GREAT GAME OF TRADE CORRIDORS BETWEEN ASIAN GIANTS

SUPREMACY  BATTLE THROUGH TRADE & TRADE CORRIDORS  BETWEEN TWO ASIAN GIANTS-- PUNCH AND PINCH OF -  OBOR & AAGC

In order to gain larger roles in global politics and to have control over other countries  ,it has now become necessary to first penetrate & control others  trade, which is the soul of twenty first century's international relations .China is in hurry to capture this  pivotal role from where it can dictate others   easily  . To days  concept of international trade means low cost , mass production , market for  products , low packing &  transportation cost e.t.c.

All powers like China, Russia, Japan, and India vie for strong political and economic position throughout the eastern realms of Eurasia where many less powerful countries caught in the middle of this tussle  .The cost of goods mainly depends mainly upon cost of labor and the cost of materials. It’s well known that China has a massive, inexpensive labor force. This, combined with today’s  low cost  & fast transportation of goods globally, results in , China being a central point  for supply of  comparative cheap goods , which are sent all over the world.

Though China’s labor market is cheap (compared to Europe or North America), even then Chinese producers are  under tremendous pressure due to continuous demand to further  decrease the cost , of their products , due to severe competitions . On the other hand  the cost of labor in China , now has also started showing upward trend .

To maintain their mass production and to retain its old market China will  continue have to sell their competitive products at same cheap cost   to world market . Keeping cost low for a longer period  is  a very difficult task because the factors related to cost i.e. labour charges , energy charges ,material cost , marketing cost ,, packaging , handling cost , transportation are either constant or  have an upward trend internationally  .Under these circumstances , to survive in the market , China need to reduce  one of the main factor which can controls & reduces the ultimate cost of the product i.e. TRANSPORTATION . The transportation cost can be controlled and reduced through shorter predefined Trade routes . So the first tool to capture the world market is to have safe & secured  Trade Routes which connects one continent to others through shorter routes.

Keeping  this in mind  China announced to the world that it was planning a mega project to revive the old Silk route for trading, with a corridors , for infrastructure, trade, energy and telecommunications .In the process China brought together leaders and officials of 130 countries, 68 of which China claimed had already signed Belt and Road Initiative (B&RI) project. Several participant countries sent their heads of state and others like Japan and the U.S., who aren’t part of the initiative, sent senior officials.

But India gave cold shoulder to this and did not sent anyone, even a local embassy officials. Indian Ministry of External Affairs issued instructions that anyone from think-tanks, business chambers, and other Ministries would have to take clearance if they were travelling for the B&RI Foru

Just hours before the forum was due to open in Beijing, the Indian Ministry of External affairs issued a comprehensive statement on its strong objections to the Chinese  B&RI .The ministry said their objections are because of : the corridor includes projects in land belonging to India , the projects could push smaller countries on the road into a crushing debt cycle, shall destroy the ecology and disrupt local communities , and agenda is also unclear . This clearly indicates India's   accusation that this is mainly enhancing its political influence, not just the hypes of networks.

All of India’s neighbours , with the exception of Bhutan, have become members of chinese B&RI . India’s concerns was been heightened by the growing presence of China in Nepal, Bangladesh, Sri Lanka and the Maldives.

India’s main objection is on the principle that the B&RI includes projects in the China-Pakistan Economic Corridor (CPEC) that are located in the Pakistan-occupied Kashmir’s Gilgit Baltistan, including the Diamer Bhasha Dam, 180-MW hydel power projects, and more expressways and economic zones along the Karakoram Highway built in the 1970s. Ever since the announcement of the CPEC in April 2015, India has raised those concerns . However, India didn’t clearly said  that  it would not join the B&RI, leaving small hope for speculation that later India may consider , if the Chinese were willing to discuss alternate option.  India made it clear earlier  that it couldn’t either join the project or even attend the forum with the B&RI map showing Gilgit Baltistan in Pakistan as part of a China-Pakistan Economic Corridor & OBOR joining Asia ,Central Asia ,& Europe.

India blamed that China is  not only been insensitive to its sovereignty, but has never fully explained its plan for the Belt and Road (formerly called One Belt One Road) initiative. China’s reply has been that none of the other countries in the project has complained about lack of transparency. Chinese and Indian officials have spoken about the project a few times, but India not satisfied .

China was very unhappy because of  India's snubbing its mega trans-continent corridor project  initiatives which exaggerated further  due to  New Delhi tie up with Tokyo  who is Beijing's arch rival .Both the countries are now pushing ahead with a development of a new corridor between Asia and Africa.

Ignoring Chinese sponsored epic project OBOR both countries i.e. India & Japan announced the Asia Africa Growth Corridor (AAGC ) days after China hosted with great show the One Belt One Road (OBOR) summit in Beijing. The venture is expected to get further impetus in September during the visit of Japanese Prime Minister Shinzo Abe.

India has been involved in Africa for many years, in trade as well as capacity-building activities. Japan, which has been working on infrastructure projects in Africa, can help with its advanced technology as well as funds for the AAGC. Japan is reportedly planning to commit $200 billion for the proposed growth corridor.

So,  the question is whether  AAGC is a counterbalance to OBOR? or clash of supremacy . Objectives of both are different. Long before OBOR, India and Japan were pushing and planning up AAGC as New Silk Road , though got delayed .

India, Russia, and Iran are also planning  together the north-south Transport Corridor, a multimodal route that goes from the west coast of India all the way to St.Petersburg, Russia.

India also has its connect in central Asia Policy . Indias Act East Initiative includes  an array of new road and rail projects that are extending throughout South and Southeast Asia, and seaport development projects at Chabahar in Iran , at Paira in Bangladesh , Trincomalee in Sri Lanka

China's engagement in Africa is extensive, while the India-Japan collaboration in Africa  is beginning to take shape. The AAGC shows that India and Japan desire to take their cooperation beyond the bilateral sphere . This would give challenge to China .

China's OBOR,  was proposed  in 2013, with an estimated $5 trillion . The  connectivity corridor spanning over 60 countries across Asia, the Middle East, Europe, and Africa. It is meant to be a revival of the ancient Silk Road trading route and is expected to comprise building of roads, bridges, gas pipelines, ports, railways and power plants, besides SEZs. 

On the other hand India and Japan had begun their dialogue on Africa in 2010, a continent in which both have much stake. The main objective of the  AAGC is to enhance growth and connectivity between Asia and Africa. According to the vision document, the corridor will focus on four areas: Development Cooperation Projects, Quality Infrastructure and Institutional Connectivity, Enhancing Skills, and People-to-People Partnership.

China is Africa's largest economic partner, with goods trade worth $188 billion in 2015 -- compared to $59 billion with India. There are around 10,000 Chinese firms in Africa, .

The proposed AAGC shall  integrate Africa, India and South Asia, Southeast Asia, East Asia and Oceania.

India's increased engagement with Africa comes in the backdrop of the third India-Africa Forum Summit held in New Delhi in October 2015 when all 54 African nations had sent their representatives. India has also made many high level visits to several African countries, as part of its outreach. India also held the AFDB annual meeting in Gandhinagar this May.