Top

Published in:

2018 | OriginalPaper | Chapter

8. The MSRI, China, and India: Economic Perspectives and Political Impressions

Author : Amitendu Palit

Published in: China’s Maritime Silk Road Initiative and South Asia

Publisher: Springer Singapore

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

China’s ambitious connectivity plan of linking Asia and Europe through an integrated network of land and sea routes has significant economic and strategic implications for India. The chapter examines these in regards to China’s MSRI. It specifically analyzes the MSRI as an economic corridor, along with variations in its economic geography through regions that have varying abilities to exploit emerging opportunities, and contemplates the related impressions of Indian business and government. The chapter reviews the likely impact of regional frameworks on the MSRI and the concomitant influences on Chinese and Indian business perceptions arising from political-economic complexities in trade rules. It further examines the MSRI in the context of China–India bilateral economic relations and identifies the conditions necessary for India’s successful integration into the connectivity plan.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

previous chapter The Maritime Silk Road and China–Maldives Relations

Available only for authorised users

People’s Republic of China, National Development Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce, “Vision and Actions on Jointly Building Silk Road Economic Belt and Twenty-First-Century Maritime Silk Road,” March 28, 2015, http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367.html.

Jean-Marc F. Blanchard, “Probing China’s Twenty-First-Century Maritime Silk Road Initiative (MSRI): An Examination of MSRI Narratives.” Geopolitics 22, no. 2 (2017): 246–268.

Hans-Peter Brunner, “What Is Economic Corridor Development and What Can It Achieve in Asia’s Subregions?” in ADB Working Paper Series on Regional Economic Integration (Manila: Asian Development Bank, 2013), http://www.adb.org/sites/default/files/publication/100110/reiwp-117-economic-corridor-development.pdf.

Examples of prominent economic corridors include the EU corridor from Latvia to Frankfurt and the Greater Mekong Sub-Region (GMS) transport corridor connecting China to Vietnam, Lao, Cambodia, Myanmar, and Thailand.

Kunal Sen, “Global Production Networks and Economic Corridors: Can They Be Drivers for South Asia’s Growth and Regional Integration?” In ADB South Asia Working Paper Series (Manila: Asian Development Bank, 2014), http://www.adb.org/sites/default/files/publication/152708/south-asia-wp-033.pdf.

See Jean-Marc F. Blanchard’s introduction to this volume and Blanchard, “Probing China’s Twenty-First-Century Maritime Silk Road Initiative (MSRI).”

Both East Asia and Europe have higher shares of intraregional trade in their total trades than North America—26 percent—while Southeast Asia has an almost identical share.

Corridors tend to disperse benefits more widely in regions that are economically more cohesive as opposed to those where benefits are usually localized (Brunner, “What Is Economic Corridor Development and What Can It Achieve in Asia’s Subregions?”).

Annex 1 compiles logistics performances of countries either directly connected to or in relatively close proximity to the MSRI.

India improved its position by 16 places in the World Economic Forum’s Global Competitiveness Index (2015–16) to 55 from a previous 71 (World Economic Forum, “Global Competitiveness Report 2015–2016,” India, http://reports.weforum.org/global-competitiveness-report-2015-2016/economies/#economy=IND). Its “Doing Business” rank also improved four places to 130 in 2016 from 134 in 2015. World Bank, “Doing Business” rankings, http://www.doingbusiness.org/data/exploreeconomies/india.

Republic of India, Press Information Bureau, “Sagarmala: Concept and Implementation Towards Blue Revolution,” March 25, 2015, http://pib.nic.in/newsite/PrintRelease.aspx?relid=117691.

“India Private Ports Grab Market Share from Government-Owned Rivals,” Joc.com, January 5, 2015, http://www.joc.com/port-news/asian-ports/port-nhava-sheva/india-private-ports-grab-market-share-government-owned-rivals_20150105.html.

P. Manoj, “Mundra-Guangzhou Pact May Pave Way for Chinese Investments In Indian Ports,” Live Mint, May 22, 2015, http://www.livemint.com/Opinion/lNKkA24l1SfRNMjaKPpSYP/MundraGuangzhou-pact-may-pave-way-for-Chinese-investments-i.html.

Geethanjali Nataraj, “Why India Should Join China’s New Maritime Silk Road,” The Diplomat, July 3, 2015, http://thediplomat.com/2015/07/why-india-should-join-chinas-new-maritime-silk-road.

See Jean-Marc F. Blanchard’s introduction to this volume and Blanchard, “Probing China’s Twenty-First-Century Maritime Silk Road Initiative (MSRI).”

