Chinas achilles heel the belt and road initiative and its indian discontents

China’s
Achilles’ Heel
The Belt and Road Initiative
and Its Indian Discontents

Srikanth Thaliyakkattil


China’s Achilles’ Heel


Srikanth Thaliyakkattil

China’s Achilles’ Heel
The Belt and Road Initiative and Its Indian
Discontents


Srikanth Thaliyakkattil
Independent Scholar
Kerala, India

ISBN 978-981-13-8424-0    ISBN 978-981-13-8425-7 (eBook)
/>© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer
Nature Singapore Pte Ltd. 2019
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights of
translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and retrieval,
electronic adaptation, computer software, or by similar or dissimilar methodology now
known or hereafter developed.

The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information
in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the
material contained herein or for any errors or omissions that may have been made. The
publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
This Palgrave Macmillan imprint is published by the registered company Springer Nature
Singapore Pte Ltd.
The registered company address is: 152 Beach Road, #21-­01/04 Gateway East, Singapore
189721, Singapore


Preface and Acknowledgments

This book is the product of a sustained curiosity emerged out of reading,
listening, and in certain ways experiencing what is called One Belt One
Road initiative by China or in the current form Belt and Road initiative
(BRI) (the Chinese name of the BRI (一带一路) never changed—pointing to the difficulty of translating and communicating Chinese concepts
through English—It is also the case with many other languages).
BRI was announced during my final years as a doctoral candidate in the
School of International Studies, Peking University. The announcement
was followed by a “blitzkrieg” of BRI campaigns. It filled every sphere of
the social life of Chinese, especially in media and academia. It was also the
twilight period of the “China dream” campaign, which didn’t go well and
was fading away. Me and many of my colleagues thought it will also go in
the way of “China dream”. My colleagues in Peking University were also
proud that the previous dean of our School Wang Jisi was rumoured to be
the one who proposed the BRI idea, but it remains as a rumour. Unlike
the “China dream” campaign BRI campaign was massive, encompassing

several government departments, several think tanks and university
research departments, some of them opened just in the name of BRI or its
component Silk Road. The special character of the BRI campaign was that
it was internal and external, for other campaigns like “China dream” the
external focus was limited. In the Chinese academic circles, academicians
are also concerned with material rewards, it was not the question what is
BRI? Which concerned them, but that it came with lots of material rewards
was the most important attraction. For Chinese young scholars academic
papers with BRI in the title got accepted and published quickly,
v


vi 

PREFACE AND ACKNOWLEDGMENTS

a­ cademicians and media analysts still are in a race to pounding out books
on BRI, and carriers are made out of BRI. Hundreds of PhD thesis and
Master’s thesis was written about Belt and Road initiative. The trick was
that attach the BRI to the title of the thesis or frame the thesis in such a
way to include the BRI label, the advantage was that the academic output
or media output with BRI label got instant visibility and acceptability. In
its initial phase several foreign scholars, businessmen, media analysts from
the developed world and developing world self-recruited themselves and
went on to the pilgrimage of China as publicists of BRI in search of the
“benefit” of the BRI. But outside China there was an ever-growing number of critics of the BRI and currently they form, arguably, the largest
group. It fed into the ever-growing literature of BRI. It was the label and
narrative of the BRI that was important. After leaving Beijing, spending
my time in India and Singapore gave me very different and varied perspectives of the BRI. Outside China, the BRI discussions both in media and
academia, concentrated on the projects which China labelled as BRI, its

merits and demerits. Take out the label of BRI it ended up as a benefit/
risk analysis of certain projects. It was in want of a deeper understanding I
started this research, and which ended up as a monograph. How much of
what I understood that I can communicate through this monograph is in
doubt, but within the timeframe and available resources, the only consolation is that I tried my best.
I found out that BRI also had a huge disadvantage. BRI was and is the
largest external campaign conducted by China. It was relatively easy for
China to brand BRI as a benevolent one inside China because of the
almost absolute control of Government over media and academia.
However, outside China the label of BRI was interpreted by the countries
which have powerful and influential English media and academia. For
instance, one such country, India was successful in framing BRI as a threat,
with concerns emerging out of BRI labelled projects adversely affecting its
sovereignty and territorial integrity. Western media and academia also
interpreted the Chinese label of BRI as a threat and exploitative. China’s
first large-scale attempt to build a benevolent narrative of its engagements
with the world is a failure and in it India played a pivotal part. The failure
of the BRI narrative and currently turning it into a hegemonic and non-­
benevolent narrative outside China will have internal and external repercussions. Through BRI, China also signalled to regional powers like India
and the only reigning superpower United States that China wants to be a
dominant power in the global and regional politics. The rollback of


