China, Trade and South Asia

By Atharva Deshmukh


China, Trade and South Asia

Understanding China’s experiments in South Asian political economy:

The China-Maldives Free Trade Agreement, signed between Maldivian President Abdulla Yameen Abdul Gayoom and Chinese president Xi Jinping during the former’s visit to China in early December has created quite the stir. Not so much owing to its technical content but more so owing to its political consequences. Critics argue that the ‘debt trap’ and ‘trade dependence’ that could arise as a direct consequence of the FTA meant a compromise in Maldivian sovereignty. Trade alas, is political.

There must be a deeper meaning to the China-Maldives trade deal. Sure enough, there is. And it is critical to acknowledge it.

The World’s Sole Surviving Civilization State:

In 2011, Martin Jaques would take to the TED stage in London to drive home a crucial argument; the West has constantly misunderstood China.

China, unlike popular Western beliefs, is not a nation state. It is a ‘civilization state’. For foreign policy, this implies that the role of history and political values that have been nurtured over the years are now more pervasive than ever before. It is these political values and historical legacies that form the cornerstones of China’s foreign and trade policy.

Remember the arguments from the Chinese camp during the debates over the South China Sea? The references to the concept of the ‘9 dash-line’? That was no nation-state argument. It was an argument deeply rooted in historical claims. Characteristic of a ‘civilization-state psyche’.

Chinese trade policy is an extension of this psyche. What could prove this argument better than the grand Chinese project in political economy? Something the world knows as the ‘One Belt One Road’ project.

One Belt One Road - How the Poles of Power are Shifting:

Deng Xiaoping and his era of ‘cautious pragmatism’ may be long gone but his legacy remains. In China, economics and statecraft are more closely tied than in any other country. For the Communist Party of China, it is a vital reservoir of legitimacy. Chinese trade policies are by that extension, backed by an economic muscle coupled with a civilizational mindset.

Take Australia for instance. It has been argued that Canberra is the weakest link in the US-India-Australia-Japan quadrilateral. Why? Because Australia’s export driven growth is heavily dependent on their importers in China.  Over 28% of total exports One Belt One Road seeks to establish and capitalize on such political leverage created by carefully drafted trade deals. The Australian FTA is just one. Think about the China-ASEAN FTA. It tells a similar tale.

Similarly, following the trails of the recently concluded China-Maldives FTA, China will look to sow the seeds of economic statecraft in South Asia. The ‘Iron Brother’ relationship between Islamabad and Beijing aside, trade deals with nations such as Sri Lanka will closely be tied to projects such as Hanbantota. The ‘string of pearls’ is built on the foundations of political leverage in turn created by such trade deals.

What to Expect:

Beijing will look upon South Asia akin to the way New Delhi will look at Beijing; as a land of myriad opportunities coupled with complex challenges. Beijing is likely to look upon South Asia not as a single geo-political entity but one whose single units (nation states) each reflect a starkly different set of interests and objectives. It is a set of the bilateral yet interdependent relationships with Pakistan, Afghanistan, Sri Lanka, Maldives and India that define Chinese foreign policy in the region. While figures, facts and dates are often held as points of reference to understand Chinese interests, there is a need to do much more. They key lies in deconstructing the Western-driven concept of the Chinese state and construct it once more, this time with Chinese values. Beijing is not like the West and is unlikely to ever be that way.


About the author 

Atharva Deshmukh is a member of Information Services team at MitKat and is studying Global Affairs at Jindal Global University.


Disclaimer: Any views or opinions represented in this blog are of the author and do not represent those of MitKat. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.

Published On - Dec 16,2017

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