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India in the Red

June 16, 2008

Raghu Dayal
The Business Standard (India)
June 15, 2008

New Delhi June 15 -- China is creating a ring of anti-Indian
influences in the South Asian neighbourhood that signifies strategic
encirclement and containment of India.

The Rise of Great Nations, a documentary telecast recently in China
elicited considerable interest among strategy thinkers across the
world. Close on its heels, Chinese President Hu Jintao showed up in
military fatigues to make an ominous advocacy of a powerful navy for
"sound preparations for military struggles" and for the strategic
objective of "comprehensive national power" extending and expanding
its global presence. China's urge to fly the national flag ever
farther afield is evident in its eagerness to demonstrate its rapid
"remarkable leap", in the pace and fervour with which it amasses
sophisticated weaponry, in the way it equips its 2.3 million strong
PLA, and in extending its presence to the Malacca Straits and the Indian Ocean.

The Chinese juggernaut has rolled on for a quarter of a century with
its incredible economic upsurge. With its GDP galloping to $1.7
trillion, it is already the world's sixth-largest economy and the
world's third-largest exporting country after Germany and the US. Its
foreign exchange reserves exceed $1 trillion. Its rapid economic
growth has been largely concentrated in the coastal areas. Its
long-range maritime interests have drawn it to look beyond being a
continental land power to a sea power as well. In tune with its
strategy of "oceanic offensive", its ambitions in the Indian Ocean
are described in the Chinese circles as "China's next frontier".

China is busy creating a new dynamism all along an axis that spans
the continent of Eurasia.  The Dark Continent has been wooed with aid
to African countries, where it is buying oil and gas, minerals and
materials for its bourgeoning industry. It has been busy developing
multimodal connectivity all along the borders and inside the
neighbouring countries as a strategic measure and to facilitate trade
flows.  Thus, rail and road links have sprouted along and inside
Pakistan, Myanmar, Vietnam and Nepal. Overtures have been made to
extend the Golmud-Lhasa rail line, the world's highest railway, to
Nepal. The Beijing-Lhasa rail link has serious strategic implications
vis-à-vis India's sparse infrastructure in its mountainous
territories all along the border in the North-East.

In some countries like Cambodia, China clearly aims to assure its
access to natural resources. It has offered loans for a deep-sea port
at Sihanoukville that would allow it a convenient delivery point for
its West Asia oil imports. Cambodia has granted China the rights to
one of its five offshore oilfields. China has also offered a $600
million credit to Cambodia for two major bridges near the capital
Phnom Penh that will link it to a network of roads, besides a
hydropower plant, and a fibre optic network to connect Cambodia's
telecom with that of Vietnam and Thailand.

China has been willing to take on complicated infrastructure projects
in distant areas. It has sunk more than a dozen concrete pylons
across the tributary of the mighty Mekong river, which will help knit
together a 2,000-km route from the southern Chinese city of Kunming
through Laos to the Cambodian port of Sihanoukville on the Gulf of
Thailand. China is linked to Vietnam by two rail lines north of
Hanoi. Singapore or Indonesia would be linked to the main Chinese
south-north trunk rail line, running from Shenzen to Erenhot on the
border with Mongolia, or the main Chinese east-west trunk line
stretching from the port of Lianyungang on China's coast to Druzhba
on the border with Kazakhstan.

China is fast establishing its presence in resource-rich Central
Asian Republics (CAR). With its border just 260 km from Kyrgyzstan by
road, China's growing commercial force is penetrating the remote
lands beyond its western border. The flow of Chinese goods here has
increased eight fold in the last five years to over $900 million and
continues to rise fast. Its strategic orientation is also reflected
in its linking the Xianjiang province with CAR. China's trade with
the eight-member Central Asia Regional Economic Co-operation (CAREC)
— Kyrgyzstan, Kazakhstan, Azerbaijan, Afghanistan, Mongolia,
Tajikistan and Uzbekistan, besides China — has surged from $1 billion
to $9.8 billion in the last decade.

China is developing an entire network of rail and highway
infrastructure at a very rapid pace. The Korean Peninsula West Trade
Corridor link already exists between the Busan port in South Korea
and Shenyang in China via Seoul, Pyongyang and Sinuiju on the South
Korean side and Dandong on the Chinese side. Some major projects have
been envisaged for the proposed Trans-Asian Railway (TAR) corridor,
in particular for a nearly 3,000-km standard (1,435 mm) gauge running
along the Caspian Sea with a north-south branch of 700 km line across
Turkmenistan to link up with the Iranian network. An important TAR
component, the ASEAN-promoted Singapore­Kunming Rail Line project, is
being avidly supported by China. It will provide China with a
valuable pan-Asian rail linkage.

A ring of anti-Indian influence in the South Asian neighbourhood that
China has been creating through military and economic assistance
signifies strategic encirclement and containment of India. A steady
erosion of India's presence in Southeast Asia with China's ascent
largely by dint of "hard power" is visible in Myanmar more than in
any other country in the region. The ongoing "Yunnanisation" of
northern Myanmar is evidence of it. China is busy building the
Irrawady Corridor, involving road, rail, river and energy transport
links between the Yunnan and Myanmar ports. In resource-rich Myanmar,
China is connecting the country's interior to its southern flank.
Beijing is currently working on a deep-water port on Myanmar's west
coast and has completed the site investigation for a 232-km
Lashik-Muse/Rueli rail line in Myanmar. It is busy promoting the
construction of the 120-km Kra Isthmus canal in Thailand that would
reduce the sea leg of oil tankers from the Middle East by about 1,000
km and avoid the hazardous Straits of Malacca. Likewise, China is
busy completing another strategic corridor on India's western flank.
Pakistan has access to Kashgar in China's Zianjiang province. It may
have further linkage through Khunjerab Pass and Karakoram Highway to Kashgar.

It appears a clear promoter-catalyst for an important rail project to
link the strategic Gwadar port promoted and aided by China and built
by Pakistan on its south-west coast as well as an 800-km railway line
proposed to connect Dalbandin on the Koh-i-Taftan (on Iranian
border)-Spezand-Quetta-Chaman (on Afghanistan border) rail line. The
proposal is to extend this rail link to Kashi in China, providing
China and Pakistan a direct connection with Central Asian Republics.
The rail link built on standard gauge will apparently suit China,
while India's broad gauge (1,676 mm) will no longer be compatible
with Pakistan's. It will thus isolate the Indian rail link.

These are developments of great significance for India. This is an
obvious Chinese infrastructure overload around India -- the great
feat of a railway in Tibet in the north with the intention to link
Nepal as well, a huge build-up of ports, roads and railways on
India's eastern and western flanks, and, of course, China's growing
presence in the Indian Ocean.
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