  PREFACE AND ACKNOWLEDGMENTS 

vii

Chinese ambitions is started earnestly by an Indo-Pacific strategy with
India and US as its core. BRI is turning out to be one of the greatest blow
to China in its global engagement, will China emerge from it is a question

only time can answer. Though sometimes history misguides, History can
also sometimes serve as the guide to the future, for Chinese Communist
Party took several devastating blows in its history, it survived the Chinese
civil war, Sino-Soviet split, Cultural Revolution, and Tiananmen Square,
and it may probably survive the BRI debacle and wait for another chance
for the glory of becoming the superpower.
I am grateful to the Institute of South Asian Studies (ISAS), the
National University of Singapore for providing space and resources for
this research. I thank all my ex-colleagues, especially Sojin, Jivanta,
Chulanee, Amitt, Dipinder and Deeparghya for their support and encouragement. Without the kind support and work environment provided by
the ISAS administration, it will be impossible to come up with this book.
I would like to thank the Chairman of the institute Ambassador Gopinath
Pillai, the Director of the institute Professor Raja Mohan, Professor
Subrata Mitra, Johnson Davasagayam, Hernaikh Singh, Sitara, Peggy,
Sally, Shilin, and Sheila for their support and cooperation during the time
I spend in ISAS. However, all the opinions expressed in this book are mine
and I take full responsibility for any mistakes sneaked into this volume.
Kerala, India

Srikanth Thaliyakkattil


Contents

1Introduction: The BRI as Strategic Camouflage  1
2The Road to the Belt and the Road 37
3The BRI and Its Different Manifestations 77
4India May Join and Benefit from the BRI: A Chinese View113
5The BRI and the Good, Not So Good and Bad Business
with India139

6India as Jealous Foe and the BRI165
7Belt and Road vs the Indo-Pacific195
8Conclusion: The Way to War235
Index249

ix


List of Tables

Table 1.1
Table 1.2

Major global financial institutions—Country voting share in %
China led major new financial institutions—Country voting
share in %
Table 1.3 Nepal—Top 5 bilateral donors (2016–2017)
Table 3.1 List of regional/national linking initiatives or development
plans for BRI “alignment”

7
8
19
96

xi


CHAPTER 1

Introduction: The BRI as Strategic
Camouflage

On April 27 and 28, 2018, Indian Prime Minister Narendra Modi and
Chinese President Xi Jinping met in the Chinese province of Wuhan to
reset the floundering relationship between their respective countries. The
content of the two-day meeting was replete with positivity. During the
summit, Modi said that “both India and China are ancient civilisations and
important neighbours of each other. We [China and India] must strengthen
dialogue, exchanges and cooperation, live in peace and build a friendship
that lasts from generation to generation.”1
The praise and emphasis on similarities were also reciprocated by Xi
Jinping, according to whom “Both China and India are countries with a
splendid history and culture, and the two countries share many similarities
in culture. China and India should conduct more extensive and deeper
exchanges, jointly commit to the rejuvenation of Eastern civilisation,
advocate respect for the diversity of civilisations and promote the harmonious coexistence of different civilisations.”2
The post-Wuhan summit statements of India and China show the
divergences between the thinking of the two countries about important
issues that impact the relations between them. According to India’s post-­
summit statement, “Prime Minister Modi and President Xi recognised
the common threat posed by terrorism and reiterated their strong condemnation of and resolute opposition to terrorism in all its forms and
manifestations. They committed themselves to cooperate on counterterrorism.”3 However, in China’s post-summit statement, terrorism was
© The Author(s) 2019
S. Thaliyakkattil, China’s Achilles’ Heel,
/>
1


2 

S. THALIYAKKATTIL

mentioned only as part of a general statement on global challenges: “We
will work together to address global challenges such as epidemic diseases,
natural disasters, climate change, and terrorism and will provide innovative and sustainable solutions.”4 This divergence can be viewed in light of
China’s repeated blockage of India’s attempts at the United Nations to
list Masood Azhar, the chief of Pakistan-based terror group Jaish-eMohammed (JeM), as a global terrorist.5
Both statements addressed the India-China border issue. The Chinese
statement was a reiteration that border issues should be solved peacefully
and that it was important to maintain peace in the border areas. However,
the Indian statement was more specific; it stated that “the two leaders
underscored the importance of maintaining peace and tranquillity in all
areas of the India-China border region in the larger interest of the overall
development of bilateral relations.”6 Indian concerns that the border issue
would negatively impact the overall relationship between India and China
were not reflected in the Chinese statement. India views the boundary
settlement between itself and China as a prerequisite for a healthy overall
relationship, but China tends to separate the border dispute from other
aspects of the India-China relationship.
Similarly, the Chinese emphasis on supporting “the multilateral trading
system” and opposing “protectionism” is missing from the Indian statement.7 From the Chinese perspective, the main aim of the Wuhan summit
was to show that India is on the side of China in resisting the imminent
retaliatory trade measures of the United States (which eventually materialised) against China due to its alleged unfair trade practices. Following
the meeting between Modi and Xi, the Chinese media selectively reported
Indian opinions, highlighting that India opposed United States-initiated
trade protectionism while ignoring the fact that India had also initiated
tariffs to protect its industries from unfair trade practices by China.8 The
Chinese media also tried to depict a combined Chinese-Indian front
against the West, as well as blaming the Western media for exaggerating

the differences between India and China.9
In another major divergence, China’s post-summit statement repeatedly emphasised the “five principles of peaceful coexistence”. This reference was missing from India’s post-summit statement.10 The reason was
that since the 1962 war, Indians have never taken Chinese reiterations of
the “five principles of peaceful coexistence” for granted. For Indian strategic experts, the fact that “China never took the doctrine of peaceful coexistence seriously was, however, never in doubt.”11


