Scandal At China's Grand Silk Road Summit As India Skips, Warns Of "Unsustainable Debt"

Tyler Durden's picture

It was supposed to be China's day of celebrating massive infrastructure spending for the sake of spending (read ghost towns, only now outside China's borders) as Xi Jinping pledged $124 billion on Sunday for his new Silk Road plan to forge "a path of peace, inclusiveness and free trade" while calling for the abandonment of old models based on rivalry and diplomatic power games. However, it did not go quite as smoothly as expected.

A celebration years in the making, Xi hosted dozens of world leaders - including a piano-playing Vladimir Putin - on Sunday for the country's biggest diplomatic showcase of the year, touting his vision of a new "Silk Road" that opens trade routes across the globe. Xi used the summit to "bolster China's global leadership ambitions" as U.S. President Donald Trump promotes "America First" and questions existing global free trade deals.

In total, leaders from 29 countries attended the forum, including some of China's close allies and partners such as Russian President Vladimir Putin, Cambodian Prime Minister Hun Sen, Kazakh President Nursultan Nazarbayev, Turkey's quasi-dictator Tayyip Erdogan, as well as the heads of the United Nations, and the CapEx leeches from the IMF and World Bank.

"We should build an open platform of cooperation and uphold and grow an open world economy," China's president Xi told the opening of the two-day gathering in Beijing.

Over the past four years, China touted what it formally calls the "One Belt, One Road" initiative as a new way to boost globalization and global development, aiming to expand links between Asia, Africa, Europe and beyond underpinned by billions of dollars in infrastructure investment. In other words, another way to boost China's GDP only this time diluted among more Asian nations, who just have to take China's word that it will ultimately be for their benefit.

Xi also said the world must create conditions that promote open development and encourage the building of systems of "fair, reasonable and transparent global trade and investment rules". China's president also pledged an anchor funding boost to the new Silk Road, including an extra 100 billion yuan ($14.50 billion) into the existing Silk Road Fund, 380 billion yuan in loans from two policy banks and 60 billion yuan in aid to developing countries and international bodies in countries along the new trade routes, according to Reuters. Some however, were concerned that this was nothing more than just Chinese grandstanding: Xi did not give a time frame for the new loans, aid and funding pledged on Sunday.

* * *

Alas, the meticulously scripted plan to showcase China's growing economic and trade dominance did not go off quite as smoothly as Xi had planned.

First, just hours before the summit opened, North Korea launched its latest ballistic missile, provoking Beijing and further testing the patience of China, its chief ally. Ironically, the United States had complained to China on Friday over the inclusion of a North Korean delegation at the event.

Then, in a sign that China's rampant, credit-fuelled growth is making some just a little uncomfortable, some Western diplomats expressed unease about both the summit and the plan as a whole, seeing it as an attempt to promote Chinese influence globally according to Reuters. They are also concerned about transparency and access for foreign firms to the scheme.

Australian Trade Minister Steven Ciobo said Canberra was receptive to exploring commercial opportunities China's new Silk Road presented, but any decisions would remain incumbent on national interest. Responding to criticism, Xi said that  "China is willing to share its development experience with all countries" and added "we will not interfere in other countries' internal affairs. We will not export our system of society and development model, and even more will not impose our views on others."

But the biggest surprise was India, the world's fastest growing nation and the second most populous in the world, which did not even bother to send an official delegation to Beijing and instead criticised China's global initiative, warning of an "unsustainable debt burden" for countries involved.

Indian foreign ministry spokesman Gopal Baglay, asked whether New Delhi was participating in the summit, said "India could not accept a project that compromised its sovereignty."

India is incensed that one of the key Belt and Road projects passes through Kashmir and Pakistan. The nuclear-armed rivals have fought two of their three wars over the disputed region, Reuters notes. "No country can accept a project that ignores its core concerns on sovereignty and territorial integrity," Baglay said.

Furthermore, he also warned of the danger of debt. One of the criticisms of the Silk Road plan is that host countries may struggle to pay back loans for huge infrastructure projects being carried out and funded by Chinese companies and banks. "Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities," Baglay said.

As well as the corridor through Pakistan, India is worried more broadly about China's economic and diplomatic expansion through Asia, and in particular across countries and waterways that it considers to be its sphere of influence.

As China proceeds to flex its economic and geopolitical muscles further in the coming years, we expect many more such similar antagonisms between China and India in the near future.

Finally, in what may be perhaps the best summary of the regional sentiment - and antagonism - over the Silk Road, is this fictional postcard, written by Chris Andrew over at Clarmond.

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BullyDog's picture

Crack in the BRICS

 

I did wonder why India did what it did with it's currency, as per nudging by the IMF.

 

Then Israel awarded them new military contract worth billions.   

How cheap alliances are bought and sold for.

WernerHeisenberg's picture

India still bends the knee to the UK

. . . _ _ _ . . .'s picture

Colonial artifacts will be short lived.