The Mekong–Ganga Cooperation (MGC) includes India, Cambodia, Lao, Myanmar, Thailand, and Vietnam. It began in 2000 in order to facilitate greater cooperation between the river basins of Ganga and Mekong.

The WTO defines the Rules of Origin (ROOs) as “criteria needed to determine the national source of a product.” World Trade Organization, “Technical Information on Rules of Origin,” https://www.wto.org/english/tratop_e/roi_e/roi_info_e.htm.

ROOs also feature in the bilateral FTAs India has with other countries in the MSRI geographical area (e.g., Singapore, Malaysia, Thailand, Sri Lanka). The India–ASEAN agreement is more significant in scope and is discussed here as an illustrative example.

Association of Southeast Asian Nations, “Agreement on Trade in Goods under the Framework Agreement on Comprehensive Economic Cooperation between The Association Of South East Asian Nations and the Republic of India,” Rule 8, “Direct Consignment,” 35, http://www.asean.org/wp-content/uploads/images/archive/22677.pdf.

The TPP is a mega-RTA negotiated by Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the USA. The agreement is awaiting legislative ratification by members. The USA withdrew from the TPP in January 2017.

Amitendu Palit, The Trans-Pacific Partnership, China and India (Oxon and New York: Routledge, 2014).

“Full Text of BBIN Agreement on Motor Vehicles,” Nepal Foreign Affairs, http://nepalforeignaffairs.com/bbin-agreement-on-motor-vehicles-agreement.

“India for Greater Transport Connectivity with ASEAN,” The New Indian Express, August 25, 2014, http://www.newindianexpress.com/nation/India-for-Greater-Transport-Connectivity-with-ASEAN-Sushma/2014/08/25/article2397830.ece. See also Prabir De, “ASEAN-India Connectivity: An Indian Perspective,” in ASEAN-India Connectivity: The Comprehensive Asia Development Plan, Phase II, ERIA Research Project Report 2010–7, edited by Fukunari Kimura and So Umezaki (Jakarta: ERIA, 2011), 95–150, http://www.eria.org/CHAPTER%203%20%20ASEAN%20-%20India%20Connectivity%20An%20Indian%20Perspective.pdf.

BCIM links Kolkata in the eastern Indian state of West Bengal to Kunming, the capital of Yunnan province in Western China, through Dhaka and Mandalay in Bangladesh and Myanmar, A major hurdle for the project is in constructing the land corridor through the northeast Indian state of Arunachal Pradesh, over which China and India have a territorial dispute. “China-India Fast-Track BCIM Corridor Project,” The Hindu, June 26, 2015, http://www.thehindu.com/news/national/china-india-fasttrack-bcim-economic-corridor-project/article7355496.ece.

Chinese officials pointed to the importance of drawing India’s northeastern state of Mizoram and the Kaladan Project into the BCIM in order to make it a complete structure. Ibid.

Republic of India, Department of Commerce, Export Import Data Bank, http://commerce.nic.in/eidb/iecnttopn.asp.

Alicia Garcia Herrero, “China’s Outward Foreign Direct Investment,” Bruegel, Blog Post, June 28, 2015, http://bruegel.org/2015/06/chinas-outward-foreign-direct-investment.

“Investment the Way to Reduce the India-China Trust Deficit,” The Wire, May 16, 2015, http://thewire.in/2015/05/16/investment-the-way-forward-to-reduce-india-china-trust-deficit-1871/.

The Samy Group and Clint Group from China have invested in manufacturing renewable energy and solar power equipment in India, while the real estate group Dalian Wanda plans to expand beyond its current investment in Navi Mumbai in India’s western state of Maharashtra to industrial townships and real estate projects in other major Indian states such as Haryana, Andhra Pradesh, Gujarat, and Delhi.

On the former, see “China Has a Lot to Offer to Indian Railways: Suresh Prabhu, Railway Minister,” Indian Express, May 17, 2015, http://indianexpress.com/article/cities/ahmedabad/china-has-a-lot-to-offer-to-indian-railways-suresh-prabhu-railway-minister. On the latter, see “Chinese Smartphone Makers Fall in Love with PM Modi’s ‘Make in India,’” Sify News, October 12, 2015, http://www.sify.com/news/chinese-smartphone-makers-fall-in-love-with-pm-modis-make-in-india--news-business-pkmqnMiigdehd.html.