1  INTRODUCTION: THE BRI AS STRATEGIC CAMOUFLAGE 

3

Ultimately, the Wuhan summit was just a showpiece event achieving
nothing but a series of photo opportunities for both leaders. The core
issue in the background was China’s Belt and Road Initiative (BRI)
strategy. Discussions of the BRI were conspicuously absent from the
Wuhan summit. The BRI has put into motion a set of strategies and
counter-­strategies that have increased the threat perceptions and militarisation of the Indo-Pacific region. Summits such as that in Wuhan or
any other so-­called confidence building meetings are held against the
backdrop of the aggravated mistrust in the region that the BRI strategy
has created.
The BRI has marked a turning point in the geopolitics of Asia. As
argued in the following chapters, it is an attempt by China to establish its
narrative dominance over Asia, thus establishing itself as the predominant
power in the Asian region and the world. Becoming the dominant power
in Asia serves many purposes for the Communist Party-led system of
China. It will ensure its survival as a unique political system, it will increase
the internal legitimacy of the Chinese Communist Party (CCP), and it will
substantially increase the power of the CCP to shape its geopolitical environment. India’s objections and resistance to the BRI have become its
most vulnerable point, and the resulting discourse has securitised the
BRI.  Indian resistance has helped to transform what was purported by
China to be an economic and cultural initiative into a regional security

threat, as reflected in the Chinese discourse on the Indian attitude
towards the BRI.
Several questions raised in the Indian parliament related to the BRI
reflect India’s concern over the implications of the BRI. The Indian worries are mainly concentrated on the question of the China-Pakistan
Economic Corridor (CPEC). The official Indian position states that
the so-called ‘China-Pakistan Economic Corridor’, which is being projected
as a flagship project of China’s ‘One Belt One Road’ (OBOR) initiative,
passes through parts of the Indian state of Jammu & Kashmir, which has
been in illegal occupation of Pakistan since 1947. [The Indian] government
has conveyed to the Chinese side, including at the highest level, its concerns
about China’s activities in Pakistan-occupied Kashmir and asked them to
cease these activities. [The Indian] government has also strongly conveyed
its position at multilateral and international fora where issues related to
OBOR / CPEC have been raised, citing its concerns over the violation of
India’s sovereignty and territorial integrity by this project. [The Indian]
government has clearly articulated its firm belief that connectivity initiatives


4 

S. THALIYAKKATTIL

must be based on universally recognised international norms, good
­governance, rule of law, openness, transparency and equality and must be
pursued in a manner that respects sovereignty and territorial integrity.12

The then-Minister of State In the Ministry Of External Affairs,
M.J.  Akbar, further states that “the inclusion of the so-called CPEC,
which passes through parts of the Indian state of Jammu & Kashmir under
illegal occupation of Pakistan, as a flagship project of OBOR reflects a lack

of appreciation of India’s concerns regarding the issue of sovereignty and
territorial integrity.”13 China has ignored India’s concerns, and CPEC
remains the most contentious issue in the BRI strategy.
It was not the only Indian concern that led to the Indian rejection of
the BRI; there are also other factors, such as the long-running border
dispute, the enormous trade deficit, the sale of Chinese weapons to India’s
South Asian neighbouring countries, and, most importantly, China’s strategic partnership with Pakistan.
Indian objections and the resulting events have had an unfavourable
impact on China’s BRI strategy. Given the objectives and the wide-­ranging
issues expected to be solved by the BRI, the impact of the Indian objections has proven detrimental. The BRI is an ambitious strategy that China
wanted to use as a tool to carve a space out for itself in global geopolitics.
One of the vital purposes of the BRI was to decrease China’s legitimacy
deficit. Two examples of this deficit are, first, the Boao forum for Asia,
which is considered one of the biggest events organised by a rising China
to disseminate its ideas and engage with the Asian region and the world.
However, major Western leaders or Asian leaders rarely attend the Boao
forum for Asia. The usual figures are Pakistani ministers and some leaders
from small countries belonging to the Association of Southeast Asian
Nations (ASEAN). The second, more interesting example is the Confucius
Peace Prize. Although, at present, it is claimed to be awarded by a private
organisation, it was initially set up in 2010 by an association affiliated with
the Chinese Ministry of Culture as a response to the awarding of the
Nobel Peace Prize to the jailed Chinese dissident Liu Xiaobo. Neither
then nor now has it been taken seriously by the world, by the winners or
even by the Chinese themselves.14
The BRI is also the product of the Chinese realisation that it should
have control over its own narrative, the power to monopolise, both
internally and externally, the answer to the questions such as “what is
China?” and “what is China doing?” is vital for the survival of China’s

1  INTRODUCTION: THE BRI AS STRATEGIC CAMOUFLAGE 

5

current political system. It also requires China to be the leading power
in the world. For Chinese party elites, the example of the Soviet Union
was telling. The Soviet Union was powerful and relatively prosperous.
Nevertheless, it collapsed because of the influence of the Western narrative of democracy and “free speech.” China wants to be the leading
superpower in the world so that it will be less influenced by existing
systems and institutions, which are dominated by the West. The BRI is
an attempt to set norms and rules of the international system that are
conducive to the future development of China. Through the BRI and its
accompanying institutions, China wishes to create global institutions
with different rules and norms, thus gradually creating a different or
parallel financial and trading system that is dominated by China.