Darktarra's picture

So why is it that the Indians understand, yet American Wall St. doesn't udnerstand China?! 

tmosley's picture

Why would Modi attend an even that doesn't have a designated shitting hall?

peddling-fiction's picture

This is the real reason India is deeply upset.

https://en.m.wikipedia.org/wiki/China%E2%80%93Pakistan_Economic_Corridor

Pakistan needs to go through Gilgit-Baltistan (Opposed to being part of Kashmir) to fulfill this agreement.

https://en.m.wikipedia.org/wiki/Gilgit-Baltistan

It means that they have China's support against India on the Kashmir issue (India was schlonged bigly), and China has a way of shipping to and from Pakistan, in case the US blocks the Straight of Malacca for shipping.

Look at a map to understand the geopolitics better.

BandGap's picture

Thank you, I learned something today.

I see this as a bigger picture of "the other team". Interesting that India stayed out, regardless of the circumstances.

 

earleflorida's picture

https://www.sott.net/article/350987-The-end-of-the-Unipolar-world-China-and-Russia-continue-to-build-the-new-Silk-Road-to-a-multi-polar-world

Note:  The 'WTO' was created in 1998, and on Dec.11,2001, just three[3]months after '911', bush lets China become a member with, 'Most favoured Nation Status'!

you like?

Note2: India is perhaps the most corrupt country in the world, having not advanced its society since its independence from great britain on aug/1947 minutes after pakistan was given its independence.

Note3: Ghandi's grand`daughter alone is woth $30 Billion 

Stuck on Zero's picture

And I wonder if Tibet was represented at this forum.  And didn't China traditionally own all the lands along silk road?

earleflorida's picture

TIBET will never be reconized by "Mother"`China as a Nation State, as the same unequivocalable understanding holds true in perpetuality to ROC'

AltRight Girl's picture

Let's hope China will get ruined with this plan.

They're pushing globalization more than the jews. 

Chinks are the kikes of the East.

China Bets on Globalization with $124 Billion Plan for New Silk Road

 

PS. Germany sold the same poison apple with it's EU project back in the day.  The lazy Southern Europe got some toll highways while the North got the bill.

And the Germans get do drive to their cheap beach resorts and sell their cheap made but expensive shit to both N and S cashing in their own monopoly money, €uro.

Even though they are so good at counterfeiting and copying, I wonder how come it took the chinks so long to copy the trick.

earleflorida's picture

ref: guest list nations in above link 

earleflorida's picture

lord mountbatten and his beautiful wife were swingers in bed as a threesome with nehru!

his wife had fallen in love with nehru! strange that ghandis and nehru's inter`married?

Correction: Sonia Ghandis wealth is only $2.0 +/+ billion.   my bad:)

but[t], between the family-tree in the link below, and the fabulous wealth in india, one can only appreciate the grandiose dynaty?,  just follow the money....?             https://nehrufamily.wordpress.com/

bobbbny's picture

One of the criticisms of the Silk Road plan is that host countries may struggle to pay back loans for huge infrastructure projects being carried out and funded by Chinese companies and banks. "Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities," Baglay said.

The IMF & World Bank do not like competition.

earleflorida's picture

this is the 'BIG' ?

ZH/TD has had article after article covering the subject.

he would better explain it, if... he's listening:)

tis a great question.

thanks

Ps. it's really deep... if ya know what i mean.

earleflorida's picture

Pepe Escobar 5/15/17 @ atimes.com explains alot about said subject matter.

http://www.atimes.com/article/xis-wild-geese-chase-silk-road-gold/

Note: for further in-depth reading 'Tag`links' at end of article before comments is good start....:)

East Indian's picture

Who is Gandhi's grand daughter worth $30 billion?

If you mean Sonia Gandhi, no, she is not Gandhi;s grnd daughter. She is not even born Indian. 

Gandhi's deputy was Jawaharlal Nehru, the first PM of India; he had a smart(ass) son-in-law, who changed his surname from Ghandy to Gandhi, to take advantage of Gandhi surname. His wife Indira Gandhi became PM later; their son Rajiv Gandhi became PM in 1984; Sonia is his Italian widow.

 

The original Mohandas K. ('Mahatma') Gandhi's family keeps scrupulously away from politics. 

giovanni_f's picture

it is quite fascinating how the Nehru Clan managed to appropriate the name of its national icon. India is the place where you can find enlightened people but also brain-dead mass murderers such as the chai wallah turned prime minister Modi who abolished cash in a largely cash-based society where the majority of the people have no bank account.

