Thursday 17 November 2016

China Should Either Make Peace With India Or Forget About CPEC, Forbes

China Should Either Make Peace With India Or Forget About CPEC
Panos Mourdoukoutas ,  NOV 16, 2016

China desperately needs the China-Pakistan Economic Corridor (CPEC).  It’s part of that nation’s vision to write the rules of the next stage of globalization and help its export and investment engines grow for years to come—a good prospect for investors in Chinese equities, which have been lagging behind of those of neighboring India.
Ranking
China
India

Population (millions)
1374.62
1254.02

Per Capita GDP ($, Dec2015)
6416
1806

Human Development Index (2015)
90
130

Entrepreneurship Index (2016)
60
98

Economic Freedom Index (2016)
144
123

Index/Fund
12-month Performance
5-year Performance
IShares China (NYSE:FXI)
-5.16%
7.5.0%
iShares S&P India 50 (NASDAQ:INDY)
1.0%
32.18%
Source: Finance.yahoo.com 11/16/16
Specifically, CPEC is the express link between Western China, the Middle East, and Africa–China’s second continent. Ideologically that is, which can explain why Beijing has committed $46 billion to the project.
The trouble is that CPEC passes through Pakistani regions claimed by India. That makes it a bumpy road, to say the least — Pakistan and India continue to fight for control of these regions.
That’s why China needs to make peace with India.
So far, China has done very little to appease India. In fact, it has done quite the opposite: repeatedly blocking India’s efforts to join the Nuclear Supplier Group (NSG).
And it has sided openly with Pakistan in the India-Pakistan Kashmir standoff, as evidenced by statements by China’s senior officials on the sidelines of the ongoing 71st session of United Nations General Assembly in New York.
That can explain why India’s has sided with the US in the South China Sea disputes, as previously discussed here.
And things could turn worse, if pro-Indian forces in Pakistan sabotage China’s CPEC route.
That raises the possibility of an open confrontation between China and Pakistan on the one side, and India and its allies on the other.
Is China ready for this scenario? Probably not. That’s why Beijing should either appease New Delhi or forget about CPEC altogether.



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