Attempt at a New Form of Global Governance
Currently, the United States, the European Union, and Japan control the
global financial institutions. With its rise as one of the world’s largest economic powers, China is demanding a greater voice in these institutions.
The 2008 financial crisis triggered the strengthening of China’s demands
for a more significant say in global financial institutions.
Increasing global economic integration led the financial crisis, originating within one national jurisdiction spreading to other countries, making
it a source of global crisis. By the end of the nineteenth century, “the
transatlantic cable had been laid, and as a result, Britain, France, Holland,
Germany, and the USA had interlinked financial markets, which moved in
parallel, especially at times of crises.”15 At the end of the twentieth century, the Asian crisis of the summer of 1997 quickly spread to other Asian
countries and even threatened Latin American countries such as Brazil.
The more a national economy is integrated into the global economy, the
more it will be affected by a global financial crisis.

According to Meghnad Desai, “a small number of interest rate cuts by
the [US] Federal Reserve calmed the markets and resolved the [1997–1998]
crisis.”16 The 1997–1998 Asian financial crisis also once more solidified
the position of the United States of America as both the preeminent and
the pivotal economic power of the world. The 2008 financial crisis
­happened in a different global environment. The crisis, which started in
the United States, quickly spread all over the world. China learned from
the 2008 financial crisis that its economy is deeply integrated into the
United States-led global economic system and that it has very less choice


6 

S. THALIYAKKATTIL

but to adapt to the cyclical crises that are bound to happen in the “capitalist” United States economy.
Apart from its low level of representation in financial institutions relative to its economic size, China is also currently facing a backlash from
Western economies, leading to restrictions on technology transfers from
Western economies to China and restrictions on Chinese investments in
high-tech Western companies. China is also facing what Gabriel Palma
cited as a cause for the economic stagnation and crisis in the Thai economy
and the Malaysian economy during the 1997 crisis. That is, China is reaching a point in its process of industrialisation where the further upgrading
of its exports to higher value-added products (and, in particular, to breaking away from a “sub-contracting” type of industrialisation) is becoming
increasingly difficult.17
A combination of factors, including the 2008 financial crisis, led to the
rise of the Chinese discourse on global governance. The disarray in Europe
because of the refugee crisis, the continuing relative economic stagnation
of Europe, the rise of right-wing populism in Europe and, above all, the
increasing cleavages between the Trump administration and major
European nations such as Germany and France have led to the Chinese

belief in an emerging power vacuum. China’s perception of a power vacuum in international politics is articulated by the Chinese official news
agency, Xinhua. According to Xinhua, “the rising populist ideology in
Europe, along with Trump’s election in the United States, has posed
potential challenges to economic globalisation, trade liberalisation and
global governance as a whole.”18
The term “global governance” has become one of the most frequently
used terms in Chinese political discourse since the 2008 economic crisis.
The 2008 economic crisis was an eye-opener for China; it showed that
without having a hold on the levers of global or regional economic governance, China would be on the receiving end of the economic fluctuations
in other parts of the world, especially the United States.19

Xi’ Jinping’s Thoughts on Global Governance
Chinese President Xi Jinping himself has frequently referred to China’s
need to participate in global governance more actively. According to Xi
Jinping, “no matter how the reform of the global governance system may
unfold, we should always take an active and constructive part in the
process.”20


1  INTRODUCTION: THE BRI AS STRATEGIC CAMOUFLAGE 

7

He has also given reasons for China’s focus on and push for global
governance reform. In Xi Jinping’s words, “as the international balance of
power has shifted and global challenges are increasing, global governance
system reform has emerged as a ‘trend of [the] times.’”21 Xi Jinping further reiterated that “China will work with people of all countries to push
the world order and global governance system towards a more just and
reasonable direction.”22 However, China’s desire to push for global governance reform came with a stark warning from Xi Jinping: “…China will
never give up our lawful rights. Chinese people do not believe fallacy and

nor are we afraid of evil forces. Chinese people do not make trouble, but
we are not cowards when involved in trouble.”23
The key term in Xi Jinping’s thoughts on global governance is the mention of the shift in “international power.” Chinese leaders believe that
international power has already shifted and is in their favour. For Xi
Jinping, pushing for global financial reforms to rectify the “unjust and
improper arrangements in the global governance system” has become an
important foreign policy issue. China is trying to reform the global financial order in two ways: by increasing its share in global financial institutions and by building new financial institutions in which it has a majority
stake (see Tables 1.1 and 1.2).
Regarding the new financial institutions, China is focused on the AIIB
rather than the NDB because all BRICS countries have equal shares
in the NDB.
The usual Chinese rhetoric of a win-win situation has accompanied
China’s aspirations for global governance reform; China has assured the
global audience that governance with Chinese characteristics would treat
Table 1.1  Major global financial institutions—Country voting share in %
Countries
US
Japan
China

IMF
16.52
6.15
6.09

IBRD (World Bank)
15.98
6.89
4.45

ADB
15.6
15.6
6.4 (B.S)

Source: “IMF Members’ Quotas and Voting Power, and IMF Board of Governors,” IMF, November 21,
2018, (accessed November 23, 2018);
“The World Bank,” September 30, 2018, />IBRDCountryVotingTable.pdf (accessed November 23, 2018); “Asian Development Bank,” December
31, 2017, (accessed November
23, 2018)


