Is China heading for challenging the global economic order?

India’s refusal to endorse China’s Belt and Roads Initiative (BRI), including the China-Pakistan Economic Corridor (CPEC), at the Shanghai Cooperation Organisation (SCO) meeting in Quindao in China is reassuring and apt. It reinforces the impression that the country’s interests are not being sacrificed at the altar of Chinese browbeating.

Prime Minister Narendra Modi’s clear enunciation in his SCO speech that connectivity projects are India’s priority but such initiatives should respect another country’s sovereignty and territorial integrity was a reference to the China-Pak road that is slated to pass through a part of Pakistan-occupied Kashmir to which India makes legitimate claim. 

It is India’s strong reservations on Chinese-supported BRI and CPEC that had led to its boycott of the Belt and Road Forum in May 2017 which was attended by 29 heads of state and government. Much as India appreciates the SCO initiative and is an important part of it, it was necessary for New Delhi to make its reservations on this aspect absolutely clear.

That China’s initiatives could help India’s long-overdue integration with Eurasia that has remained physically inaccessible to India because of the conflict with Islamabad is a welcome development but the expression of reservations on CPEC was vital too. Likewise, the accent on terror at SCO was in conformity with India’s unequivocal stand on the issue.

That inherent in the China summit of eight nations, including China, Russia, India, Pakistan and the four Central Asian countries, is a challenge to the western G7 outfit which encompasses the US and Europe should not be India’s thrust. India must draw all the mileage from both blocs without being antagonistic towards either.

But one cannot help noticing that while the Asian grouping was a picture of convergence (except the Indian dissent on BRI), the western one was racked by dissension over US trade policy issues. In fact, US President Trump’s refusal to sign the final communiqué and his tongue-lashing at Canadian Prime Minister Trudeau made the forum look utterly fractious.

In the Qingdao Declaration, the BRI was the only point in which the names of approving countries were individually mentioned rather than clubbing all under “member-states.” This was in deference to India’s dissenting opinion which had a strong basis.

In his speech, Modi also mentioned Afghanistan and alluded to a common front against forces destabilising the nation. That passed muster despite the presence of the Pakistani delegation. He said it was ‘our responsibility’ that causes that threaten Afghan unity, sovereignty, integrity, diversity and democracy in the past be not repeated in an obvious reference to Pakistan.

Even as Chinese President Xi Jinping called for the “pursuit of cooperation for mutual benefit” on the final day of the SCO meeting, the G7 meeting in Canada ended in disarray, thanks to Trump’s role.
Despite disagreements between members of the eight-member SCO, the apparent harmony in which the summit took place stood in contrast with the G7 meeting in Canada at which Trump called host Justin Trudeau “dishonest” and “weak.”
Tensions had indeed been palpable even before the G7 Summit after Trump announced tariffs on steel and aluminium imports from Canada, Mexico and the European Union and withdrew from the Iran nuclear deal.

Without mentioning the US, Xi also made a plea for free trade, rejecting “selfish, short-sighted” policies and calling for the building of an “open global economy”. The current state of affairs makes one wonder whether China with its contrasting style with Trump is heading for challenging the international economic order as crafted by the Americans in yesteryears.

The Chinese are indeed on a roll under Xi. Not only have they gained a strategic advantage over India in building and supporting ports in maritime nations through which they hope to potentially control trade routes but by gaining access to key strategic grouping like SCO they have carved out a major advantage.

For India, there is indeed a challenge to leverage its strengths, to deftly deal with power blocs while drawing maximum benefits.