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China is keeping an eye on IMEC

opinionChina is keeping an eye on IMEC

The announcement of the ambitious India-Middle East-Europe Economic Corridor (IMEC) on the sidelines of the G20 Summit in Delhi was the biggest takeaway from the congregation. The IMEC was jointly announced by the leaders of the United States, India, Saudi Arabia, the United Arab Emirates, France, Germany, Italy and the European Union on 9 September.

According to the MoU posted by the White House on its website, “the IMEC will be comprised of two separate corridors, the east corridor connecting India to the Arabian Gulf and the northern corridor connecting the Arabian Gulf to Europe. It will include a railway that, upon completion, will provide a reliable and cost-effective cross-border ship-to-rail transit network to supplement existing maritime and road transport routes—enabling goods and services to transit to, from, and between India, the UAE, Saudi Arabia, Jordan, Israel, and Europe.”

The IMEC aims to achieve a “transformative integration of Asia, Europe and the Middle East” through a network of cables for electricity and digital connectivity, as well as pipelines for clean hydrogen export, thus “secure regional supply chains, increase trade accessibility, improve trade facilitation, and support an increased emphasis on environmental social, and government impacts.” Prime Minister Narendra Modi hailed the corridor as the one that “promises to be a beacon of cooperation, innovation, and shared progress charting a journey of shared aspirations and dreams.” European Commission President Ursula Von der Leyen described it as “much more than just a railway or a cable”. She said, “It is a green and digital bridge across continents and civilisations.”

Israeli Prime Minister Benjamin Netanyahu described it as the “largest cooperation project in our history” that will “change the face of the Middle East, Israel, and will affect the entire world”. In the words of C. Raja Mohan, “India has finally found a formula to connect to both Arabia and Europa” as the IMEC “breaks Pakistan’s veto over India’s overland connectivity to the West.”

China, though it supported the establishment of the IMEC, it also said that the same should not be used as a “geopolitical tool”. Nevertheless, the Chinese media has pronounced it as the something that will “counter” China’s “Belt and Road Initiative”. The issue of funding has been highlighted by most of the writings. An article in the Guancha.cn says that the While House memo is silent on listing “funding sources” (资金来源) for the project. Orientaldaily.com on the other hand says that “in addition to countering China’s ‘Belt and Road’ Initiative, it is also an attempt by the United States to reach a broader diplomatic agreement in the Middle East, including getting Saudi Arabia to recognize Israel and reaching a Middle East reconciliation.” Another article in 163.com calls the IMEC an “unfettered imagination” (畅想) that is designed to “compete” with China’s BRI. The article further says, “Judging from the map [of IMEC], this has indeed blocked China’s advancement from Central Asia to the south. But the problem is that Saudi Arabia and the United Arab Emirates are already BRICS countries, and they are still working hard to become members of the Shanghai Cooperation Organization. Then there are Iran and Egypt… without Iran’s participation, the prosperity and problems of the Middle East would be a ‘mirage’ (海市蜃楼) in the desert.”

Another issue is that the signatories to the IMEC do not have an “industrial manufacturing” bloc, which according to the article seems problematic as it is related to a country’s land and labour policy, human capital, government system and efficiency. Currently, in the entire world, only China can meet the existing production and processing capacity worth US $6 trillion. For the emerging economies, the large-scale transfer of production capacity led by the United States is not only bad for them, on the contrary, it will also destroy their industrial systems in one move. No wonder, the 163.com article calls the IMEC as a “fragmentary” (残缺) “illusion” (幻想). Furthermore, China believes that the project is “politically exclusive” (政治排他性). Wang Jin, associate professor at the Institute of Middle East Studies at Northwestern University aired such views in an interview to the Huanqiu Shibao. “The countries participating in the project are all having good relations with the United States, including some European countries and the US ‘allies’ in the Middle East. The ideological and geopolitical factors are too obvious to be ignored.” Wang Xiaoyu, an associate researcher at the Middle East Studies Center of Fudan University, identifies “three roadblocks”(三道坎) for the project—achieving consensus, funding, and the China-Arab community with a shared future for the new era.

Undoubtedly, China’s economic engagement with Africa and the Arab world far exceeds any other major country’s. In 2022, China’s trade with Africa reached US$282 billion. China has heavily invested in Africa’s energy resources, infrastructure development, telecommunications and mining sectors. Today, over a million Chinese have settled in Africa, a US$4.5 billion Djibouti-Addis Ababa and Mombasa-Nairobi railway is one of the milestone projects China has executed. Even more ambitious, the Electrified Standard Gauge Railway between Mombasa and Nairobi that would cost US$13.8 billion, is on the table. As regards the Arab-China engagement, a mechanism of “1+2+3” has been proposed by Xi Jinping since 2014, where “1” refers to cooperation in energy as the core, “2” for “two wings”—infrastructure and trade and investment—and “3” stands for using three advanced technologies—nuclear energy, space satellites and new energy as breakthrough levers in an effort to raise the level of pragmatic Sino-Arab cooperation. China sees its cooperation with the Arab world and Africa as an example of South-South cooperation over the past decade, China-Arab trade has grown by US$100 billion, with the total volume exceeding US$300 billion.

It could be discerned that China’s BRI footprints in Asia, Europe, Africa and Latin America have forced the United States and its allies to counter the BRI with their own projects. Some of the initiatives such as the Asia-Africa Growth Corridor (AFGC) (2017), Indo-Pacific Infrastructure Forum (2018), Build Back Better World (B3W) (2021), EU’s Global Gateway strategy (2022) etc., have been launched to counter China’s influence. These have been projected as part of a “liberal and value-based order” that intends to bring in “transparency” and “high quality” to the projects. However, some of these such as AFGC have remained nonstarters for the want of investment. As regards the B3W, the US argues that “it will collectively catalyse hundreds of billions of dollars of infrastructure investment for low and middle-income countries in the coming years.” EU’s Global Gateway strategy looks more promising, wanting to mobilise up to 300 billion euros of investment over the period 2021-2027. Though China could as well be a beneficiary of the IMEC, however, it remains to be seen how fast the corridor would be able to overcome the “three roadblocks” identified by the Chinese scholar.

  • B.R. Deepak is Professor, Center of Chinese and Southeast Asian Studies, Jawaharlal Nehru University, New Delhi.

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