8 

S. THALIYAKKATTIL

Table 1.2  China led major new financial institutions—Country voting share in %
Countries
China
Russia
India
Brazil
South Africa

AIIB
26.5872
6.0146
7.6352

New Development Bank (NDB) (BRICS Bank)

20
20
20
20
20

Source: “Members and Prospective Members of the Bank,” AIIB, October 8, 2018, b.
org/en/about-aiib/governance/members-of-bank/index.html (accessed November 23, 2018)

every country, whether rich or poor, small or large, equally. The BRI is
designated as an umbrella concept for global governance reform.
Nevertheless, China faces intractable obstacles on its way to creating its
own space in the global system. Although China has adapted to the world,
the world has yet to acclimatise to China. The behaviour of the Chinese
state is judged according to the yardsticks previously set by the Western
powers after the Second World War. Considering that China is now a
Westernised state, in which, except for the political system, most things
Western have been adopted, it will be hard for China to Sinicise itself and
almost impossible to Sinicise the world. The best that China can hope for
is that with economic interdependency, fewer countries will perceive it as
an anomaly in world politics. Nevertheless, with the increasing tensions
between China and regional powers, on the one hand, and Western powers, on the other hand, the “economic interdependency theory” of stability is already discredited.
Until China, if ever, becomes the dominant power in the world, China
faces the difficult task of maintaining belief in the current political system.
It has to struggle with the infiltration of other belief systems, such as
those of Christian missionary groups. As has always been the case, China
is searching for new weapons for the battle of ideas. It is evident from
history that ideas count more than armies. Marquis Astolphe de Custine
wrote in 1839 that “…customs have no power over thought. Armies cannot exterminate it. Ramparts cannot stop it. Ideas are in the air, they are
everywhere, and ideas change the world…,”24 and this holds true for any

society, including Chinese society. With the slowing down of China’s economic growth and the general anti-globalisation trend worldwide,
China’s task looks difficult. Until it becomes a peer power of the United
States, it has to maintain the Chinese population’s belief in the current


1  INTRODUCTION: THE BRI AS STRATEGIC CAMOUFLAGE 

9

system. As part of these efforts, the Chinese government has conducted
campaigns that have tried to relate the current system to happiness and
the realisation of the dream of a prosperous life, the same dream that the
Soviets wanted to realise—happiness on earth. Regarding the struggling
Soviet system, Soviet writer Vladimir Voinovich wrote in 1982 that “the
system cannot survive without ideology, and ideology requires belief.”25
Similarly, China is also in a constant struggle to maintain its population’s
belief in the country’s current political system.
In pursuit of a new ideology that appeals to the current modern society
of China, the CCP developed a belief system that synthesises Chinese traditions and Sinicised Marxist ideology. Thus far, the CCP has found that
defending its own system in China is a losing battle and that, without
defending itself outside China, it cannot achieve the goal of becoming a
great power. Becoming a great global power requires a global narrative,
requiring a narrative such as the BRI, which has labelled Chinese projects,
both internally and externally, as part of a grand narrative of China-centric
globalisation and the road to superpower status. However, under the BRI
framework, China’s relations with the South Asian region are themselves
an example of the obstacles that China faces in implementing this strategy.

The Power of Narrative
Molly Patterson and Kristen Renwick Monroe argue that a narrative is

essentially a story. “Yet narrative also refers to the ways in which we construct disparate facts in our own worlds and weave them together cognitively in order to make sense of our reality.”26 Human beings construct
political realities through narratives, and these narratives, in turn, influence our political perceptions and identities. They also reflect one’s self-­
perception and worldview. Research on political discourse conducted by
political scientists shows that political discourse relies heavily on narrative
patterns because human beings rely on narrative as a way of understanding
the world and attributing meaning to it. According to Shaul R. Shenhav,
“The dominant role of narratives in political discourse is also based on the
centrality of narrative in the formulation and maintenance of worldviews.”27 The BRI forms such a narrative by China to create new realities
and worldviews of China.
Chinese leaders have called for “good stories about China” to be spread
all over the world, both literally and figuratively. Xi Jinping has called for
Chinese journalists to tell “China’s stories well and spread China’s voice.”


10 

S. THALIYAKKATTIL

Although they are banned in China, China’s Publicity Department
(Propaganda Department) uses Facebook, Twitter and YouTube to spread
stories about China to the outside world. To tell stories about China,
China’s official news agency, Xinhua, operates approximately 180 overseas bureaus, reaching over 200 countries and regions.28 Thus far, the
impact on the global audience seems to be minimal. Obtaining the acceptance of the outside world for Chinese stories is considered to be an
important factor in boosting the cultural confidence of the Chinese population and the legitimacy of the CCP-led political system of China.
“Storytelling” is one of the core concerns of the CCP. For instance, on
May 23, 2017, Chinese political advisors met to discuss how to build the
country’s cultural confidence and to tell Chinese stories well. Yu
Zhengsheng, the chairman of the National Committee of the Chinese
People’s Political Consultative Conference (CPPCC), the top advisory
body, chaired the meeting, and according to the members of the CPPCC

