China establishing strong port trade presence in South Asia
Sri Lanka — For years, ships from other countries, laden with oil, machinery, clothes and cargo, sped past this small town near India as part of the world’s brisk trade with China. Now, China is investing millions to turn this fishing hamlet into a booming new port, furthering an ambitious trading strategy in South Asia that is reshaping the region and forcing India to rethink relations with its neighbors. As trade in the region grows more lucrative, China has been developing port facilities in Pakistan, Bangladesh and Myanmar, and it is planning to build railroad lines in Nepal. These projects, analysts say, are part of a concerted effort by Chinese leaders and companies to open and expand markets for their goods and services in a part of Asia that has lagged behind the rest of the continent in trade and economic development.
But these initiatives are irking India, whose government worries that China is expanding its sphere of regional influence by surrounding India with a “string of pearls” that could eventually undermine India’s pre-eminence and potentially rise to an economic and security threat. “There is a method in the madness in terms of where they are locating their ports and staging points,” Kanwal Sibal, a former Indian foreign secretary who is now a member of the government’s National Security Advisory Board, said of China. “This kind of effort is aimed at counterbalancing and undermining India’s natural influence in these areas.”
India and China, the world’s two fastest-growing economies, have a history of tense relations. They share a contested Himalayan border over which they fought a war in 1962. India has given shelter to the Dalai Lama, who fled Tibet as China exerted control over it. And China has close military ties with Pakistan, with which India has fought three wars.
But the two countries also do an increasingly booming business with each other. China recently became India’s largest trading partner, and both have worked together to advance similar positions in global trade and climate change negotiations. Chinese officials deny ulterior motives for their projects in South Asia. And top Indian leaders have tried to play down talk of a rivalry with China, saying there is enough room in the world for both economies to rise simultaneously.
As recently as the 1990s, China’s and India’s trade with four South Asian nations — Sri Lanka, Bangladesh, Nepal and Pakistan — was roughly equal. But over the last decade, China has outpaced India in deepening ties. For China, these countries provide both new markets and alternative routes to the Indian Ocean, which its ships now reach through a narrow channel between Indonesia and Malaysia known as the Strait of Malacca. India, for its part, needs to improve economic ties with its neighbors to broaden its growth and to help foster peace in the region. Some of the shift in trade toward China comes from… Read more here.
Source: New York Times, 16 Feb 2010 Photo: AP/G. Amarasinghe