Mega-ships have cargo volumes of at least 13,300 TEU. For more details, see Figure 4.2, Chapter 4 of International Transport Forum, “The Impact of Mega-Ships,” International Transport Forum (ITF)–OECD, 2015, https://www.itf-oecd.org/impact-mega-ships.

Asia–North Europe and Asia–Mediterranean were the second and third busiest maritime routes, after Asia–North America, in 2013. World Shipping Council, “Trade Routes,” http://www.worldshipping.org/about-the-industry/global-trade/trade-routes.

The 100-km Kra Isthmus canal would enable ships to bypass the Malacca Strait and cut through the South China Sea into the Andaman Sea and Bay of Bengal, reducing the total distance covered by around 1200 km and journey time by two–five days. There are reports of this being conceived as a part of MSRI though there has been no official confirmation. “Will China and Thailand’s Kra Isthmus Canal Agreement Sink Singapore?” The Establishment Post, May 21, 2015, http://www.establishmentpost.com/will-china-thailands-kra-isthmus-canal-agreement-sink-singapore/.

Xinhua’s map of the New Silk Road outlines its clearest geography till now. “New Silk Road Project,” Great Silk Road, October 5, 2015, http://greatsilkroad.com/new-silk-road/new-silk-road-project.

“Kolkata Port Adjudged Major Port of the Year,” The Times of India, August 26, 2015, http://timesofindia.indiatimes.com/city/kolkata/Kolkata-Port-adjudged-Major-Port-of-the-Year/articleshow/48687327.cms.

“Colombo Breaks Through as South Asia’s Next Big Trans-Shipment Port,” Joc.com, October 20, 2015, http://www.joc.com/port-news/asian-ports/port-colombo/colombo-breaks-through-south-asia’s-next-big-transshipment-port_20151020.html.

“India Needs to Be Part of China-Pakistan Economic Corridor,” The Economic Times, October 10, 2015, http://economictimes.indiatimes.com/news/politics-and-nation/india-needs-to-be-part-of-china-pakistan-economic-corridor/articleshow/49298727.cms.

Anasua Basu Ray Chaudhary, Pratnashree Basu, and Mihir Bhonsale, Driving across the South Asian Borders: The Motor Vehicle Agreement between Bhutan, Bangladesh, India and Nepal (Delhi: Observer Research Foundation, 2015). The SAARC members include Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.

The ASSOCHAM study estimates shipping cost of a container from India at around US$1200 compared with US$600 from China and US$400 from Singapore. See “WTO pact or not; India has to catch up fast on trade facilitation; costs are prohibitive: ASSOCHAM,” Assocham.org , August 26, 2014, http://assocham.org/newsdetail.php?id=4657. The ASSOCHAM study vindicates similar conclusions drawn by other agencies. Organization for Economic Cooperation and Development, “The Costs and Benefits of Trade Facilitation,” Policy Brief, OECD Observer, October 2005, http://www.oecd.org/trade/facilitation/35459690.pdf.

“Government Relaxes Cabotage Law for Special Vessels Like Ro-Ro,” The Times of India, September 15, 2015, http://timesofindia.indiatimes.com/india/Govt-relaxes-cabotage-law-for-special-vessels-like-Ro-Ro/articleshow/48964834.cms.

“One Belt, One Road Not International Venture: India,” Deccan Herald, July 21, 2015, http://www.deccanherald.com/content/490656/one-belt-one-road-not.html.

Amitendu Palit, “India’s Economic and Strategic Perceptions of China’s Maritime Silk Road Initiative,” Geopolitics 22, no. 2 (2017): 292–309.

“China Should Detail Maritime Silk Road Projects to Get India’s Support: Chinese Think Tank,” The Economic Times, July 17, 2015, http://economictimes.indiatimes.com/news/defence/china-should-detail-maritime-silk-road-projects-to-get-indias-support-chinese-think-tank/articleshow/48110690.cms.

Akilesh Pillalamarri, “Project Mausam: India’s Answer to China’s ‘Maritime Silk Road,’” The Diplomat, September 18, 2014, http://thediplomat.com/2014/09/project-mausam-indias-answer-to-chinas-maritime-silk-road.

“India Using Strategic Projects as Bargaining Chip,” NDTV, April 10, 2015, http://www.ndtv.com/india-news/india-using-strategic-projects-as-bargaining-chip-says-chinese-think-tank-753953.

“South China Sea Tensions Torpedo Asia Defense Chiefs Statement,” Channel News Asia (CNA), November 4, 2015, http://www.channelnewsasia.com/news/asiapacific/south-china-sea-tensions/2237348.html.