National Committee, stories about China are the best means of building
the country’s cultural confidence and telling others about its traditions,
ideas and values.29 Telling “good Chinese stories” is considered to be the
responsibility of all Chinese people. Liu Qibao, head of the Publicity
Department of the CCP Central Committee, has asked experts and celebrities from sectors including the economy, science, literature, the arts and
sports to actively engage in international exchanges and present to the
world the real China “through good story telling.”30 The BRI was conceived as storytelling on a global scale, encompassing roads, bridges, railways, ports, religion, culture and many more areas.
In the post-liberation history of China, the CCP has created many narratives for internal and external consumption to construct political realities
and to give meaning and essence to the existing political realities. The BRI
is distinct and extraordinary in the sense that the objectives it seeks to
achieve are both domestic and global. A globalised China requires such an
objective. It is also exceptional in the sense that China has had the resources
to propagate the story of the BRI to a global audience, and it has had
enough ground realities all over the globe to create such a narrative. The
BRI narrative provides a modern Chinese worldview, and it projects what
it wants the world to believe about China. However, the Chinese narrative
of the BRI has created a discourse, and the discourse has created realities
that are different from what China intended with the creation of the
BRI. India’s rejection of the BRI plays a critical role in the discourse created thus far.


1  INTRODUCTION: THE BRI AS STRATEGIC CAMOUFLAGE 

11

South Asia and the BRI: Pawns and Pivots
Under the BRI framework, Chinese involvement in South Asian countries
has been marred by crisis and suspicion within the respective South Asian
countries and by the strengthening of the Indian threat perception. For
instance, China’s relationship with Pakistan is considered an “all-weather

friendship.” Nevertheless, with the deepening involvement of Chinese
companies and Chinese workers in Pakistan, strains in China’s relationship
with Pakistan are beginning to appear. For instance, in the first week of
April 2018, the picture of a Chinese engineer standing on top of a Pakistani
police mobile van and the violent conflict between Chinese workers
involved in CPEC construction projects and Pakistani law enforcement
officers raised strong reactions from Pakistani media and the Pakistani
public.31 The concerns with and critique of this Chinese behaviour by
Pakistanis were far greater and stronger than the indifference of Pakistani
politicians to it. Responding to the incident, Professor Ejaz Hussain, the
head of the Social Sciences Department at Iqra University, Islamabad, reasoned that “being blinded by sheer arrogance and a sense of superiority,
the Chinese may one day scuffle with the army too, which also provides
Chinese nationals with security. Lastly, if the CPEC is not negotiated
rationally and managed intelligently, and if Pakistan continues to enhance
its dependency on Chinese weapons, capital, technology and workforce,
the testable notions of the colonisation of Pakistan will get sufficient data
in the years to come.”32
An editorial in Pakistan’s Daily Times condemned the subservient
nature of Pakistan’s relationship with China. It stated, “The entire incident ought to come as a belated wake-up call for Islamabad. For the
[Chinese] engineers reportedly retaliated by cutting power supplies to the
police camp located within the main compound. Nevertheless, as if that
were not enough, they also effectively went on strike; leaving heavy
machinery and vehicles abandoned at various points. This suggests a risky
future whereby all the power is more or less concentrated in the hands of
a visiting workforce. Nevertheless, the Pakistani government shares some
of the blame. For it might have wanted to fully decolonise its mind following its last encounter with [the] Empire before this time actively courting
a new master. Colonisation is not for the faint-hearted. Moreover, this is
something that Pakistan should have learned better than most.”33 The
economic benefits from Chinese investments in infrastructure d
­ evelopment

in Pakistan during the initial stages of the CPEC appeared evident and


12 

S. THALIYAKKATTIL

v­ isible. This was also the case with Chinese infrastructure investments in
Sri Lanka, and Pakistani scholars and media are all too aware of the consequences of Chinese investments in Sri Lanka.
Pakistani media refer to the outcomes of Chinese-funded infrastructure
and other projects in Sri Lanka to stress Pakistan’s need for caution. For
instance, in 2007, the EXIM Bank of China began funding Sri Lanka’s
Hambantota Port. The port was completed at a cost of US$ 1.3 billion. In
its initial phase of operations, the port was basically abandoned. Sri Lanka
then failed to repay the debt to China incurred by the construction of this
port, and in December 2017, it officially handed the management of the
port to a Chinese company on a 99-year lease. Pakistani media also point
out that most of the major Chinese-funded infrastructure projects in Sri
Lanka are basically abandoned and that Sri Lanka faces a debt crisis because
of the debt servicing issues related to these projects.34
Pakistani media and experts warn that if Pakistan is not cautious,
Chinese-funded large-scale infrastructure and other projects in the country may face a fate similar to those in Sri Lanka. They argue that Pakistan’s
current interest in the CPEC is the result of the country’s weak economy.
However, if these large-scale projects are not self-sustaining, they will do
more harm than good to Pakistan’s economy. Nevertheless, the reality is
that Pakistan will face an uphill battle in ensuring the self-sustainability of
Chinese-funded large-scale projects, given its slow gross domestic product
growth and deteriorating internal security situation.35
Eventually, in practice, Pakistan had to cede the control and operation
of Gwadar Port to China. In November 2017, the Pakistani minister for

