By Yang Fanxin Source: China.org.cn Published: 2017-5-7
Chinese President Xi Jinping (R) meets with visiting Indian Prime Minister Narendra Modi in Xi`an, capital of northwest China`s Shaanxi Province, May 14, 2015. (Xinhua/Yao Dawei)
Sino-Indian relationship is often described as one of "the Dragon and the Elephant" by the media. After the "Belt and Road" (B&R) Initiative was proposed, this relationship seems confounded. The rendering by media has resulted in the Indian government`s irresolution to develop relations with China.
The B&R Initiative was promoted by Chinese President Xi Jinping in September and October 2013 in Kazakhstan and Indonesia successively, referring to the "Silk Road Economic Belt" and "21st-Century Maritime Silk Road." Except India, many countries along the B&R routes have responded actively to it.
Some scholars pointed out that India aims to become the largest country in the world and sees China as a competitor. It is worried about the possible economic impact from China. In fact, the B&R Initiative has countless ties with India, which will certainly help to promote the economic, trade and cultural exchanges between China and India.
The Silk Road traditionally advances the exchange of business, culture and ideas between China and South Asian countries. In a broader sense, it refers to each and every cultural exchange and business route formed since the medieval times crossing Eurasia, North Africa and some parts of East Africa. It involved the maritime silk route, the northwest silk route and the southern silk route.
Historical records showed that the Sino-Indian trade along the southern routes of the Silk Road was prosperous; China`s raw silk, silk thread and silk were transported to the Indian port -- Barygaza commercial center -- and then sold to other Indian areas. According to estimates constructed by Angus Madison, a British economist, the trade volume between China and India accounted for more than half of world output in 1600.
Currently, the Silk Road Economic Belt comprises six economic corridors designed to build up a trade and transportation network connecting Europe, Asia and Africa. The Bangladesh-China-India-Myanmar (BCIM) Economic Corridor, as one of the six, is expected to radiate the economic effect of the Eurasian Economic Corridor to South Asia, South East Asia and the Indian Ocean region.
The 21st-Century Maritime Silk Road envisages two major routes, one running from the coastal ports of China to the Indian Ocean via South China Sea, and the other running to the South Pacific via the South China Sea. According to China`s Vision and Actions in relation to this initiative, the focus will be on collaborating with the countries interested in the initiative to build smooth, secure and efficient transport routes connecting major sea ports along the Belt and Road to promote trade.
At present, there are few interactions between China and India under the B&R framework. With the overwhelming trend of global economic development in Asian areas, co-building of the Belt and Road will be an inevitable topic for Sino-Indian relations and regional interaction.
Firstly, China and India have conjunction points in infrastructure construction. In the past 20 years, China has raised lots of ideas on infrastructure construction and achieved success, such as establishing the Asian Infrastructure Investment Bank. Meanwhile, India has grand designs in infrastructure.
Since the Modi government took office in May 2014, a series of measures in relation to economic revitalization and government reform have been introduced, such as "Made in India," "Start-up India," etc. The total budget for the fiscal year of 2017 shows that investment in rural areas, infrastructure and poverty elimination will be expanded. One trillion rupees (about US$14.8 billion) have been budgeted for boosting agricultural development. In respect to the aged railway system, the Indian government plans to allocate 100 billion rupees (about US$1.48 billion) in the new fiscal year to improve train safety. India has also allocated a budget of 640 billion rupees for highway construction. In addition, the Indian government plans to build 10 million houses by 2019 for those without houses or living in a Kutcha house made of mud, straw and leaves. Based on China`s successful experience in infrastructure construction, there is extensive room for cooperation in this field between the two countries.
Secondly, broad space exists in economic and trade cooperation of China and India. Alibaba Group invested in Indian e-commerce Snapdeal; Ant Financial Services Group bought into the largest online payment tool Paytm; and Chint Group has established deep cooperation relations and new energy network systems with famous Indian enterprises such as TATA and POWER. According to data from the Department of Commerce of Zhejiang Province, Zhejiang alone has invested in up to 22 large projects in India in the past three years, totaling US$46.12 million.
Currently, the key and difficult points of economic and trade cooperation between China and India are how to identify their respective advantages and positions in the industry chain. Chinese and Indian enterprises could try strategic cooperation and open up the third-party market jointly to improve their positions and interest in global value chains.
Thirdly, China and India have a consensus in anti-terrorism and combating piracy. They have organized joint anti-terrorism training sessions as well as maritime search and rescue exercises. Although cooperation has not yet extended to combating piracy on the Indian Ocean, China has dispatched at least 25 navy fleets to the Gulf of Aden; it is possible for the two countries to establish strategic dialogue and cooperation in this field in the future.
The Belt and Road Forum for International Cooperation will be held in Beijing on May 14 and 15, 2017. The leaders of China and India are expected to take the opportunity to start cooperation in various fields under the B&R framework. This will surely inject strong and positive energy to the peaceful development of the region and the world at large.
Yang Fanxin is an associate research fellow with Chongyang Institute for Financial Studies at Renmin University of China.