Association of Southeast Asian Nations, “Agreement on Trade in Goods under the Framework Agreement on Comprehensive Economic Cooperation between The Association Of South East Asian Nations and the Republic of India,” Rule 8, “Direct Consignment,” http://www.asean.org/wp-content/uploads/images/archive/22677.pdf.

Basu Ray Chaudhary, Anasua, Pratnashree Basu, and Mihir Bhonsale. Driving across the South Asian Borders: The Motor Vehicle Agreement between Bhutan, Bangladesh, India and Nepal. Delhi: Observer Research Foundation, 2015.

Blanchard, Jean-Marc F. “Probing China’s Twenty-First-Century Maritime Silk Road Initiative (MSRI): An Examination of MSRI Narratives.” Geopolitics 22, no. 2 (2017): 246–68.

Brunner, Hans-Peter. “What Is Economic Corridor Development and What Can It Achieve in Asia’s Subregions?” In ADB Working Paper Series on Regional Economic Integration. Manila: Asian Development Bank, 2013. http://www.adb.org/sites/default/files/publication/100110/reiwp-117-economic-corridor-development.pdf.

“China-India fast-track BCIM Corridor Project.” The Hindu, June 26, 2015. http://www.thehindu.com/news/national/china-india-fasttrack-bcim-economic-corridor-project/article7355496.ece.

“China has a lot to offer to Indian Railways: Suresh Prabhu, Railway Minister.” Indian Express, May 17, 2015. http://indianexpress.com/article/cities/ahmedabad/china-has-a-lot-to-offer-to-indian-railways-suresh-prabhu-railway-minister.

“China should detail Maritime Silk Road projects to get India’s support: Chinese think tank.” The Economic Times, July 17, 2015. http://economictimes.indiatimes.com/news/defence/china-should-detail-maritime-silk-road-projects-to-get-indias-support-chinese-think-tank/articleshow/48110690.cms.

“Chinese Smartphone makers fall in love with PM Modi’s ‘Make in India.’” Sify News, October 12, 2015. http://www.sify.com/news/chinese-smartphone-makers-fall-in-love-with-pm-modis-make-in-india--news-business-pkmqnMiigdehd.html.

“Colombo breaks through as South Asia’s next big trans-shipment port.” Joc.com, October 20, 2015. http://www.joc.com/port-news/asian-ports/port-colombo/colombo-breaks-through-south-asia’s-next-big-transshipment-port_20151020.html.

De, Prabir. “ASEAN-India Connectivity: An Indian Perspective.” In ASEAN-India Connectivity: The Comprehensive Asia Development Plan, Phase II, ERIA Research Project Report 2010-7, edited by Fukunari Kimura and So Umezaki, 95–150. Jakarta: ERIA, 2011. http://www.eria.org/CHAPTER%203%20%20ASEAN%20-%20India%20Connectivity%20An%20Indian%20Perspective.pdf.

“Full Text of BBIN Agreement on Motor Vehicles.” Nepal Foreign Affairs. http://nepalforeignaffairs.com/bbin-agreement-on-motor-vehicles-agreement/.

“Government relaxes cabotage law for special vessels like Ro-Ro.” The Times of India, September 15, 2015. http://timesofindia.indiatimes.com/india/Govt-relaxes-cabotage-law-for-special-vessels-like-Ro-Ro/articleshow/48964834.cms.

Herrero, Alicia Garcia. “China’s Outward Foreign Direct Investment.” Bruegel, Blog Post, 28 June, 2015. http://bruegel.org/2015/06/chinas-outward-foreign-direct-investment.

“India for Greater Transport Connectivity with ASEAN.” The New Indian Express, August 25, 2014. http://www.newindianexpress.com/nation/India-for-Greater-Transport-Connectivity-with-ASEAN-Sushma/2014/08/25/article2397830.ece.

“India Using Strategic Projects as Bargaining Chip.” NDTV, April 10, 2015. http://www.ndtv.com/india-news/india-using-strategic-projects-as-bargaining-chip-says-chinese-think-tank-753953.

“India needs to be part of China-Pakistan Economic Corridor.” The Economic Times, October 10, 2015. http://economictimes.indiatimes.com/news/politics-and-nation/india-needs-to-be-part-of-china-pakistan-economic-corridor/articleshow/49298727.cms.

“India private ports grab market share from government-owned rivals.” Joc.com, January 05, 2015. http://www.joc.com/port-news/asian-ports/port-nhava-sheva/india-private-ports-grab-market-share-government-owned-rivals_20150105.html.