shipping and ports, Mir Hasil Bizenjo, revealed that China would obtain
a 91% share in the revenue of Pakistan’s Gwadar Port and that a Chinese
port holding company will operate the port over the next 40 years. In reality, Pakistan was relinquishing the port to China.36
China is also aware of the risks involved in operating in politically volatile countries such as Pakistan. For instance, the Chinese consulate in
Karachi, Pakistan, was attacked by Baloch separatists from Balochistan
province to express their discontent regarding Chinese projects in their
region. A separatist group, the Balochistan Liberation Army (BLA),
claimed responsibility for the attack. According to the spokesman of the
BLA, “We [Balochi people] have been seeing the Chinese as an oppressor,
along with Pakistani forces.” With the increasing visibility of Chinese
nationals in Pakistan, it is expected that Chinese nationals will become the
targets of internal political and separatist factions in Pakistan.37


1  INTRODUCTION: THE BRI AS STRATEGIC CAMOUFLAGE 

13

Sri Lankan experts also share Pakistan’s concerns that the BRI will negatively impact the sovereignty of their country. They point out that a significant portion of investment and funding in BRI-tied projects in Sri
Lanka comes from Chinese public entities, and Sri Lanka’s inability to
repay in a timely manner and the resulting debt burden can lead to weaker
negotiating strength and a loss of sovereignty. Sri Lanka’s worries have
taken material form in China’s takeover of the troubled Hambantota Port.
Whether Hambantota will remain the only case of a loss of sovereignty
arising from high debt-to-equity swap agreements or whether more such
arrangements will follow is the worrying question confronting Sri Lankan
authorities.38
The debt burden of Sri Lanka and Pakistan is not different from China’s
financial and economic engagement with other developing world countries. For instance, at the end of 2016, China accounted for 21% of the
combined external debt stock of low- and middle-income countries.39

Additionally, India’s concerns related to China’s pursuit of naval base facilities in Sri Lanka and Pakistan are not new. Chinese control of Hambantota
Port and Gwadar Port only confirmed India’s fears and the fears of the
United States, that China will use its new-found economic leverage to
acquire strategic control in the Indian Ocean region and beyond.
It can be argued that the debt burden of these countries is mainly due
to the mismanagement of their own economy by their own respective
governments for various periods. Furthermore, the majority of Sri Lanka’s
debt burden is not even with China. “According to the 2017 Annual
Report of the Central Bank of Sri Lanka, the country’s total external debt
was $ 51.824 billion, among which Chinese loans constituted about 10.6%
or $ 5.5 billion. Also, according to Sri Lanka’s Finance Ministry Annual
Report 2017, market borrowings mainly of sovereign bonds accounted
for 39% of the country’s external debt. Loans owed to the Asian
Development Bank (ADB) were 14%, Japan 12%, the World Bank 11%,
China 10%, and India 3%.”40 However, China’s use of debt as strategic
leverage has been more significant; China used its debt leverage with Sri
Lanka to acquire a strategic port. China’s action meant a geopolitical
threat to India and the interests of the United States in the region.
For China, in addition to Pakistan and Sri Lanka, Nepal is one of the
most strategically located South Asian countries. Due to its location,
Nepal has an indirect and direct impact on China’s internal and external
security. Since the announcement of the BRI, as with Pakistan and Sri
Lanka, the label of BRI was attached to China’s engagements with Nepal.


14 

S. THALIYAKKATTIL

Chinese engagement using the BRI framework in Nepal has also exacerbated the security concerns and worries in the region. Although Chinese

engagement with Nepal has attracted less media attention than the port
infrastructure in Sri Lanka and Pakistan, because of its proximity to strategic regions of Tibet and the long borders it share with both India and
China, Nepal is one of the pivotal states in which the power struggle
between China, on the one hand, and India and the West, on the other
hand, will play out. Thus, it is worthwhile to take a detailed look into
Chinese engagement with Nepal and its position in relation to India
and the West.
The Tibetan autonomous region is adjacent to the Chinese provinces of
Xinjiang, Qinghai, Sichuan, and Yunnan. Tibet also shares borders with
South Asian countries such as India, Nepal, Myanmar, and Bhutan. In the
BRI of China, Tibet has a significant role in connecting Chinese interior
provinces with South Asian countries. With the progress of Chinese connectivity initiatives, Tibet can also act as a province linking it to South
Asia, Central Asia, and Europe. Among its international borders, Tibet’s
borders with Nepal are its most important border from the perspective of
Tibet’s international trade and internal security.41
Indicating Tibet’s close linkages with Nepal, Tibet’s foreign trade fell
for two consecutive years following the Nepal earthquake in 2015.42 The
opening of the China-Nepal highway in 1965 allowed the Zhangmu port
of entry on the Nepal-China border to carry nearly 90% of Tibet’s foreign
trade until China’s reform and opening up. Because the 2015 earthquake
in Nepal, the Zhangmu port of entry is temporarily closed, and the trade
through this port of entry has yet to be normalised. Although trade
between Nepal and Tibet has been adversely affected, Nepal is still the
largest trading partner of Tibet. For instance, in the first 11  months of
2017, the total value of Tibet’s trade with Nepal was 2.15 billion yuan, a
decrease of 23.9%. Nepal still accounts for 39.1% of the total foreign trade
value of Tibet, a decline of 20.3%.43
Since the announcement of the BRI, China and Nepal have been taking
initiatives to increase the economic integration between Nepal and the
Tibet region. For instance, on May 9, 2017, Chinese Minister of

