic project beneficial to everyone, it is China’s ticket to being a global power.

  1. Do you believe Xi Jinping’s intentions are truly economic and almost nation-building, or do you think there are military motives as well?

It has economic, military and colonial designs.  Actions in Pakistan, Cambodia, Sri Lanka and Djibouti are examples of this. In some of these nations, Chinese troops and ships have been stationed.

  1. The BRI is an incredible endeavor, a modern Silk Road.  How is the Chinese government funding this project?

Estimated costs have been projected to be about a trillion and more.  China has foreign exchange reserves of more than $3 trillion.  They also intend to rely on institutions such as the AIIB.  A clear project report in this regard hasn’t been made known to stakeholders.

  1. How do the Chinese people view such an extensive project?

The people have never been involved much in the governance process and their thoughts on the above mentioned subject is unknown.

  1. BRI projects would truly benefit the host nation if locals are employed.  Where are examples that they have been?

Yes indeed they would but it seldom happens.  Chinese investments are always a win-loss situation and there is rarely a win-win situation.

  1. 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?

China is never known to abide by the principles of either the UN charter or international law itself. A case in point is the recent verdict of the permanent court of arbitration in the South China Sea case.  With regards to South Asia, there are attempts to threaten India’s sovereignty and strategic influence.  However, India shares good relations with all its neighbors and this is not much of a concern.

  1. 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?

We share a special relationship with Bangladesh and Nepal.  We have certain concerns with respect to Nepal and Maldives.  However we have been assured at the highest levels that Indian interests shall not be compromised.  The situation is being monitored.  As far as Bangladesh is concerned, our relations have transcended everything and it is a golden period currently.

  1. A couple months ago, India and China “reset” their relations. Was this for show or do you think it has worked?

It has definitely defused the tensions.  However the core issues have to be tackled.

  1. It appears Nepali Prime Minister Oli is interested in increasing relations with China.  Besides China Telcom Global and a Beijing funded railway into China, what other projects will Nepal benefit from with the BRI?

Nepal has a lot of hydropower potential and infrastructural growth prospects.  Foreign investors could look towards these sector and skill development of the youth.  The PM of India had pointed out in his speech to the Nepalese Parliament about the youth empowerment also. .

  1. With positive and seemingly strengthening Sino-Nepali relations, it is odd that in early May Nepal withdrew from the Budhi Gandaki hydroelectricity project. Can you elaborate?

The Govt of Nepal may have realized that the cost benefit analysis favors China.  This can be when either negotiations weren’t conducted in accordance with sound economic principles or when delay in execution of the project increases the costs.  The government of Myanmar too did the same.

  1. How far do you think Sino-Nepali relations can extend vis-à-vis Indian concerns?

India will never intervene militarily anywhere let alone Nepal.  Nepal is a sovereign country and they are well within their right to pursue foreign policies which are in their national interests.  As friends of India, they would do well to keep in mind India’s concerns and interests while doing so.

  1. In 2017 at the World Expo in Astana, Kazakhstan, the China Pavilion was concerned with clean, green technology. How have they already taken steps to implement this within the BRI?

To my knowledge they have done little till date in this regard. Their joining an Indian led initiative, the International solar alliance will be beneficial for them.

  1. Chinese tourists make up the largest percentage in the Maldives.  How will the BRI improve the Maldivian economy besides tourism?

Maldives needs infrastructure, skill development and security. At present, the Chinese are focusing on the first and third categories.

  1. Besides the 99-year lease on the Sri Lankan port of Hambantota, how else will the BRI affect the island nation?

An analysis of the projects around the world reveal that most of these projects are one sided.  The Chinese come with the capital and leave with the profits, leaving the host nation with the debts.  This debt trap diplomacy will affect all the nations who are part of this project.  Hence it is One Belt and a road to nowhere.

  1. The landlocked Kingdom of Bhutan is secluded and unique because of its geography as well as its environment and lifestyle.  Will the BRI affect it?

    The Government of Bhutan and the people are wary of the Chinese and their investments and hence will not blindly permit any project in their country. Their parliament recently rejected the India-led initiative — Motor Vehicle Agreement between BBIN (Bhutan, Bangladesh, India, and Nepal).


  1. Bangladesh is often a forgotten South Asian nation.  It is poor and suffers from great infrastructure concerns and it would greatly benefit from the BRI.  Are there any such projects?

There are certain numbers of projects. Port development is one. The details are being worked out between both the sides.

  1. What are the prospects for Gwadar and Kyaukphyu as Indian Ocean ports for China to decrease sea shipping?

They are stop gap agreements at best. There are certain security concerns which haven’t been tackled or planned for yet.

  1. How is the “China Model” affecting nations in Africa?

Debt trap diplomacy, discontent amongst local communities, massive human rights violations, compromise on sovereignty, among others.  On furthering the debt trap: as per a latest report, China is reconsidering the various projects that have been signed till date. And also less number of projects have been signed this year compared to the same period last year.  China too it appears knows the problem of loan defaults.  Loan defaults by other nations could be disastrous for the Chinese economy too in the long run.

  1. The BRI will extend to Europe eventually. Explain those that are and are not interested and their reasoning.

A fledging economy in Europe may be revived by projects pursued under OBOR.  This excites many. However, geography is seldom considered which can result in cost escalations.  The Chinese are never known to pursue transparent policies and this is what worries many nations.

  1. Xi described the BRI as a “win-win” for the nations involved.  I understand it is too soon to truly tell.  Regardless, what needs to happen for it to be a “win-win” for those involved?

    Financial transparency, respect to sovereignty, investment in local communities, generation of local employment and not for the Chinese exclusively, reliance on cultural diplomacy and commitment to human rights and dignity. The OBOR project cannot be funded by the Chinese only and multilateral institutions such as the AIIB will play a massive role in this project. Other nation which are a part of this project too may pitch in.


This interview was conducted by Jennifer Loy, Research Associate at Nepal Matters for America, Washington DC.

Image source: Mercator Institute for China Studies