Depth report

　　

Of all Chinese investments under the “Belt and Road” Initiative (BRI), investment in South Asia may trigger the most serious geopolitical tensions, because India has been surrounded by countries that have received huge investments from China, and China is India’s largest investment in the region. Rich competitors.

    Beijing's investment in South Asia exceeds 100 billion U.S. dollars. Pakistan and Bangladesh are the two largest recipients of funds, but regional analysts say that what China seeks to accomplish in these two countries is different. These differences show the broader duality of the Belt and Road Initiative. In Pakistan, China has pledged to invest US$62 billion to upgrade the infrastructure of this southern neighboring country, ostensibly to obtain a trade route to Gwadar Port on the southern coast of Pakistan. However, some people believe that because these infrastructure projects are unlikely to bring benefits, and Gwadar Port is unlikely to be cheaper than other sea routes, China is actually using the funds to help a troubled and useful ally.

    However, analysts say that in Bangladesh, China is making strategic investments in a thriving economy-these investments will advance China's domestic policy goals and may also bring stable returns. The China-Pakistan Economic Corridor (CPEC) is one of the largest and most important projects under the "Belt and Road" initiative. Chinese funds have been used to build 21 power plants, a port and international airport in Gwadar, and several highways and railway lines.

    But there are concerns about the loan terms of most funds. Pakistan’s foreign exchange reserves are rapidly depleting, partly because of the debt repayment of the China-Pakistan Economic Corridor. According to reports, in the power plant project, Pakistan has multiple repayments overdue.

    Today, Imran Khan’s new government is reviewing the terms of the China-Pakistan Economic Corridor project. Pakistan's Minister of Commerce, Abdul Razak Dawood (Abdul Razak Dawood) said he will review all the projects under the plan. Even if Islamabad concludes that it is satisfied with the agreement reached, it may be forced to re-plan the project if the International Monetary Fund (IMF) requires it to do so as a condition of a potential rescue plan of up to $12 billion if.

    At the same time, Bangladesh is not so dependent on Chinese funds. Although the Chinese government has pledged to invest 31 billion U.S. dollars in infrastructure projects in Bangladesh, in 2017, China accounted for only 10% of Bangladesh's foreign investment, and in Pakistan, Chinese investment accounted for 60%. China is also making more strategic investments in Bangladesh's economy. The Shanghai and Shenzhen stock exchanges have jointly spent US$119 million to beat the National Stock Exchange offer to acquire a 25% stake in the Dhaka Stock Exchange.

    The Indian government, which regards Bangladesh as its sphere of influence, is watching with anxiety the increasing investment from China. Indian ministers are particularly worried about what they saw in Sri Lanka: China has now taken over control of the Hambantota port because the government cannot repay the construction funds borrowed from borrowers backed by the Chinese government.