Commerce Zhong Shan and Nepalese Vice Premier and Minister of
Finance Krishna Bahadur Mahara officially signed the MOU on
constructing the China-Nepal Cross-border Economic Cooperation
­
Zone.44 Trade and tourism between Nepal and China will be boosted once
the Rasuwagadhi-Kerung (Geelong Port) border crossing is upgraded


1  INTRODUCTION: THE BRI AS STRATEGIC CAMOUFLAGE 

15

into an international border point. Following the closure of the Zhangmu
border point, Geelong Port is the only operating trade point between the
two countries. The upgrading of this border point into international status
will also help in boosting tourism because Nepali tourist companies can
sell combined tour packages of Tibet and Nepal to international tourists.45
China is undertaking road and railway linking projects with Nepal.
Although there is road connectivity between Nepal and China, the railway
connectivity is still in the planning stages. China is not only constructing
physical infrastructure, it is also focused on data linking with Nepal and
the South Asian region. On January 12, 2018, the Nepal-China cross-­
border optical fibre link came into commercial operation. Two state-­
owned telecommunication companies from Nepal and China—Nepal
Telecom and China Telecom—established the linkage, providing Nepal
with an alternative route for receiving Internet services through China
from major Internet hubs, including Hong Kong. According to the chief
representative of China Telecom, Wang Yonglin, the Nepal-China cross-­
border optical fibre link “…is the shortest route for Nepal to get Internet
service,” adding that the route could also act as a gateway for Nepal to

reach Central Asia, Northeast Asia, and the United States.46
With an estimated total investment of 1.54 billion US dollars, China is
also building a cloud storage centre in Lhasa, the capital of the Tibet
Autonomous Region, to service investment and trade between Chinese
companies and their counterparts in South Asia. It is expected to start
operation by the end of 2018. According to Wang Jun, the chief engineer
of Ningsuan Technologies, the investor and operator of the centre, “the
center will mainly process data for Chinese companies engaged in investment and trade in Nepal, India and other South Asian countries, where
big data service fees are high.”47
China is linking Nepal with the Tibet region to convert it into a bridge
that will facilitate establishing and servicing industries in adjunct South
Asian regions. It will contribute to the economic development and urbanisation of the Tibet region and increase the population settlement in the
vast regions of thinly populated Tibet.
For China, the objective of the connectivity initiatives in Nepal is not Nepal
in itself; the target of Chinese connectivity initiatives is to connect the Indian
market through Nepal. This Chinese objective is not hidden, and Chinese
officials have clearly articulated it in many forums and meetings between
Chinese leaders and Nepali leaders. For instance, in September 2017, at a
level meeting between
joint press conference after a bilateral delegation-­


16 

S. THALIYAKKATTIL

Nepalese Deputy Prime Minister and Foreign Minister Krishna Bahadur
Mahara and Chinese Foreign Minister Wang Yi, the Chinese foreign minister stated China’s intention to make Nepal a bridge and link between the
two emerging economies of China and India. Chinese Foreign Minister
Wang Yi said that “China looks forward to gradually creating the conditions to explore and construct the China-­Nepal-­India economic corridor,

and jointly promote the Himalayan region to a new high ground for Asian
development.”48 In the context of India’s suspicions and worries about
the BRI, the Chinese aspirations to open an economic corridor between
Nepal and India will also add to Indian fears of encirclement. The profitability of linking Nepal through difficult land routes via the Tibet region
will also come under scrutiny. Considering the high transportation costs
expected to incur by the Tibet-­Nepal transportation corridors, the IndiaNepal economic corridor, proposed as a linking corridor of the ChinaNepal transportation corridor, will also be viewed as another strategic
infrastructure that will “benefit” China.
Tibet’s security has always been the most important interest of China in
Nepal. From a security perspective, China wants to remove any support
for the Tibetan government in exile; China also wants to restrict and prevent the flow of Tibetan refugees to Nepal. With the increase in Chinese
economic engagements with Nepal, successive governments in Nepal are
more sensitive to the Chinese government’s aspirations. This can be
gauged from Nepal government’s official reiteration that Nepal will not
allow any powers to use its territory against China.49 China has been successful in restricting Tibetan migration to Nepal. The influx of Tibetan
refugees has been severely restricted, with the once average of 2000 immigrants a year dropping to a low figure of 200 since the 2008 Uprising in
Tibet. The Nepali government has refused to give refugee status to
Tibetans, but the government of Nepal and the UN High Commissioner
for Refugees (UNHCR) in 1989 agreed to allow Tibetan refugees to cross
over to India. With the increase in the Chinese influence on Nepal, Nepal
is currently sidestepping this agreement and often detaining Tibetan refugees and sending them back to China.50
Nevertheless, China is still concerned about Western support for the
Tibetan cause and the Western role in Nepal supporting Tibetan refugees.
As an example of Western pressure on Nepal to support Tibetan refugees,
Chinese media reports refer to the United States House Appropriations
Committee Chairman Frank Wolf’s warning to the Nepali government.
According to Frank Wolf, “If the Nepalese government insists not to issue