Why India-Japan’s Knock-Off Of Pakistan-China’s CPEC Is Doomed To Fail


India-Japan joint efforts to copy the idea of China-Pakistan Economic Corridor (CPEC) can be derailed due to economic impotence.

As India and Japan join hands to develop their own vision of a connectivity initiative – the Asia-Africa Growth Corridor (AAGC), dubbed as ‘India’s New Silk Road’ – New Delhi and Tokyo look over their shoulder to copy rivals Pakistan and China’s ambitious CPEC.

The announcement of AAGC was made by Indian Prime Minister Narendra Modi in May and came amid the active phase of CPEC implementation. While India and Japan insist their knock-off of CPEC is designed to integrate the economies of South, Southeast, and East Asia with Oceania and Africa, experts says the intentions behind the AAGC are to counter China and serve as a counterbalance to its ambitious joint project with Pakistan.

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India-Japan Making Their Own, Cheaper Version of CPEC

The development of AAGC comes amid a series of seemingly anti-China deals by Japan and India, the most prominent enemies of Beijing looking to counter its growing expansionism in the region. In late July, The Economic Times reported that India-Japan would sign a landmark maritime security pact during Japanese PM Shinzo Abe’s visit in September, something that will allow the two nations to contain China’s alleged expansionism appetites.

A few weeks ago, The Economic Times reported that a historic Indo-Japanese civil nuclear deal – signed in November last year – came into force, enabling Japan to export nuclear power plant technology from India as well as sponsor nuclear power plants in the nuclear-armed nation. The two nuclear-equipped countries signing the landmark deal prompted a furious response from Beijing.

The news comes as Indian and Chinese troops remain locked in the Sino-Indian standoff at the disputed Doklam plateau. With many experts warning that the standoff could spiral into a military confrontation between the two historic rivals, the growing India-Japan strategic partnership comes amid their shared fears of Beijing attempting to change the status quo along the Indo-Bhutan-China trijunction and maritime boundary in East China Sea in Japan’s territory.

But could the development of India-Japan strategic projects under the banner of AAGC help New Delhi and Tokyo counter China’s steadily expanding economic and political outreach in the region?

Why India and Japan’s AAGC Is Doomed to Fail

While India and Japan insist that the idea of AAGC is to create “a free and open Indo-Pacific region” by rediscovering older sea-routes and creating new sea corridors, China is concerned that the initiative is nothing but a cheap knock-off project designed to counterbalance or even disrupt its game-changer Belt and Road initiative.

True, India-Japan’s AAGC is a cheaper alternative to China’s Belt and Road initiative or even CPEC, but experts still doubt whether New Delhi and Tokyo could pull if off.

India and Japan’s ambitions to become the world’s prominent epicenters of economic growth could be derailed and doomed to fail due to India’s chronic economic slowdown, with “the makers of India’s monetary policy cutting interest rates” recently and “rates of job shedding,” according to The Economic Times.

Japan – the seeming driving force behind the AAGC initiative due to being the world’s third-largest economy – could expect a substantial slowdown in economic momentum due to the mounting political crisis in the nation. CNBC reported late last month that anti-government protests are on the rise in Japan, with PM Abe – who drowns in school scandals – having his lowest approval rating ever, under 30%.

India-Japan AAGC Could Never Beat China’s Belt and Road and CPEC

One can argue the ongoing political drama in Japan combined with India’s economic slowdown makes India-Japan attempts to copy China’s CPEC project impotent and futile. After all, despite China’s economic struggles in the past couple of years – though the latest report by Reuters shows that the world’s second-largest economy had steady growth in July and is looking to for more economic growth – when China announced its ambitious Belt and Road as well as CPEC initiatives in 2013, it was enjoying a more sustainable, consumer-driven expansion of its economy.

The same cannot be said about Japan, let alone India, who experiences “a drop in consumer prices and an overall slowdown in economic growth,” according to The Financial Times report on Wednesday.

But are the economic struggles of India and the potential economic setbacks in Japan’s economic in case the nation plunges deeper into the political crisis the only factors that may prevent India-Japan from developing a successful AAGC initiative?

AAGC Could Potentially Derail Belt and Road and CPEC

Although India and Japan refused to be part of China’s Belt and Road initiative – back when Beijing and Islamabad offered them an olive branch to benefit from the game-changer CPEC project – New Delhi and Tokyo seek to get their own piece of the inter-connectivity pie.

While the AAGC is essentially a series of mostly sea-based economic triangles connecting cities and hubs across South, Southeast, and East Asia with Oceania and Africa, can the India-Japan initiative derail China’s Belt and Road?

In theory, it can. This was a major concern voiced by Chinese state-run newspaper Global Times on Tuesday. The daily warned New Delhi and Tokyo against turning its corridor into a division project aimed at “squeezing out” China’s Belt and Road initiative from the regions.

As China and India remained engaged in a heated border standoff – with the two nations unprecedentedly increasing their military presence along the border, according to reports – the newspaper warned New Delhi against attempting to counterbalance Belt and Road.

China Warns India Against “Over-Assertive Plans” With AAGC

Basically, China welcomes the AAGC initiative but only as long as it does not compete with the Belt and Road but rather “complements” it. “As long as the AAGC aims to embrace inclusive growth and promote joint prosperity, the corridor should be encouraged,” the newspaper read, hinting that China has much more leverage in Africa, which becomes the focus of the AAGC initiative, than India-Japan.

“That’s particularly the case, considering that China has already made huge commitments to developing Africa while the India-Japan partnership is only just taking shape,” the daily stated, advising India against “any over-assertive plans that may go awry.”

After all, China is Africa’s top economic partner, with the bilateral trade totaling $188 billion in 2015, more than triple the bilateral trade between India and Africa.

Why Is AAGC Impotent?

Tensions between China and India may aggravate if New Delhi opts to sign a maritime security pact with Japan next month, something that Beijing may view as India-Japan attempts to challenge China’s presence in the South China Sea, which Beijing has earlier declared “it’s own sea,” or even attempt to prevent China from expanding its presence in the Indian Ocean.

The Indian Ocean has for centuries been a key strategic water way for trade between Africa, the Middle East and Asia. If India and Japan move forward with the AAGC initiative with the intention to cut CPEC’s head off by squeezing China out of the India Ocean, it may spark a heated confrontation between the nations.

However, it still remains unclear if India and Japan will ever be able to turn the AAGC corridor into reality, as the initiative is essentially impotent and doomed to fail if the two nations’ economies continue to decline.

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Polina Tikhonova is a writer, journalist and a certified translator. Over the past 7 years, she has worked for a wide variety of top European, American, Russian, and Ukrainian media outlets. Polina holds a Master's Degree in English Philology from the University of Oxford and a Bachelor's Degree in Journalism from the Saint Petersburg State University. Her articles and news reports have been published by many newspapers, magazines, journals, blogs and online media sources across the globe. Polina is fluent in English, German, Ukrainian and Russian.

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