“Investment the Way to Reduce the India-China Trust Deficit.” The Wire, May 16, 2015. http://thewire.in/2015/05/16/investment-the-way-forward-to-reduce-india-china-trust-deficit-1871/.

International Transport Forum (ITF). “The Impact of Mega-Ships.” International Transport Forum (ITF)–OECD, 2015. https://www.itf-oecd.org/impact-mega-ships.

“Kolkata Port Adjudged Major Port of the Year.” The Times of India, August 26, 2015. http://timesofindia.indiatimes.com/city/kolkata/Kolkata-Port-adjudged-Major-Port-of-the-Year/articleshow/48687327.cms.

Manoj, P. “Mundra-Guangzhou pact may pave way for Chinese investments in Indian ports.” Live Mint, May 22, 2015. http://www.livemint.com/Opinion/lNKkA24l1SfRNMjaKPpSYP/MundraGuangzhou-pact-may-pave-way-for-Chinese-investments-i.html.

Nataraj, Geethanjali. “Why India Should Join China’s New Maritime Silk Road.” The Diplomat, July 3, 2015. http://thediplomat.com/2015/07/why-india-should-join-chinas-new-maritime-silk-road.

“New Silk Road Project.” Great Silk Road, October 5, 2015. http://greatsilkroad.com/new-silk-road/new-silk-road-project/.

OECD. “The Costs and Benefits of Trade Facilitation.” Policy Brief, OECD Observer, 2005. http://www.oecd.org/trade/facilitation/35459690.pdf.

“One Belt, One Road not international venture: India.” Deccan Herald, July 21, 2015. http://www.deccanherald.com/content/490656/one-belt-one-road-not.html.

Palit, Amitendu. The Trans-Pacific Partnership, China and India. Oxon and New York: Routledge, 2014.

Palit, Amitendu. “India’s Economic and Strategic Perceptions of China’s Maritime Silk Road Initiative.” Geopolitics 22, no. 2 (2017): 292–309.CrossRef

People’s Republic of China, National Development Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce. “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road.” March 28, 2015. http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367.html.

Pillalamarri, Akilesh, “Project Mausam: India’s Answer to China’s ‘Maritime Silk Road.’” The Diplomat, September 18, 2014. http://thediplomat.com/2014/09/project-mausam-indias-answer-to-chinas-maritime-silk-road.

Republic of India, Department of Commerce, Export Import Data Bank, http://commerce.nic.in/eidb/iecnttopn.asp.

Republic of India, Press Information Bureau. “Sagarmala: Concept and Implementation Towards Blue Revolution.” March 25, 2015. http://pib.nic.in/newsite/PrintRelease.aspx?relid=117691.

Sen, Kunal. “Global Production Networks and Economic Corridors: Can They Be Drivers for South Asia’s Growth and Regional Integration?” In ADB South Asia Working Paper Series. Manila: Asian Development Bank, 2014. http://www.adb.org/sites/default/files/publication/152708/south-asia-wp-033.pdf.

“South China Sea tensions torpedo Asia Defense chiefs statement.” Channel News Asia (CNA), November 4, 2015. http://www.channelnewsasia.com/news/asiapacific/south-china-sea-tensions/2237348.html.

“Will China and Thailand’s Kra Isthmus Canal Agreement Sink Singapore?” The Establishment Post, May 21, 2015. http://www.establishmentpost.com/will-china-thailands-kra-isthmus-canal-agreement-sink-singapore/.

World Bank, “Doing Business” rankings, http://www.doingbusiness.org/data/exploreeconomies/india.

World Economic Forum, Global Competitiveness Report 2015-2016, India, http://reports.weforum.org/global-competitiveness-report-2015-2016/economies/#economy=IND.

World Shipping Council, “Trade Routes,” http://www.worldshipping.org/about-the-industry/global-trade/trade-routes.

World Trade Organization, “Technical Information on Rules of Origin,” https://www.wto.org/english/tratop_e/roi_e/roi_info_e.htm.

“WTO pact or not; India has to catch up fast on trade facilitation; costs are prohibitive: ASSOCHAM.” Assocham.org, August 26, 2014. http://assocham.org/newsdetail.php?id=4657.

Title: The MSRI, China, and India: Economic Perspectives and Political Impressions
Author: Amitendu Palit
Publisher: Springer Singapore
Book: China’s Maritime Silk Road Initiative and South Asia
Print ISBN: 978-981-10-5238-5

Electronic ISBN: 978-981-10-5239-2

Copyright Year: 2018
DOI: https://doi.org/10.1007/978-981-10-5239-2_8