Since the chinese -indian war, which India lost badly, there is still an open bill to settle (in the mind of some Indians).

earleflorida's picture

please read my link above and the family tree of both nehru and gandhi's genealogy.

several links and sub-links.  i apologize for the oversite!!!  *{(sonia gandhi)/ (Antonia Maino)}

your correct about the name change---  http://www.biography.com/news/indira-gandhi-biography-facts#!

thankyou :)

http://corruptcongress.wikia.com/wiki/Antonia_Maino

FWIW I'm not a fan of 'wikipedia' having been financed by the 'Rockefeller Foundation', if ya get my drift?                                   

peddling-fiction's picture

I have learned a lot here since 2010 and many red pills I took came from the comments here in ZH.

Still, do your own research.

11b40's picture

Indeed.  One should always look at maps when puzzling over geo-political issues.  It is amazing how a picture of the way things fit together clears up matters.

. . . _ _ _ . . .'s picture

Wall street is trapped by debt to China.

They understand, they just don't want us to.

AVmaster's picture

It's alright, there are other countries besides india...

 

As the EU continues its death spiral, the former soviet bloc countries will be looking at BRICs

Luc X. Ifer's picture

Actually this is perfect! India showing openly anymosity to China will raise tensions far from Europe, can you imagine what of an economical boom would be to have a full scale war between India and China, one only can pray for such an awesome opportunity :)!

peddling-fiction's picture

You have not been this giddy since aeons Marduk.

It appears your evil is not appreciated here on ZH.

So, harvest time is approaching. Where to start picking your butterflies?

therealestg9's picture

You can choose between Wall Street globalism or Chinese Silk Road globalism. Don't make the mistake of assuming that Chinese globalism will be any better for common people than Wall Street globalism.

. . . _ _ _ . . .'s picture

My gut says the same, then again, China has no aspirations for global domination, never have. They want our money.

So all other things being equal, and in light of America's empirical thinking, and seeing how that has played out, I might just lean eastwards as Turkey has.

giovanni_f's picture

"but the world will lose its compass of morality".

Nikki Hynes

. . . _ _ _ . . .'s picture

;)

... or gain one. Wait and see.

Koba the Dread's picture

If you think that India understands anything, then you don't understand India.

TheGardener's picture

This India thing is a step / a stone that might be overcome. For India to be involved she better secure her untiedy front lawn.

 

TheGardener's picture

Yes, stepping stones as in shakespeares murder appeances.

niemand's picture

wonder no longer, you must

http://norberthaering.de/en/32-english/news/784-gates-india-demonetization

 

old vaxx kill bill gates killin´indians by digitization,

old habits die hard

 

 

shovelhead's picture

Too bad it's Bill Gates

iSkim would be the perfect Co. name.

Microshaft? Fukyousoft?

We hate cash. No transaction fees, no data to collect and sell and we can't turn it off when we want. We don't care if you don't believe in the Beast and his mark. We do and that's all that matters.

BTW...Got any kids you want to sell?

BlindMonkey's picture

India shits all over the silk road.

 

Was anyone expecting anything different?

. . . _ _ _ . . .'s picture

India will join. It's just a matter of time. What other options will they have? They can't let Pakistan get the upper hand.

Negotiating from a position of strength might backfire for India in this case.

. . . _ _ _ . . .'s picture

This could also be a set-up. With India playing hurt, this might be the impetus (excuse) China needs to start liquidating US debt in order to 'build confidence' with its trading partners. China could pay off some debt, re-assure partners, and hurt the US dollar/economy at the same time, and it wouldn't even look like China was dumping the dollar... until it was too late (don't forget that BIS estimates for China have a 6 month lag.) Win-win-win-win.

underthevolcano's picture

Yeah, and I understand that even China's reserves have grown back over 3 trillion, exclusive of the debt they hold, so I guess they could do a lot of damage. Increase the US Debt by 20% almost overnight.

. . . _ _ _ . . .'s picture

US owes China and Japan $2T, Cayman and Europe (incl. UK) owe US $2T.

US could keep afloat for a while calling in its loans to Cayman Islands and UK/Euro, but Japan is the decider. Will they follow China and dump dollars, or will they stubbornly hold on to their $1t in treasury debt, which will depreciate fast? I think they too will fold, and down will come Humpty, cradle and all.

shovelhead's picture

"Ah, sir? The young lady says that you have a Treasury note you don't care to roll over? That you would like cash?"

"Cash, Yes. All cash."

Okay then, we can help you with that. May I see the note?"

"Outside. Truck outside. Very big truck. Very full notes.Tank you please."

tyberious's picture

India is sill a Western Colony!

Nexus789's picture

Indians could not organise a piss up in a brewery if their life depended on it. 

Omen IV's picture

India is a tool - knocking out cash proved it

DetectiveStern's picture

RE Putin's piano playing. Do they not have piano tuners in China? I mean it's a horrible task mostly done by nutters with amazing hearing but still out of 1 billion you'd think they'd find one.

Got The Wrong No's picture

It made me cringe. The CIA hacked the piano to make Putin sound worse than he is. Just a little espionage fun.